Pepperstone Broker Review

Regulatory Overview: Founded in 2010, Pepperstone is a globally recognised broker regulated by several financial authorities, including:

• The Australian Securities and Investments Commission (ASIC) – Pepperstone Group Limited (AFSL No. 414530)
• The Financial Conduct Authority (FCA) of the UK – Pepperstone Limited (FRN No. 684312)
• The Cyprus Securities and Exchange Commission (CySEC) – Pepperstone EU Limited (Licence No. 388/20)
• The Capital Markets Authority (CMA) of Kenya – Pepperstone Markets Kenya Limited (Licence No. 128)
• The Dubai Financial Services Authority (DFSA) – Pepperstone Financial Services (DIFC) Limited (Licence No. F004356)
• The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) of Germany – Pepperstone GmbH (Licence No. 151148)
• The Securities Commission of The Bahamas (SCB) – Pepperstone Markets Limited (Licence No. SIA-F217)

These regulators vary in terms of investor protection standards. ASIC, FCA, and BaFin are strong regulators that enforce strict compliance standards, including fund segregation, audit requirements, and capital adequacy. The CMA of Kenya, CySEC, DFSA, and SCB are offshore regulators with varying degrees of oversight.

Regulation for Ugandan Traders: Pepperstone is not regulated by the Capital Markets Authority of Uganda or any local Ugandan authority. Ugandan traders are onboarded under Pepperstone Markets Kenya Limited, regulated by the Capital Markets Authority (CMA) of Kenya (Licence No. 128). While the CMA provides regulatory oversight, it does not offer the same level of investor protection as top-tier regulators like ASIC, FCA, or BaFin. This means that Ugandan clients trading under this entity do not benefit from the same regulatory safeguards as those under ASIC, FCA, or BaFin.

Client Protection Measures: Despite the lack of local regulation, Pepperstone implements several measures to enhance client security:

• Segregation of Funds: Client funds are held in separate accounts from the company’s operational funds, ensuring that your capital is protected from company liabilities.
• Negative Balance Protection: This feature ensures that clients cannot lose more than their deposited funds, protecting against extreme market volatility.
• Transparent Operations: Pepperstone adheres to international best practices, including regular audits and compliance with anti-money laundering (AML) policies.

While these measures provide a level of security, Ugandan traders are not covered by any investor compensation scheme. Therefore, due diligence and risk management are essential when trading with Pepperstone.

Opening an account at Pepperstone is a fully digital process but does require a suitability assessment that many other brokers do not carry out.

All Ugandan residents are eligible to open a trading account at Pepperstone but will have to follow the fully digital four-step application process. Once the process is complete, Pepperstone aims to approve applications within 4-8 hours.

How to open an account at Pepperstone:

1. Create your login via the Pepperstone website, you will be asked for your email address and asked to choose a password.
2. The second step is to take the Pepperstone suitability test. This short questionnaire is used by Pepperstone customer service to assess whether trading CFDs is appropriate for you. While most brokers omit this step in the account-opening process, it is a responsible move in an industry that is often accused of an irresponsible approach to consumer protection.
3. The third step is to confirm your identification. Pepperstone will need two ID documents from you; the easiest way to provide these documents is to take a photo of them with a mobile phone:
   • A photo ID (passport, driver’s license or ID card) and; 
   • A secondary ID (a bank or utility statement with your full name and address dated in the last three months).
   • Important: Pepperstone will not accept ID documents that are black and white images, scanned copies, blurry or damaged.
4. Once your application is approved, you can log in and fund your account in the base currency of your choosing.

Compared to other similar brokers, Pepperstone’s account opening process is fast, generally hassle-free, and fully digital. The only issue that some traders may have is the suitability assessment test, though this is a responsible move on Pepperstone’s part that protects the funds of those unsuited to high-risk investments. 

Pepperstone offers a similar range of instruments as other brokers but offers a wider range of Forex pairs. 

Neither the Standard Account nor the Razor Account has a required minimum deposit, though we recommend starting with a minimum of 200 USD to avoid margin calls. Trading costs on both accounts are much lower than most other brokers.

