GENERAL INFORMATION AND REGULATION
Compass FX is a forex broker company in the United States of America. In fact, Compass FX acts as an introducing broker for other forex broker companies.
A Forex broker is a company that provides traders with access to platforms that allow them to buy and sell foreign currencies. Forex brokers are also known as retail forex brokers or currency trading brokers. Retail currency traders in turn use these brokers to gain access to the 24-hour currency market for speculation purposes. Forex broker services are also provided for institutional clients and large companies such as investment banks.
The company was already founded in 1990 and since then Compass FX has prided itself on unprejudiced research and unparalleled customer service as well as the fact that it offers virtually every possible way to pilot through the world of commodities and forex trading.
Compass FX is regulated by the National Futures Association (NFA – 0232832) although it acts mainly as an introducing broker for other top forex brokers.
One of the first things a potential trader needs to establish is whether a broker like Compass FX is safe to trade with. One of the surest benchmarks to measure the safety of a brokerage is to establish which regulating authorities are watchdogs over its actions.
Compass FX is regulated by the National Futures Association (NFA) with registration number 0232832. Since being established in 1990 already, it has gained ample experience as a forex trading company that also only makes use of top-tier liquidity providers.
Compass FX is also regulated and authorized by the Australian Securities and Investment Commission (ASIC), offering customers more peace of mind.
MARKET INSTRUMENT
CompassFx like other brokers offer all or some of the following kinds of market instruments for trading:
Forex:
Forex trading, also called currency or FX trading, involves the currency exchange market where individuals, companies, and financial institutions exchange currencies for one another at floating rates.
Commodities:
As with currency exchange markets, commodity markets offer different investment opportunities for traders. Investing in contract-based tradable goods is a reliable way to mitigate risk during times of inflation or economic uncertainty.
Indices:
Equity or stock indices are actual stock market indexes that measure the value of a specific section of a stock market. They can represent a specific set of the largest companies of a nation or they can represent a specific stock market.
Precious metals:
The trading of gold and other precious metals involves hard commodities that are contract-based tradable goods.
Energy:
The high volatility of energy prices due to political and environmental factors, supply and demand, extreme weather conditions, and global economic growth is a typical feature of this product, making it another popular trading choice.
Cryptocurrencies:
Bitcoin (BTC) is the digital currency with the largest market capitalization and price levels since its inception in 2008. It dominates 50% of the total crypto market cap.
Litecoin (LTC) is similar to Bitcoin but differs in terms of scalability. Litecoin is another very popular altcoin and LTCUSD is a fork of Bitcoin (BTCUSD), copied from Bitcoins code and with some alterations and launched a new project.
Ripple (RPL) is popular among big banks with the Ripple network a next-generation real-time gross settlement system. It allows instant cross-border fund transactions at very low costs.
Ethereum (ETH) is the second-largest cryptocurrency after Bitcoin and allows developers to create smart contracts on a platform.
Bitcoin Cash (BCH) was created by the Bitcoin hard fork in 2017 as a new version of the blockchain with different rules.
Since Compass FX has been introducing traders to reputable brokers like Forex.com, FXCM, Direct FX, FXDD Global, and Tier1FX, the company is known for its offering of excellent trading opportunities, but even more for its execution training.
ACCOUNT AND LEVERAGE
Compass FX offers a Standard Account and Micro Account.
A micro account caters mainly to the retail investor who try to find exposure to foreign exchange trading but doesn‘t want to risk a lot of money. A micro account’s smallest contract, also called a micro lot, is a pre-set amount of 1,000 units of currency. The minimum volume that a trader can transact is one micro lot, while the maximum volume usually varies with the amount of equity in an account.
Compass FX does not make provision for Islamic Trading Accounts. The event of leaving open positions on the foreign exchange market for more than 24 hours requires the payment of special fees. These fees are a kind of interest rate and, therefore are problematic for Muslim traders who follow Sharia Law, as it prohibits financial transactions which include the accumulation of interest.
To solve this issue, brokers often offer their Islamic finance investors an ‘Islamic account’ which is similar to a regular one, but not subjected to any special fees or interest. Compass FX does provide trading demo accounts through the respective forex brokers they introduce for.
Especially beginner traders can use these types of accounts to sharpen their skills in trading, working with virtual money on live conditions without losing the risk of losing their own money.
The leverage offered by Compass FX ranges from 1:50 to 1:200. Moreover, micro-lots and IRA accounts are available where the Forex broker functions as the IRA custodian.
With Compass FX spreads on EUR/USD and USD/JPY are from 2 to 3 points, while on other currency pairs spreads vary from 3 to 4 points. The company provides fast orders execution and hedging is allowed.
SPREADS AND COMMISSIONS
The cost of trading depends on different factors like commissions, spreads, and margins.
The spread of a currency pair is the difference between the bid and the asking rate. A pip represents the smallest increment that an exchange rate can move. One pip is 0.01 for currency pairs with JPY as the term currency and 0.0001 for all other pairs. Margin is the amount of money required in your account in order to open a position. Margin is calculated based on the current price of the base currency against USD, the size (volume) of the position, and the leverage applied to your trading account.
Commissions are the charges imposed by an investment broker on a trader for making trades on the traders behalf. The level of commissions will vary between different brokers and also depends on the asset being traded and the type of service offered by the broker.
Execution-only brokers, that is a broker that does not involve in any personal investment advice and gives traders complete control over how they trade the markets, tend to have lower commissions. While contract for differences (CFDs) trading is a form of derivative trading that enables traders to speculate on the rising or falling prices of fast-moving global financial markets, its trading on shares will incur commission.
CFD trades on other markets have no commission but do wrap a spread around the market price of a certain instrument. The cost and fees a trader would be confronted with will depend on the broker he chooses to be introduced to as well as the type of account, platform, and trading products used for trading.
TRADING PLATFORM AVAILABLE
CompassFx offers MetaTrader 4 as their trading platform. MetaTrader 4 is one of the most innovative and powerful trading platforms, designed to provide brokerage services to customers in the Forex, CFD, and Futures markets.
It combines an accessible, user-friendly interface with a wide range of powerful functions, making it a highly flexible platform that enables you to easily and efficiently manage trades even on mobile devices.
MetaTrader 4, with its compelling competitive advantages, makes the perfect solution to the most demanding trading needs.
The MetaQuotes Language 4 is the built-in “open source” code that allows the programming of :
• Expert Advisors – Automated programs designed to analyze the market, make decisions based on programmed criteria, execute various orders,and manage open positions automatically online with a traders participation.
• Custom Indicators – Technical indicators developed to analyze market conditions in a variety of ways, and some custom indicators generate signals to notify of potential trading conditions.
• Scripts – Designed for single execution of specific actions.
DEPOSIT AND WITHDRAWAL
Deposits to fund accounts with Compass FX, as well as eventual withdrawals from accounts, are in actual fact made through the currency brokers they introduce for and is not handled solely by the company itself.
The minimum deposit for opening one of the two types of accounts is 250 USD for the Micro Account and for the Standard Account a minimum of 2 500 USD is required.
The funding of such an account can be executed with the use of Wire Transfer or a credit card.
CUSTOMER SERVICE
Potential traders need to be assured that the broker company they chose can offer the necessary support and help whenever they may need it. Compass FX offers support through a team of managers that can be contacted by email, phone call, or fax.
The customer support department prides itself on being courteous when handling customers, and on providing free training resources such as free webinars and forex education courses too.
