The foreign exchange (forex) market is the largest and most liquid financial market in the world, with over $6 trillion traded daily. With so much money flowing through the forex ecosystem, choosing a reliable and reputable forex broker is crucial. In this article, we compare two of the top forex brokers – OCTAFX and FP Markets – analyzing their key features, fees, platforms, and more.
Introduction to OCTAFX
OCTAFX is an online forex and CFD broker that was founded in 2011. Regulated by FSA (Saint Vincent and the Grenadines) and the Cyprus Securities and Exchange Commission (CySEC), OCTAFX services clients globally and has offices in several countries.
Some key facts about OCTAFX:
- Offers access to over 50 currency pairs as well as CFDs, indices, commodities, stocks, and crypto.
- MetaTrader 4 and MetaTrader 5 supported.
- No dealing desk intervention. STP/ECN execution.
- Leverage up to 1:500.
- Spreads from 0.4 pips on Razor account.
- OCTAFX CopyTrade social trading platform.
- 24/5 customer support via call, chat, and email.
Introduction to FP Markets
Founded in 2005, FP Markets is an Australian forex and CFD broker regulated by the Australian Securities and Investments Commission (ASIC). FP Markets has offices globally and services clients worldwide.
Key facts about FP Markets:
- Access to over 10,000 trading instruments including forex, indices, commodities, stocks, and cryptocurrencies.
- MetaTrader 4, MetaTrader 5, and Iress trading platforms offered.
- Raw ECN spreads from 0.0 pips.
- Leverage up to 1:500.
- Segregated client funds in tier-1 banks.
- 24/5 multilingual customer support.
Regulation and Safety of Funds
When selecting a forex broker, regulation is arguably the most important factor as it affects the security of your investment and trading funds.
OCTAFX is regulated by FSA (Saint Vincent and the Grenadines) and CySEC in Cyprus under license number 071/07. FP Markets is regulated by ASIC in Australia with license number ACN 128 881 877. Both CySEC and ASIC are respected financial regulators that require brokers to segregate client funds in separate accounts, maintain specific capital ratios, submit regular financial reports, and more.
This regulation provides peace of mind that client money and positions are protected in the unlikely event a broker becomes insolvent. Between OCTAFX and FP Markets, both offer high regulatory oversight. However, ASIC is generally considered a stricter regulator than CySEC. Overall, both brokers offer excellent safety of client funds.
Trading Instruments and Markets
A key consideration when selecting a forex broker is the variety of markets and asset classes available for trading. Both OCTAFX and FP Markets offer access to all the major currency pairs, cross-currency pairs, and minors. This covers currencies such as EUR/USD, USD/JPY, GBP/USD, USD/CAD, EUR/GBP, and USD/CHF.
Beyond forex, OCTAFX offers CFDs on indices, commodities, equities, and cryptocurrency pairs. Overall, around 50 instruments are available for trading. FP Markets significantly widens the playing field with over 10,000 trading instruments across forex, indices, commodities, equities, bonds, interest rates, and crypto. This gives traders ample opportunities to diversify their portfolios beyond just forex.
In terms of breadth of markets, FP Markets is the clear winner. However, OCTAFX still covers the major asset classes.
Spreads, Commissions, and Fees
When trading forex, the transaction costs come primarily from the spread – the difference between the bid and ask prices. OCTAFX offers variable spreads that start from 0.4 pips on its Razor account. The typical spreads on the major currency pairs are around 0.9 pips.
FP Markets offers Raw ECN account spreads from 0.0 pips by connecting traders directly to tier-1 liquidity providers. The typical spreads on the major currency pairs are 0.1 pips. FP Markets also runs a Zero commission promotion on forex trades.
In terms of fees, OCTAFX has no deposit, withdrawal, or account fees. Dormant accounts are charged $10 per month after 12 months of no trading activity. FP Markets also has no deposit or withdrawal fees. Inactive accounts are charged $100 annually.
Overall, FP Markets has lower transaction fees thanks to its raw ECN model. However, OCTAFX still offers competitive spreads starting from 0.4 pips.
Trading Platforms
OCTAFX and FP Markets both support the popular MetaTrader 4 and MetaTrader 5 third-party trading platforms. These allow traders to analyze markets, place trades, use EAs and indicators, copy signals, and more.
Beyond MT4/MT5, OCTAFX has also developed its own proprietary OctaFX cTrader platform. This web-based platform provides deep liquidity, fast execution, and a range of technical analysis tools.
FP Markets goes a step further by also offering other institutional-grade trading platforms such as Iress. This provides advanced features for expert traders along with level II pricing.
For casual traders, both brokers offer excellent platforms via MT4/MT5. However, FP Markets caters better to high volume and advanced traders through additional platforms.
Leverage Options
Leverage amplifies trading power by allowing traders to open larger positions than their account balance. Both OCTAFX and FP Markets offer leverage up to 1:500, which is the standard cap set by European regulators.
Lower leverage caps also available – OCTAFX offers 1:200 while FP Markets offers 1:100. Traders based outside Europe can qualify for higher leverage from both brokers.
In summary, leverage options are very similar between the two brokers with 1:500 available to European clients.
Research and Education
For beginning traders still learning the ropes, the availability quality of research tools and educational resources should factor into selecting a broker.
OCTAFX offers an economic news calendar, daily market updates, trading webinars, video tutorials, ebooks, and more. These cover technical and fundamental analysis.
FP Markets provides trading calculators, live webinars, ebooks, online courses via its FP Markets Academy, trading guides, glossary of terms, and more. Like OCTAFX, the materials focus on building technical and fundamental trading skills.
Both brokers offer ample educational resources and tools. OCTAFX materials may cater more towards beginners while FP Markets offers courses for novice to advanced traders.
Customer Support and Services
Reliable customer support is key when issues arise in a trading account. OCTAFX provides customer support 24 hours a day, 5 days a week via online chat, phone, and email. Support is available in over 20 languages.
FP Markets also offers 24/5 multilingual customer support via live chat, email, and phone globally. Additionally, localized support numbers are available for 10 countries. VIP services are also provided.
In summary, both provide excellent around-the-clock customer support during the trading week. Wait times may vary, but overall OCTAFX and FP Markets are comparable when it comes to customer support quality.
Final Thoughts
OCTAFX and FP Markets are both reliable and recommended forex brokers. OCTAFX strengths are competitive spreads and an easy to use proprietary trading platform. FP Markets edges out when it comes to regulation, trading instruments, advanced platforms for high volume traders, and lower transaction fees.
For casual retail traders focused primarily on forex rather than thousands of global markets, OCTAFX is a solid choice thanks to tight spreads and good trading platforms.
FP Markets caters better to advanced and active traders wanting maximum asset classes along with premium trading tools and platforms. Overall, it comes down to your individual needs as a trader. Evaluate the key factors covered in this guide, and select the broker that best fits.
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