HotspotFX Review
I have seen several people recommend HotSpot FX on various forex forums so I began to find out what all the fuss was about.
Live & Demo Differences
Several things stuck out immediately about HotSpot FX’s demo platform, these were:
1. You could not use the “Orders” button – this hampered my ability to place stop orders, limit orders and OCO orders; and
2. Prices were delayed.
I was a little disappointed with their demo platform.
Not knowing about their “Order” process (due to the demo limitation) I decided to read their user guide to find more about it. Here’s what I found:
1. Stop, limit and OCO orders must be placed within 10 pips of the current market price… nothing new here, but…
2. If the market was within 10 pips of a stop/limit/OCO order you could not amend or cancel that order!!!
Be careful when placing your orders people!!
What We Liked About HotspotFX
The ability to place limit orders inside the spread. Strangely enough when a limit order is placed on the screen the limit order can be amended and cancelled, it is only when you click on the “Order” button and enter a limit order that allows the previous problems mentioned above to be encountered.
I loved the market depth idea as this gives a whole new dimension to the forex market.
You can split your position, which is handy for those who like legging out of their position.
What We Didn’t Like About HotspotFX
I needed US$7,500 as the initial opening deposit. I don’t know why they demand such a high price, but it could be to get rid of all those pesky reviewers who like to place only small amounts of cash in, and who ask so many annoying questions.
Another minor issue was that they also charged commission of US$3 per 100k lot – which amounts to US$6 round turn. This is a minor cost as each tick is US$10 (for those currencies where the USD is
the base, such as EURUSD, GBPUSD etc), so once you have made one tick you are already in front.
The highest leverage that HotSpot FX offer is 50:1 and once your account exceeds US$100k they drop this to 33:1.
In summary…
Hotspot FX PROS
- Market Depth
- Place limit orders inside the spread
- Ability to split positions
Hotspot FX CONS
- Cannot amend or cancel orders within 10 pips of the market price
- US$7,500 opening balance required
- Commission of US$6 round turn per 100k contract
- No mini accounts
- Highest leverage set at 50:1
Is there a whole lot to like about HotSpot FX? For me personally – not a whole lot. Which surprised me as I had seen so many good recommendations from professional forex traders and was expecting something BIG, but maybe that’s the difference – professional forex traders like it. For little people (like me) I think HotSpot FX wouldn’t be our preferred broker, but they have made one giant step in the right direction with market depth and allowing the user to interact inside the spread.
If you have had experience with HotspotFX we would like to know how you have gone with it, please add your review below by clicking on “Leave A Comment”
Tags: Forex Broker, HotspotFX, FX HotspotFX, HotspotFX com, Hotspot FX, FX Hotspot, Hotspot Forex
October 11th, 2005 at 7:46 pm
I had a friend who actually used to work for them.
In his words the company is very badly run, they are buying time till they get sold.
December 13th, 2005 at 9:46 pm
Anon,
Are you sure of that? I’m thinking about accepting a job offer from them!
June 13th, 2006 at 4:52 am
Hotspot rules. “Anon” is employed with a competing broker.
August 9th, 2006 at 11:45 pm
Eric,
Would I be able to contact you to speak to you about Hotspt?
Thanks,
Steve
August 22nd, 2006 at 12:35 am
“Zero” commission trading is just a phrase for traditional dealing desk brokers to catch newbies who think they are getting a benefit. Brokers don’t make money on commissions but spreads. Anyway, so called “commission” that HotSpotFX charges is not really a “CON” but a “PRO” for the trader. At least you know what you are paying for upfront and it is transparent. Non-dealing desk brokers are the way to go. The $7500 minimum deposit is also a positive IMO.
August 31st, 2006 at 12:29 am
The reason why they ask for 7500 could be the following:
1. They don’t allow mini lots so if you take a loss of 50 pips that means you lost 500 bucks, and with $7500 in your account that is a 6% drawdown. Now, losing as much as 6% in one trade is unacceptable to every single professional traders I heard of. That is why, 7500 dollars is actually kind of a risky minimum investment to start with when you are trading real lots. I’d rather start with 10-15k instead. Now, if you ask why do they not offer minilots, that’s because minilots don’t exist in the interbank market, as hotspotfx seems to be a true ecn, they don’t take the other side of the deal, they just pass it on to the market and market does not take orders below 1 lot. Now, you will ask me how do the other brokers deal with mini lots? Here is what they do:
a. The scammers just take the other side in hope that you will lose and they will win because statistically 95% traders lose no matter what they do, so the broker wins if he acts as the counterparty.
b. Some other brokers who are a bit more honest would match their own customers’ mini orders with each other and when there is an excess of orders in one direction, they would hedge. Now, even these brokers are not to be trusted all the time because in fast moving markets if their customers are all trying to trade in one direction, there is not enough people to take the other side and they can’t hedge their position fast enough, so what do they do then? they create artificial HUGE spread to make sure by the time they hedge their positions the market has not moved as much as to cover the spread. That is how somewhat honest Oanda works.
