LiteForex Review

Trust

LiteForex Regulations

In our reviews, we examine the licenses and regulations of each entity operated by a broker, allowing us to compare their different levels of protection. We rank licenses by various regulatory bodies on a three-tier system, where Tier-1 licensing indicates the highest level of regulation.

This is what I discovered about the two entities operating under the LiteForex trade name:

• Liteforex (Europe) Ltd is licensed and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 093/08. We rate CySEC as a Tier 1 regulator.
• LiteFinance Global LLC is incorporated in St. Vincent & the Grenadines as a Limited Liability Company with registration number 931 LLC 2021. The entity is unregulated.

Why is it Important to Know Where Your Broker’s Subsidiaries are Regulated?

Brokers operate multiple entities because it allows them to serve clients worldwide. However, licenses obtained by regulators in different jurisdictions do not always entail the same degree of protection.

Some regulators mandate compliance with the strictest financial frameworks, whereas others are less rigid. That is why traders must familiarize themselves with the safety mechanisms ensured by the entity they want to open an account.

Here is what you need to be looking for in a broker in terms of safety mechanisms:

• Segregation of client funds. Keeping client funds in segregated bank accounts from the ones used for the broker’s corporate capital negates the risk of accounting errors. All LiteForex entities ensure segregated client funds.
• Negative balance protection. This safety mechanism removes the risk of trading losses exceeding the account balance. In other words, the losses you incur from trading are capped at the amount you have put in your trading account. Negative balance protection is available with all LiteForex entities.
• Compensation scheme. A compensation scheme protects traders against the broker’s liabilities if the company becomes insolvent. LiteForex’s European entity has such a compensation scheme – up to EUR 20,000 under the Investors Compensation Fund (ICF).
• Maximum leverage. Capping the maximum leverage restricts the extent of market exposure to retail traders. The higher the leverage, the higher the potential profits and potential losses. The maximum leverage with LiteForex is 1:1000, which is available with the offshore entity of the broker.

Stability and Transparency

In our Trust category assessments, we evaluate factors tied to stability and transparency, including the broker’s longevity, company size, and the transparency of information provided.

I evaluated LiteForex as a transparent broker. Its license from CySEC is easily discoverable on the website, and traders can verify it fairly quickly. I also went over the broker’s legal documents and assessed that everything was in order. Its Client Agreement is exhaustive and written in easy-to-understand language.

I did not discover any major discrepancies, and all essential safety information is readily available. I also concluded that LiteForex is pretty upfront about its trading fees. Furthermore, the costs mentioned on the website match the live quotes on the platform.

Is LiteForex Safe to Trade With?

I concluded that LiteForex can be considered as safe to trade with based on the following factors:

• Licensed by CySEC
• Adheres to all essential safety requirements
• Has a very tight margin call and stop-out policy
• Provides transparent legal documents

Fees

LiteForex Trading Fees

LiteForex Spreads

I tested LiteForex’s spreads on 2 April 2024 during the London and the New York open. The results are shown in the table below:

Broken down by asset class and compared to the industry average, LiteForex charges high spreads on instruments across all asset classes for the Classic account. The raw spreads from 0.0 pips on the ECN account are much lower and generally fall below the industry average.

LiteForex Commissions (ECN Account)

The table below shows the commission rate (round-turn) per traded lot on instruments from different asset classes:

Generally, only the $10 commission on FX Majors falls below the industry average. Accordingly, the most favorable prices are available when trading FX majors on LiteForex’s ECN account type.

LiteForex Swaps

A swap fee is a trader’s cost for holding an open position overnight because of changing interest rates. Swap long refers to the charge deductible or credit receivable for holding a buy position open overnight. In turn, swap short relates to the charges/credits deductible or receivable for holding a selling position open overnight.

The values listed below are for one full base currency contract (100,000 units).

My findings indicate that the broker charges average-to-high swaps compared to the industry average. This combination is not particularly suitable for longer-term trading strategies (swing trading and position trading).

LiteForex Non-Trading Fees

Dormant accounts are charged an inactivity fee of $3, which is quite low. Deposits and withdrawals are cost-free with LiteForex, though third-party banking fees may apply. This is only true for withdrawals, as the broker reimburses its clients for any processing fees incurred when depositing.