We opened and tested Pepperstone’s Standard and Razor accounts:

Pepperstone Standard Account

This commission-free trading account has no minimum deposit requirement. Costs are included in the spreads, which average at 1.00 pips on the EUR/USD. This account is one of the lowest-cost trading accounts in the world and is especially good for beginner traders who do not want to spend time calculating commissions. 

Pepperstone Razor Account

Pepperstone’s raw spread account is the Razor Account and has no required minimum deposit. Spreads average at 0.10 pips on the EUR/USD – which is the lowest average spread we have found at ANY broker – and a commission is charged per lot traded. Commissions change depending on your trading platform, the base currency of your account, and your trading volume. We confirmed this spread on the cTrader platform:

Razor Account Commissions

MT4 and MT5: Commissions on the MT4 and MT5 Razor Accounts are charged in the base currency of your account. We noticed how cheap the commissions are for traders with an AUD base currency when we opened our account. Given that (as of May 2022) the USD/AUD is currently at 1.41, the commission cost per lot with an AUD base currency is the equivalent of 4.98 USD – a saving of around 2 USD per lot when compared to an account with a USD base currency.

cTrader: The commission structure for cTrader Razor Accounts is based purely on what currency pair you are trading. The cTrader Razor Account commission is always 0.007% (round turn) of the base currency that’s being traded. So, if you’re trading 100,000 USD/CHF the commission will be 3.50 USD to open the trade and 3.50 USD to close the trade.

Active Trader Program

Trading commissions can be further reduced by becoming a member of Pepperstone’s Active Trader Program. The Active Trader Program has several advantages for high-volume traders, including discounted commissions, a free VPS service and priority customer support. For more information about the Active Trader Program, traders should contact Pepperstone customer support.

All three of Pepperstone’s trading platforms are available on both Android and iOS mobile devices and tablets. Beginner traders should be aware that there is some loss in functionality when compared to the desktop trading platforms, and poor mobile connections seriously impact trading.

cTrader App

cTrader is one of our favourite trading platforms, and Pepperstone is one of a handful of brokers that supports it. Its clean design makes it easy for beginners to pick up, but it also has the advanced order types and automation options required by more experienced traders. The Pepperstone cTrader app keeps most of the best parts of the desktop version, including the complete range of order types, price alerts, trade analysis, and symbol watchlists. It also integrates seamlessly with TradingView, an advanced charting tool:

TradingView

TradingView is free of charge for traders who open a live account. It is an excellent tool for researching, charting, and screening any instrument. Additional features of Pepperstone’s TradingView tool include:

• 50+ intelligent charting tools
• Over 100,000 custom user-built indicators and scripts
• Synchronised layout for multiple charts

Traders should note that TradingView is only available on the Razor Account.

MT4 and MT5 Apps

The Pepperstone MT4 and MT5 apps allow traders to work from anywhere, with nine timeframes, 30 indicators, and interactive currency charts. Functionality to close and modify existing orders, calculate profit/loss in real-time, and tick chart trading further assists traders while on the move.

With MT4, MT5, and cTrader all available, Pepperstone offers support for more trading platforms than most brokers. Additionally, Pepperstone’s cTrader integrates with TradingView, adding advanced functionality.

Pepperstone offers traders MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader, each of which offers Expert Advisors, automated trading support, strategy backtesting, customisable charting, indicators, and copy trading functionality.

All platform choices are free to use, all can be downloaded to your PC or Mac, and all have web versions of the platform. Traders who want more EAs to use, and don’t mind the dated interface, should consider using one of the MetaTrader products. cTrader is often a favourite for beginner traders as it requires less setup, has a more modern interface, and offers more advanced order types. Pepperstone’s cTrader also seamlessly integrates with TradingView, an advanced charting tool.

All three trading platforms offered are considered among the best in the industry, and all three provide access to Autochartist, one of Pepperstone’s range of free trading tools. While Pepperstone does not have its own proprietary platform, which is usually easier for beginners to learn, the choice of any of the three major platforms will keep most traders satisfied.

A well-regulated broker, Pepperstone ensures that all Anti-Money Laundering rules and regulations are followed, and as such, all non-profit withdrawals are returned to the deposit source. 