Now, from the above discussion as you can see if you want to see the real market and don’t want to deal with artificial huge spread, a true ecn is the way to go and dealing in the real market is not cheap. But if you don’t trade in fast markets and prefer non-news times, then I guess you can try other brokers too.
Good trading to all,
kk
September 4th, 2006 at 11:39 pm
I have had a live account with HotSpot for only a couple of weeks, and agree that they have plusses and minuses. Firstly on the negative, their demo does not have the ability to place entry orders, stop Loss, and OCO’s. Secondly, entry orders on the live account have to be sent on from HotSpot to the counterparty bank manually, which is a very slow process to get confirmation that the order has been accepted. Upwards of a minute. Thirdly with their OCO you cannot place an Entry Stop Buy and an Entry Stop Sell. You are only able to place a stop and/or a limit on an existing order, or alternatively you can have an Entry Stop Buy and an Entry Limit Buy. Fourthly you cannot place a stop on an Entry Order until that order is activated. In other words it becomes a market order.
On the positive side they have the quickest fills on Market Orders I have come across in more than three years of trading, having tested more than a dozen brokers in that time. You have the choice of a one click or a two click trade.
Depending on your trading style they are an alternative, as they are a true ECN without a dealing desk,
March 12th, 2007 at 10:34 am
Good liquidity during quiet market. A little empty during news, but normal.
November 14th, 2007 at 2:40 am
All you people saying that Hotspot is an ECN, did you not read the following on theis site:
“Who is the counterparty to my transaction?
Hotspot FX is the counterparty to all transactions. “
December 15th, 2007 at 9:17 am
I think Greg asked a really good question above. The same page says all deals are transacted “instantaneously”. From what I understand an ECN is supposed to match your order with someone else’s. Shouldn’t the counterparty be whomever owns that other order? Wouldn’t that transaction take at least a few fractions of a second to take place?
December 27th, 2007 at 10:18 am
Greg,
“Hotspot FX does not trade against client orders, take the other side of client trades, we do not profit when our customers lose money.”
http://eu.hotspotfx.com/why-hotspot-fx/how-we-do-business/
January 29th, 2008 at 4:24 am
Regarding the counterparty issue, in my understanding a broker can be an ECN and a counterparty to each and every transaction that occurs in their platform in the same time. and the key here is that there is a distinction between an ACTUAL counterparty beneficiary and a LEGAL counter party who acts as a risk less principle and a facilitator of the transaction, in actuality the counterparty to your transaction in an ECN is another bank or user/trader of the ECN whoever offer the best price for your transaction, but in either cases you don’t have a direct LEGAL agreement with this counterparty as a retail trader you are not authorized by law to act as a counterparty. so the ECN plays that legal role by having an agreement with you and with banks and other traders in the ECN and acts as the LEGAL counterparty to all but have no real interest as to the outcome of the trade, this is where the term risk less principle comes from.
Now as to weather HOTSPOT FX is an ECN or not, they say they are an ECN but the terms in their contract give them authority over account and trading position, way more than an ECN would need to act as a facilitator of transactions, in a straight through processing or ECN arrangements, i wonder why they give themselves all that power and what they use it for?!
September 16th, 2008 at 5:46 am
Hotspot fxr has it advantages and disadvantages. If you try to trade between 20.00GMT and 02.00GMT, you will find their spread is an absolute shocker! sometimes more than 25pips. I have a video recording of their live platform and as soon as i find a site to post these, i will give you guys the link. imagine placing an entry order to buy, for example, eurusd for 1.4458 and the order was filled at 1.4469 and price never got to 1.4469 as evidence by the charting software they provided. Trailing stops do not exist. If you close your trade as a market order and failed to cancel your stoploss/take profit orders, hotspot fxr platform willl execute these as market orders if price gets to those levels.