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Dukascopy Bank was founded back in 2004. Also referred to as a Swiss bank owing to its foundation being in Geneva Switzerland. We found that the company has a history which dates back to the 1990s and was a project headed mainly by a small group of highly qualified physicists who modeled the financial markets. The company developed its online trading platform soon after.
Later in 2006, the company founded SWFX (Swiss FX Marketplace). The service works as an ECN. Since then Dukascopy has managed to grow tremendously both internationally and locally. The bank owns an entity called Dukascopy Europe IBS AS; it is a fully licensed brokerage offering services with the same terms as Dukascopy Bank.
As of 2015 the company successfully acquired the semi-successful Alpari Japan, and it now operates as Dukascopy Japan Co. The company now has offices in Kiev, Zurich, Moscow, Riga and Hong Kong. It currently employs well over 200 people. Dukascopy today is an online broker offering CFDs, Forex, binary options and precious metals trading.
Dukascopy Bank also operates as a conventional bank offering online banking, as well as credit cards. The bank is duly audited by KPMG South Africa.
A Note Regarding Regulatory Status
Dukascopy Bank is apparently regulated as a bank as well as a securities dealer by the FINMA which is an abbreviation for Financial Market Supervisory Authority. You can verify their regulatory status here. Since it is a bank, the company is strictly regulated, as a matter of fact, more so compared to forex brokers in the jurisdiction. Interestingly all Forex brokers need to be licensed as a bank in Switzerland. We couldn’t find any regulatory violations by the company.
Dukascopy Bank has capital reserves which are consistent with the regulatory requirements of the FINMA. Client deposits of up to CHF 100,000 are fully protected by the government of Switzerland.
So, clients’ money is safe in the unfortunate event that Dukascopy goes bankrupt. The protection is extended to all customers of the company regardless of if they live in Switzerland or abroad. It also extends to any currency.
More information about the company and protection can be found at the official esisuisse’s website. It would also be important to know that Dukascopy has elected to forgive all accounts with a negative balance which mainly stemmed from the SNB Swiss franc issue in January 2015.
The step has cost the company considerably. Also, the company didn’t cancel or negate any trades which were made when the event occurred.
Dukascopy employs the ECN business model. Clients of the bank participate in the Swiss Forex Marketplace which is operated by Dukascopy. All customers of the bank have equal rights to trade and have equal access to the same data feed and liquidity.
The primary liquidity providers are Deutsche Bank, Currenex, JP Morgan, Barclays, Citibank, HSBC Bank, and Goldman Sachs amongst many others.
Clearly, Dukascopy has a pretty large liquidity pool which allows for easy EUR/USD trades of well up to 200 million with a single click. Also if needed clients can become liquidity contributors and in exchange, they get insights on the spreads offered as well as place their own ask and bid orders.
Almost all orders are processed right away via a series of computers and with no human intervention.
Dukascopy happens to be a counterparty to all of the trades made by their clients. However, clients are well protected from conflicts of interest since everyone is ensured that they get the same pricing, and the history of the prices are made public and verifiable. In addition, Dukascopy is bound to follow a strict code of conduct because it is governed by Swiss Banking rules.
The broker model used is pretty similar to the US model where all the brokers are a counterparty to clients’ trades even if that broker is not himself a market maker. It is for this reason that scam alert systems like those of Forex Scam Alerts does not find any discrepancy or issues with Dukascopy’s way of conducting business.
We were surprised to learn that Dukascopy had some of the best spreads in the forex industry, especially for the popular currency pairs. The transparent pricing model used combined with a low spread and a commission works out pretty well. The spreads are floated on market conditions, but they tend to widen for a short while during major news events or during the end of a trading session.
We like the fact that Dukascopy makes an effort to publish their spread history information. The chart shows how the spread distribution took place over a period fo three months for the two most popular currency pairs:
It’s not hard to see that the EUR/USD was mostly at a 0.2 pip spread, and 0.4 pips were average for the USD/JPY.
The commission charged by Dukascopy is reasonable. The commission starts at around $3.50 a 100,000 lot for some of the minor accounts. Though the commission tends to decrease quite significantly for much bigger accounts or ones with a much larger trading volume.
The account balances that are more than $25,000 are usually charged $2.50 a lot, and those that are greater than $50,000 are charged $1.80 a lot. Very large accounts where the trading is larger than 10,000,000 the commission drops to $1 a lot. Higher trading volumes tend to benefit from much lower commissions on the whole.
Funds and Accounts
Traders can open an account with Dukascopy and fund their accounts via debit or credit card or a wire transfer in an array of currency choices. It is important to note that the partner bank will charge between 2 and 2.5% in the way of a commission when funding an account via wire transfer, so this is not the best method for funding a larger account.