Accounts Comparison

I have compiled the table below to help you better understand the difference between the trading fees of LiteForex’s two account types and the industry average. It illustrates the spreads and commissions I have recorded for the EUR/USD pair and compares them against the typical costs for ECN and STP accounts in the industry at large.

The table demonstrates how much you would have to pay to trade 1 full lot (100,000 units) in EUR/USD with a pip value of $10 for each account.

To calculate the cost of such a full-sized trade, I used this formula: Spread x pip value+commission

I discovered that LiteForex’s Classic account features trading costs that are nearly twice as high as the fees on the ECN account. The latter offers slightly more competitive prices than the typical STP account, but it falls behind the typical ECN account type.

Are LiteForex’s Fees Competitive?

LiteForex’s trading fees generally exceed the industry average. Its swaps are elevated and not particularly suitable for longer-term trading. The spread rate on the Classic account is considerably higher than the industry average. This is offset in the ECN account, which features raw spreads from 0.0 pips and varying commissions.

Platforms and Tools

The Desktop Version of LiteForex’s MetaTrader 5 Platform

In this review, I tested the MetaTrader 5 platform, which features multiple essential tools, such as one-click trading, an alarm setting option, and a market depth tool. These allow traders to examine various market developments from different angles and to exploit the underlying trading opportunities in multiple ways.

MT5 is arguably best suited for automated trading via its Expert Advisors (EAs) feature. The platform also has an intuitive strategy tester, allowing experienced algo traders to tweak the parameters of their strategies so that they can be used under different market conditions. For low-latency algorithmic trading, clients of LiteForex can take advantage of the broker’s VPS offering, affording execution speeds of below 2 milliseconds.

Additionally, MetaTrader 5 has an intuitive mobile app, which helps traders stay connected to the global capital markets even on the go. LiteForex has also developed a mobile app of its own.

General Ease of Use

MT5’s layout is pretty straightforward. Account info is displayed at the bottom of the screen; charts occupy the middle portion of the window; a watch list of selected instruments and tools screen is positioned on the left side of the window; and a panel with various settings and configurations can be found at the top of the window.

Charts

I consider the charts screen a platform’s most important feature. It facilitates technical analysis by providing an overview of price action behavior. Chart artists use many analytical tools and chart configuration possibilities to examine it from multiple angles. In my experience, the really important aspect of a chart is how easy it is to scale price action up and down.

As shown above, the problem with MetaTrader is that the charts can be crowded quite easily, even when we add no more than 2 indicators. This obscures price action behavior and makes it more difficult to conduct probing technical analysis.

I have broken down the available analytical tools and chart configurations below:

• 38 technical indicators. The platform supports trend-based, volume-based indicators, oscillators, and more. These can be applied to study price action behavior and determine the underlying market sentiment. In general, technical indicators are used to gauge where the market is likely to head next.
• 24 drawing tools. Drawing tools, such as Fibonacci retracement levels and Elliott waves, are used to study repeatable price patterns. Additionally, they can be applied to determine key support and resistance levels and potential breakout or breakdown levels. Despite the rather big collection of drawing tools, the ruggedness of MT5 makes it difficult to discern price action behavior.
• 21 timeframes. One of the standout features of MetaTrader 5 is its vast array of timeframes. MT5 allows multi-timeframe analysis of price action behavior. The greater the number of timeframes, the more intricate examinations that can be carried out across the short-term and long-term.
• 3 chart types. Price action can be represented as a line, bars, or candlesticks. This diversity makes it possible to examine potential trading opportunities from different angles.

Orders

I have broken down the available order types on the MetaTrader 5 platform below:

• Market orders. Market orders are used for immediate entry at the best possible price. If triggered, they guarantee volume filling, though there could be a discrepancy between the requested price and the price where the order gets filled.
• Limit orders. Unlike market orders, limit orders guarantee exact price execution. However, a limit order will not be filled if the price action does not reach the pre-determined execution price.
• Stop orders. They are used to support open positions by limiting the maximum loss that can be incurred if the market turns in the opposite direction. A stop-loss order is placed at a fixed price below or above the spot price. If the market does indeed turn and triggers the stop-loss, it will transform into a market order and get filled at the best possible price.

My Key Takeaways After Testing the MetaTrader 5 Platform

In my opinion, MT5 is a good option for fast and simple order execution. On the other hand, its dated and rugged design falls short compared to newer, sleeker platforms. As a trader who prioritizes flexible chart scaling, I find MT5’s charting capability too rigid and less effective.

LiteForex’s Platform

LiteForex’s platform is much more fluid in comparison to MetaTrader, especially its charts, which are powered by TradingView.

Trading View offers advanced charting capabilities and multiple analytical tools for carrying out advanced technical analyses. As a chart artist, I have always valued platforms with detailed and versatile charts, and LiteForex’s platform is one such station.

Copy Trading

Traders can access LiteForex’s copy trading environment from the ‘Investing’ section of the website. The performance of all the available trading strategies is presented in the ‘Traders Ranking’ subsection.

You can find ‘profitability,’ ‘lifespan,’ and ‘equity’ parameters that are especially important, allowing trader to understand the strategy’s performance over time. However, the ranking at LiteForex lacks ‘maximum dropdown’ and ‘average dropdown’, which are necessary for estimating the trading risk associated with each strategy.

LiteForex’s Mobile App

LiteForex’s mobile app affords quick and easy access to the market on the go. It’s very useful for opening, terminating, and adjusting open positions.

The market is continually evolving, marked by periodic surges and declines in volatility. For this reason, staying on top of the latest market developments is crucial, a task made simpler through the mobile app version of LiteForex.

You can also use the app to place market, limit, and stop orders, as well as to adjust the exposure of your open trades.

My Key Takeaways After Testing LiteForex’s Mobile App

I found the app quite versatile and beginner-friendly. Most apps suffer from the same underlying problem – having to compress complex data on low-resolution devices, which usually makes it quite difficult to discern. But LiteForex’s app retains the web trader’s sophisticated look and feel. It is a great tool for making quick trading decisions, as it incorporates comprehensive research materials and tools.

Tradable Instruments

Compared to the industry average, LiteForex offers an average amount of forex pairs and commodities, and a high amount of indices. But the overall offering is pretty narrow.

What Are CFDs?

Contracts for difference (CFDs) are derivatives used to speculate on the underlying asset’s price without physical delivery.

For example, a long position on gold would generate profit as the price rises or incur a loss as it falls, all without the need to purchase actual gold bars.

One of the biggest advantages of trading CFDs is that traders can get in and out of the market almost instantaneously, thereby catching even minute changes in the price of the derivative.

What Can You Trade With LiteForex?

My Key Takeaways After Exploring LiteForex’s Instruments Offering

LiteForex’s instruments lack both scope and diversity. The broker offers 73 instruments in total, notably lacking any share CFDs and cryptocurrencies. On the one hand, the broker should be praised for offering plenty of minor forex pairs, such as USDTRY, USDMXN, and GBPSEK. However, it lacks any lower-risk securities.

I thus concluded that LiteForex’s instruments offering is mostly suited for day trading, but it cannot be used for hedging.

Customer Support

Customer Support Channels

Customer Support Test

When we test a broker’s customer support, we evaluate the agent’s knowledge of their own website, how long it takes them to respond to questions, and how detailed their answers are.

I conducted my customer support test on April 3 at around 10:15 a.m. CET via live chat. I inquired about the withdrawal fee, execution model, and commission policy.

An agent connected to the chat within seconds. Their responses were prompt but basic. The agent quickly answered the first and simplest question but appeared to struggle with more complex inquiries. Thus, I concluded that LiteForex’s customer support is good but could be improved.

Deposit and Withdrawal

LiteForex processes most payment requests between several minutes to several business days, depending on the chosen payment method. The broker does not charge deposits and even compensates the client for any third-party banking fees. LiteForex also does not charge a handling fee for withdrawals, but external fees may apply.

LiteForex Deposit Methods

LiteForex Withdrawal Methods

Account Types and Terms

LiteForex Account Opening Process

To create an account with LiteForex, please follow these easy steps:

• Step 1. Click ‘Registration’ at the top-right corner of the main page.
• Step 2. State your country of residence and date of birth.
• Step 3. Enter your email and choose a password.
• Step 4. Agree to the Terms and Conditions and proceed.
• Step 5. Enter the verification code sent to the email you provided.
• Step 6. Provide your phone number and enter the OTP number you are sent.
• Step 7. Provide additional personal details.
• Step 8. Upload proof of ID and proof of address to verify your account.

LiteForex Account Types

The ECN account offers generally more favorable conditions, though traders should mind the commission rate. For forex majors, it is set at $10 per round turn. Coupled with its raw spreads starting from 0.0 pips, this combination on the ECN account is generally better than the industry average. However, the broker charges higher commission rates on instruments from other asset classes.

Demo Account

LiteForex offers demo accounts that introduce traders to the broker’s services and allow them to tweak their strategies in a risk-free environment. The market is continually evolving and never static, so it is important to hone your skills in a safe environment. You can set up a demo account for yourself alongside your live CFD account.

Islamic Account

The broker also offers Islamic accounts for swap-free trading, as mandated under Shariah law. Traders who want to open an Islamic account need to contact LiteForex’s customer support and request the service.

What is CFD Leverage?

The leverage determines a trader’s overall market exposure. When trading Contracts for Difference (CFDs), positions can be opened for a fraction of their value because of the leverage. Essentially, the broker lends the trader money so that the latter can open bigger positions. The leverage multiplies the profits a trader generates from winning positions but also the losses incurred from failed trades.

Maximum Leverage By Asset Class

In the table below, I have listed the maximum retail leverage available with LiteForex for instruments from different asset classes:

LiteForex Accepted Countries

Liteforex (Europe) Ltd provides services only to the residents of countries from the European Economic Area (EEA), the United Arab Emirates (UAE), and the Marshal Islands.

Research

LiteForex Research Tools

I have broken down LiteForex’s research materials by type below:

Analytics Feed

The analytics feed is incorporated from Claws&Horns. It is comprised of regular market updates that inform traders of currently unfolding trading setups. The content serves the function of a news screener. Each article consists of an economic breakdown and a technical setup supported by a chart.

Trading Signals

Incorporated from Claws&Horns, the trading signals represent actionable trading opportunities. They cover instruments across different markets and use prominent indicators (Ichimoku, Bollinger, MACD, etc). Traders can use this type of content to get a sense of the prevailing market sentiment.

Analytics

Market breakdowns developed in-house by LiteForex, and available from the website with free access to everybody. The market reviews are detailed and multifaceted containing aspects of economic analysis, fundamental analysis, and technical analysis. I appreciated that each article outlines emerging trading setups on multiple instruments.

Economic Calendar

Traders can use the built-in economic calendar, which is an essential tool in a trader’s arsenal. It informs traders of upcoming market events and releases that have the potential to stir price action, thereby creating viable trading opportunities.

Trading Calculators

The broker provides several proprietary calculators (including margin and Fibonacci) that traders can use to calculate various metrics, such as the required margin to execute a specific trade, risk factors, and profit potential.

My Key Takeaways After Exploring LiteForex’s Research Materials

LiteForex’s research content gives traders a multifaceted overview of the current state of the market and provides them with actionable trading signals. I concluded that the broker’s research content caters to the needs of day traders and swing traders.

Education

Educational Content

I have broken down LiteForex’s educational content below:

Educational Books

LiteForex offers a collection of over 100 books covering a broad spectrum of topics related to trading, investing, leadership, and more. Essentially, the broker’s ebook collection acts as a library for traders seeking to explore a wide array of subjects connected to the market and trading world

Videos

55 past webinars are available from the client area. I found them highly detailed, covering a wide range of topics. They contain lots of practical insights, e.g. how to use intraday trading strategies, Fibonacci retracements, etc.

Lessons

LiteForex offers 31 educational lessons available from the client area. They are divided into beginner, intermediate, and advanced categories. I appreciated that the materials are supported with tests to help the reader solidify what has been learned.

Guides

Additionally, the broker offers a range of educational guides, which are freely available on the website. I appreciated their diversity and sharp focus on technical analysis, fundamental analysis, and trading psychology.

The Bottom Line

LiteForex is a derivatives broker founded in 2008 and headquartered in Cyprus. It operates two brands: Liteforex (Europe) Ltd is authorized by CySEC and LiteFinance Global LLC is located offshore and unregulated.

The broker offers its proprietary platform with versatile charts from Trading View and also incorporates MetaTrader 4&5. Clients of LiteForex can also use its VPS offering for low-latency trading and engage in copy trading. Another advantage of LiteForex is its robust and extensive supporting content.

However, the broker generally charges high trading fees on its Standard account and provides extremely limited instrument offering of about 70 assets.

In my estimation, LiteForex is a good choice for those interested in casual trading. Namely, beginners with little or no trading experience are interested in learning more about trading and developing a robust trading system.

FAQ