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Merit Forex Review: Scam or Legit and Professional Broker?

Merit Forex Review: Scam or Legit and Professional Broker?

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Merit Forex offers various account types with variable spreads and leverage of up to 1:400. These accounts allow trading on the Meta Trade 4 platform as well as mobile trading on the same platform. On top of this, Merit Forex offers swap free accounts for traders of the Islamic faith in addition to managed accounts for those who would like to have their capital managed for them.

The accounts in question are standard, Active Traders, ECN and EA Robot. The minimum deposit for each one of the accounts is $250, $1000, $10,000 and $500 respectively. Trading conditions are specified on the broker’s website but their marketing materials suggest that this broker is praising himself for providing a unique trading environment for all types of traders depending on their needs.

While there are a few advantages that this broker seems to offer with their trading platform, there are also disadvantages which we will mention here. In the meantime, these Forex trading platforms are considered the best and you can sign up without having to worry that the brokers will mess you up by stealing your capital.

Merit Forex Review

Merit Forex seems to be offering competitive spreads on their websites except on their ECN accounts where spreads are not specified. This prompted us to try their demo for the ECN account on a pair like EURUSD and found that spreads were floating around 1.2 pips. This is in line with what most brokers charge for this pair and we have no doubt that this broker is quite competitive in terms of the spreads which they offer their clients.

Merit Forex

The broker also supports MT4 platform for trading, which is a very popular trading software since most traders are familiar with the software compared to other solutions such as ctrader. The reason you want to choose a broker who supports MT4 platform is because the software offers compatibility with a wide range of charting and trading solutions which include expert advisors and indicators.

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It virtually supports all kinds of automated trading solutions including live market updates for those who trade based on fundamental analysis.

In terms of leverage, Merit Forex offers up to 1:400 which is really high, although some brokers offer up to 1:500. It really depends with what kind of a trader you are. If you love taking risks, you will find that an account with high leverage is the best trading solution for you. However, if you are the conservative type of trader, then a low leveraged account offers the best solution for you. But generally a broker who is flexible tends to suit the needs of all traders regardless of whether they are conservative or aggressive traders.

Merit Fore offers a wide range of trading instruments which include Forex, CFDs, commodities, indices and precious metals. Apart from this, Merit Forex also offers trading in Crypto currencies. So traders can even trade a pair like BTCUSD.

Having said all that, Merit Forex may seem appealing but before you make a decision, you need to consider the cons of opening a trading account with this broker. Is Merit Forex a safe broker to trade with? Do they offer features which they claim to offer? Are they honest with their clients?

They are registered in an offshore destination

First of all, Merit Forex claims that they are a legally registered Forex broker with the Vanuatu Financial Services Commission. However, a background search has revealed to us that they are only registered as a securities dealer in this off shore destination. Let’s make it crystal clear that Forex brokers who are registered in Vanuatu or any offshore destination do not have to comply with strict conditions to be granted a license. In fact, these brokers are usually not being monitored by the authorities.

What this means is that Forex brokerage business is booming in that area at the expense of the client who might be looking for a reliable broker that he can trade with. It basically means that these brokers can decide to do whatever they please with your money because they are as good as not regulated.

Is Merit Forex a market maker?

It acts as the sole counter party in relation to their trading platform. This is stated in their client agreement. This simply means that the broker is acting as a principal to all trades on the platform which simply means that there is a huge potential for conflict of interest. It means that such a broker will not allow you to consistently win trades on their platform because they will be losing money in that sense.

Perhaps they can convince us with their ECN account type. However, with these other account types, conflict of interest is likely to arise and this will work to the disadvantage of the trader.

Comparatively high minimum deposit requirement

The minimum that you can deposit on their basic account to start trading is $250. This is comparatively high compared to tightly regulated brokers who charge $50 or less as minimum deposit.

We don’t know about you. But in our opinion, this deposit is still high for anyone looking to test a broker’s trading condition.

Overall, this broker seems to be offering something attractive. In terms of spreads, trading platform and even financial instruments, it is all great. However, what might bother a trader looking for a serious broker is the fact that Merit Forex is an off shore registered broker. You want a broker who puts your interest first instead of a broker that puts his first.

Our best advice for you

The location where this Forex broker is registered at offers a range of tax benefits to such companies and all Forex brokers based here are not regulated no matter what they claim. The requirements that the so called regulators have put forth are very lax. There are far more reputable brokers that you can deal with as opposed to brokers who are based in this region. You might want to try these highly recommended ones. They are affordable and their reputation is in order.

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Merit Forex
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