Dukascopy itself refrains from charging clients a transfer fee for incoming transfers. Though outgoing transfers are charged a fee which will vary depending on the currency. Take for instance USD is charged $20. The withdrawal options happen to be the same as the deposit options. It’s strange why Dukascopy does not offer a diverse array of funding options.
We have already talked about a client’s deposit of up to 100,000 CHF being protected by the Swiss Government. But deposits larger than this figure or greater than $100,000, Dukascopy allows for keeping the deposit at your own bank. However, to use this option, a bank guarantee will need to be furnished from your bank stating that the funds are available.
Using your own bank is an option in our opinion which allows for the best flexibility and excellent protection for large deposits. Though Dukascopy will charge clients using their own bank a 1.25% annual fee.
Dukascopy allows traders both new and seasoned to benefit from an archive of educational tutorials covering every aspect of the trading platform, managing leverage, and accounts, etc. In addition, Dukascopy gives people the opportunity to join live webinars on an almost regular basis which are conducted in several languages.
Traders can also attend seminars which are held in different parts of the world. We didn’t encounter a seminar in the course of writing this review.
Dukascopy also owns 20 television channels which cover an array of interesting aspects of markets, and trading like Market Glance, Crash Dummy Dollar, etc. The extent of the programming via their TV channel is huge, to say the least. But they don’t just cover markets and trading. Many of the channels are music, entertainment, and movies specific.
People who are interested in trading or learning about trading can spend hours in their educational archive. Dukascopy also gives people the opportunity to use this section or make it a part of their own websites. Additionally, Dukascopy TV can be accessed in many different languages.
The Trading Platform
The trading platform used by Dukascopy Bank provides traders access to mainly the Swiss Forex Marketplace or SWFX. However, there are many different platforms used. All the platforms in general support an array of orders like Take Profit, Market, Stop Limit, Stop Loss, Limit, Place Bid/Offer, IFD, Trailing Stop, and OCO.
The Slippage Control feature can also be used to control the max amount of slippage that will be tolerated.
The platform offers two main trade models i.e. Hedging and Net Position mode. Net Position shows all the orders for the currency pair on a single position. The Hedging mode opens up and keeps different trading positions open for the same instrument with also the possibility to merge them.
It uses a Java Platform
Dukascopy uses a platform built using Java, and so it excels at manual trading because it displays all the required trading information at the same time eliminating the need to switch between windows.
Traders can also take advantage of all the technical analysis and the various market research tools which are built into the platform. Plus, the platform allows traders to instantly chat with the support team.
The JForex platform
The platform is best suited for both automated trading and manual trading. It is mainly designed for traders who want to use the automated trading feature or need to develop or test various trading strategies primarily using the Java programming language. However, the main functionality, as well as the interface of the platform, is the same as the Java platform.
Anyone who wants to use the MetaTrader 4 platform can use the company’s third party bridge. The company also has a web trading platform which provides near instant market access as well as mobile platforms for all smart devices.
Dukascopy also offers the Web Binary Trader binary options trading platform which has a number of features and includes various predetermined payouts along with its own risks. All in the money contracts start at 70% of the overall paid premium and will go as high as 90% for smaller trading lots starting with a low $1 or in some cases no commission or even hidden fees.
Traders can trade securely via the internet wth one click trading via many accounts. Traders can also execute trades over the phone. While Dukascopy does not offer direct support or access to the markets via MetaTrader 4, it does support accessing it via third party service providers.
Dukascopy Bank’s customer service is available 6 days a week via phone and email. Brokers can also get in touch via live chat during business hours or they can contact the service via Skype instead of calling internationally.
Though we found that the chat screen was a bit of a hassle as it tends to stay online, open and connected all the time. There should be a way to close it after chatting. We also found that it was very easy for traders to submit a call back request. The call back comes in pretty quick too. So, this function certainly works better than we’d expect.
The User Interface
The company offers an array of trading options for traders which include:
- The proprietary platform called Jforex. It can be used for mainly auto-trading but also manual trading. Though we think it’s mainly optimized for automated trading. Java programmers can use the language to develop their own custom trading strategies.
- The Java platform is optimized for mainly manual trading. It’s easy to use and provides access to all the popular chart indicators.
- It is an internet based platform which is easily accessed from any device that connects to the web.
- iOS and Android mobile trading apps
- MetaTrader 4 platform users can use a 3rd party bridge along with Expert Advisors.
- Access to Dukascopy servers is allowed via its API. So, people can develop their own customized software which uses the system and optimizes their trading experience.
We highly recommend Dukascopy Bank. The service operates in some of the strictest regulatory environments with all client deposits being protected by Swiss regulations. Plus, the bank scores very well on other criteria. We like the fact that it offers tight spreads, and the commissions are kept very low especially for clients that have very large trading volumes and balances.
- Many different features and platforms
- They offer both Islamic and demo accounts
- They provide excellent customer service
- Can’t close the chat box
- The website is very overwhelming
7 Binary Options review: Dukascopy: 4,5 stars