Accepted Deposit Currencies: Accounts can only be opened in USD or GBP. Because the Ugandan Shilling is not one of Pepperstone’s accepted base currencies, Ugandan traders with UGX bank accounts will have to pay currency conversion fees. Pepperstone charges currency conversions at the current spot rate, minus a conversion fee of up to 1 percent, which is relatively high. 

Funding Methods: Pepperstone accepts deposits and withdrawals via Bank transfer, Credit/debit cards, PayPal, Skrill and more.

Overall, Pepperstone has an average range of funding methods compared to other large international brokers, but no fees are charged, and processing times are fast.

Smart Trader Tools for MetaTrader4/5

At Pepperstone, MT4 and MT5 traders can benefit from this dedicated suite of 28 tools, expert advisors, and indicators. Smart Trader Tools help traders manage their risk, control all trades from a single terminal and view the correlations between currency pairs and other CFDs. The full set of tools includes sophisticated alarms and broadcast facilities, with up-to-date market data and functions integrated within the MetaTrader interfaces. 

Autochartist

Free for all Pepperstone clients, Autochartist is an award-winning automated technical analysis tool that plugs into MT4, MT5, and cTrader and scans all available CFD markets for trading opportunities. Autochartist’s advanced pattern recognition engine identifies the strongest potential trading opportunities and predicts future price movements.

API Trading

Pepperstone supports trading via its Application Programming Interface (API). This technology is ideal for those using trading systems or developing their own custom-built system. It allows an increased ability to see the depth of market and access to multiple liquidity providers.

Discounted VPS Services

Via two third-party companies (ForexVPS and New York City Servers), Pepperstone offers a discounted VPS (Virtual Private Server) service for traders using the MT4 and MT5 platforms. VPS hosting allows traders to run automated algorithmic strategies, including expert advisors, 24 hours a day, 7 days a week on a virtual machine. 

Both ForexVPS and New York City Servers have dedicated 24/5 customer support teams to help new users set up and install EAs and indicators directly to the virtual machines. VPS services have the advantage of never suffering connectivity issues and have extremely low latency due to their proximity to major international exchanges.

Social Trading

While Pepperstone does not offer a dedicated social trading platform, it offers support for both the Metatrader Signals marketplace and Duplitrade, a popular third-party trading strategy marketplace that allows you to automate your trading by following proven expert traders. 

While MetaTrader Signals can be followed by anyone using the Metatrader platform, the Duplitrade copy trading system is only accessible through Pepperstone with a 5000 USD (or equivalent) minimum deposit.

Pepperstone’s market analysis is less frequent than many other large international brokers, but the quality is excellent and available in both video and text.

Analysis Blog

The in-house Pepperstone research team runs a regular blog covering both fundamental and technical analyses. The research provides information on market-moving events outside of conventional news sources. The research team also provides a ‘Daily Fix’ – a day-to-day analysis of events affecting the markets. 

FX Evolution Webinars

Market analysis and trade ideas are available in both video and text form, and the quality is invariably high and useful for traders of all experience levels. In addition, Pepperstone has partnered with FX Evolution to deliver fortnightly webinars on a range of topics based on both technical and fundamental analysis.

Demo Account: Pepperstone offers an unlimited demo account allowing prospective traders to practice trading in real-time. New traders can also explore the full suite of customisable tools and features that the MT4, MT5, and cTrader platforms offer to enhance trading performance. 

Educational Resources: Pepperstone offers various educational resources, including free trading guides, articles on how to trade Forex and CFDs, various courses, and videos. Its guides cater to beginner, intermediate, and advanced traders. It also hosts regular webinars, and archives of previous webinars are available for free on its website. Trading guides cover topics such as ‘the Psychology of Placing Your First Trade’, Forex Trading Basics and how Forex trading works, and introductions to various trading strategies. It also offers MetaTrader4 and Forex trading courses. 

Webinars: Weekly webinars pick up where the structured education stops, with more detailed strategy sessions led by expert traders. The webinar subjects vary from trading strategies to technical and fundamental analyses. Note that one has to register a Pepperstone account to access the live webinars.

Pepperstone’s award-winning 24/7 customer service is available to help answer questions should you need assistance with either technical or account-based queries. For the purposes of the review, we tested the live chat services. The live chat agents were responsive and highly knowledgeable. As you can see, they responded to our questions within a matter of seconds: