Here Are the HFM Pros and Cons

HFM Fact sheet

HFM takes the safety and security of its client's funds seriously. The first indication is the fact that top financial authorities around the world regulate this broker. HFM is registered as a legal business entity in Saint Vincent and the Grenadines.

Additionally, there are several regulations that set the guidelines for HFM's code of conduct. The strict regulations ensure that the traders’ money is in safe hands. The complete list of HFM's regulatory bodies includes:

• FCA - Financial Conduct Authority (United Kingdom)
• DFCA - Dubai Financial Services Authority
• FSCA - Financial Sector Conduct Authority (South Africa)
• FSA - Financial Services Authority (Seychelles)

These authorities are responsible for the business conduct of financial institutions in different regions. As the broker is regulated by the top guidelines, it gives a sense of trust and confidence to the trader.

The broker discloses the license number of each legislation they follow, and after checking the license number in the relevant registry we have found that licenses are active and valid, so you can be sure that HFM indeed abides by these regulations.

Security of funds

There are additional safety measures the broker undertakes, such as negative balance protection, segregation of funds, and a trader’s insurance scheme.

With the negative balance protection, if a user trades on margin using the broker’s leverage, and if the trade goes in a losing direction, the trader’s equity will never drop below zero, and the trader will never be indebted to the broker because the market position will automatically close once it hits rock bottom.

HFM broker keeps the traders’ funds in different bank accounts separately from the broker’s account, which means that the trader’s money is kept off the balance sheet, and cannot be used to pay back creditors. This way, traders at HFM are safe if the broker files for insolvency.

Additionally, HFM participates in a civil liability insurance program of up to €5 million, and this ensures the traders and creditors if the broker defaults and goes bankrupt. This insurance scheme protects the traders from any practice of fraud, negligence, or misconduct executed by the broker.

HFM broker offers one of the largest varieties of tradable products in 7 different markets. You can find more than 3,138 securities that can be traded in Forex, commodities, indices, bonds, ETFs, stocks CFDs, and physical stocks. 

Having access to a large number of tradable assets is super desirable for every trader, and regardless of the trader’s preference or experience, HFM broker has something for everyone.

On the downside, in case you’re interested in trading digital coins, you will not find any physical or coin CFDs on HFM's platforms.

Besides this huge offering, the spread and allowed leverage vary between different markets, which we are going to explain in a detailed manner in the following.

Forex

HFM offers major and minor currency pairs for trading. Unfortunately, you won’t find exotic ones with this broker and to be honest, most traders avoid trading exotics anyway due to low liquidity and high spreads. Thus, this might not be a dealbreaker for you.

On the upside, the spreads offered are tight, and the broker offers different types of accounts to meet the needs of various types of traders. Leverage for trading Forex can be up to 1000:1, depending on your country of residence. For example, clients from Great Britain will experience 30:1 leverage due to FCA's strict regulations. In addition, the average spread on EUR/USD with this broker is 1.3 pips, which is reasonable. 

Commodities

Adding commodities to the watch list helps expand the trading portfolio, and there are different types of commodities that you can find on the HFM website.

You can find precious metals such as gold, silver, palladium, platinum, and copper with tight spreads starting from 0.008 for copper. The maximum leverage available varies for each commodity. You can use up to 20:1 for trading palladium futures, 100:1 for trading silver, and 200:1 for trading gold against USD or EUR.

What’s more, you can also trade Brent oil and crude oil using spot or futures contracts. The spread floats depending on the market conditions and the minimum it can get for the UK Brent oil is 0.07 pips. The leverage offered also changes, and it’s 50:1 for crude and 66:1 for Brent oil.

Agricultural commodities are also available for trading. HFM broker offers different products such as cocoa, coffee, cotton, and sugar. These agricultural commodities incorporate tight spreads starting from 0.06 for sugar, and floating leverage of up to 1:66.

Indices

You can find 11 indices as well as 12 index futures to trade with HFM. These indices cover different markets from various regions including US indices, UK indices, German, French, Australian, and more.

Spreads vary across different index types. An average spread for trading US 500 is 0.41 pips and the maximum leverage you can use while trading on margin is 1:200.

Stocks

HFM offers both real and CFD stocks. There are certain benefits and drawbacks to trading each asset type. 

Physical stocks are preferred for long-term investors as usually, there’s no leverage offered and swaps are not charged for keeping positions longer than a day. On the downside, physical stocks are taxed by certain governments. But overall, they are a great way to invest for the long term. HFM offers access to trading 2,170 physical stocks.

Stocks as CFDs are preferred by financial speculators that are only interested in short-term gains. On the upside, stock CFDs can be traded using leverage. HFM offers 5:1 leverage for trading 891 stock CFDs. Spreads start from as low as 0.01 USD or 0.02 EUR depending on your account currency. Another benefit of trading CFDs is that traders can benefit from prices going in any direction, long or short since they’re trading contracts and do not actually hold the real asset. 

Bonds

Bonds are financial instruments issued by different entities such as governments or corporations and enable investors to lend money to the issuer. Bonds have expiration dates. Generally, bonds are viewed as safe investments and are characterized by low-risk, low-reward ratios. As a result, not many brokerage firms offer bonds in their portfolio. 

HFM provides access to trading 3 major bonds as CFDs, namely Euro Bond, UK Gilt, and the US Treasury Note. 

You can diversify your trading portfolio using tight spreads starting from 0.05 pips, the broker also allows you to use leverage up to 1:50. 

ETFs

Exchange-traded funds are another trading option that some traders consider safer security with low volatility, and if you prefer this type of trading, HFM has something for you.

You can find more than 30 ETFs that range between different sectors, such as real estate, energy, or sports betting. ETF trading on margin is also possible with safe leverage up to 1:5. The spread on ETF is floating, and it changes depending on the exchange. 

There are five different types of trading accounts to choose from. Which makes HFM a great destination for many different types of traders. Each trading account entails a different minimum deposit and different maximum leverage. 

Spreads and commissions are variable and depend on the market conditions, account type, and markups from the broker. Spread-free accounts or accounts that promise spreads from 0 pips, give you market prices on spreads, on the other hand, they charge you for financial services using a commission. In case you are a high-frequency, active trader, you might prefer to pay less on spreads and more on commissions and vice versa. Position traders generally prefer commission-free account types. Let’s discuss each type offered in more detail. 

Pros & cons of types of accounts

Micro account

This HFM trading account type is designed for traders who are new to the Forex market and are making their first steps. Using the Micro account, a trader can place market orders with a minimum contract size starting from 0.01 lots, and a relatively lower deposit requirement.

Traders using HFM Micro accounts have full access to all financial instruments, and they can use every trading platform provided by the broker such as MT4 and MT5. 

The maximum leverage offered for this account type is 1000:1. Spreads start from 1 pip and there’s no commission charged. You can open the Micro account with as low as 5 USD or that equivalent in 4 account base currencies: EUR, USD, NGN, and JPY.

Micro accounts are very useful not only for beginners that are trying to test the waters but also for experienced traders that are trying to test their trading systems without risking too much money.

Note that there are no added commissions to this trading account, and the trading fees are incorporated into the spread.

Premium account

The Premium account type is aimed at experienced traders that like to plan their trades more and place fewer orders than many intraday traders. The minimum initial deposit required to open the account is $100 or the equivalent in your account base currency (EUR, USD, NGN, JPY).

There’s no commission charged for trading. On the other hand, traders will experience a 1 pip spread markup fee from the broker. You can access all types of assets offered by HFM using the Premium account. 

The maximum leverage available is 500:1. High leverage is not always great. Keep in mind that leverage is a double-edged sword, and it can increase your rewards as well as your losses. Therefore, traders need to choose their leverage with caution. 

Zero-spread account

Zero-spread accounts are the preferred choice of high-frequency and algorithmic traders. A fee structure is more beneficial for short-term trades.

As the name implies, this account allows you to trade using a raw spread of 0 pips without any price markup. The leverage offered is up to 500:1. You can trade using an HFM Zero-spread account with a minimum deposit of $200. On the other hand, you will be charged with variable commissions: $6 for USD major pairs per round-turn lot and $8 for USD minors.

PAMM (Premium) account

HFM broker offers a percentage allocation management module (PAMM) account type, where multiple investors put their money into a pool that an account manager uses to invest in different markets.

There are two types of PAMM accounts. You can either use the previously mentioned Premium account, or an additional Premium Plus account with a smaller spread starting from 0.4 pips, but with a fixed commission of $8 on a round-turn.

HFCOPY trading account

This type of account includes two subaccounts – the strategy providers and followers, and you can choose to trade using any of these two types.

If you choose to be a strategy provider, you can start by depositing at least $500, build your trading strategies, and create your followership base, where you can earn 50% from followers’ fees.

However, if you join this type of trading as a strategy follower, you need to deposit $100 at least and start copying the strategy provider’s trading tactics for a fee.

You may only use US Dollars for this type of account, and if you are a provider you can get up to 1000 followers. Also, the trading instruments are limited to Forex, indices spot, energy, and gold spot contracts.

There are no commissions on any side of the trade, and the spread varies according to the market condition starting from 1 pip.

Islamic account

HFM broker is trusted by many investors who look for trading according to the Islamic faith, and want to keep trading righteously. HFM's Islamic account does not come as a separate type of account, rather, it converts another type of account into a swap-free account.

You can turn a Micro account, Auto account, Zero-spread account, or Premium account into an Islamic account. With this type of account, you can only use MT4 for trading, and you may use USD or EUR as your account currency.

There are no limitations on the financial markets that an Islamic account can access, with a changing spread that starts from 1 pip.

Demo account

HFM demo account enables you to practice your trading strategy or to get familiar with the trading interface. Any new/existing user can open a demo account.

The demo account can be used on MT4 or MT5 trading platforms, in a simulation of real trading scenarios. You have access to the same financial markets and real-life market conditions.

Once your demo account is set up, the broker provides you with up to $100,000 of virtual test currency to start trading and testing your trading strategies.

Getting started on HFM - Main steps

In order to get started with HFM, there are a few steps you need to take. Registration takes around 3 minutes. The registration process is user-friendly, and we’ll guide you through the entire process.

Step 1: Provide your preliminary details

First things first, go ahead and open the broker's main page. You’ll be able to see “Open Live Account” in green in the top right corner of the page. 

Fill in the application by providing your personal data. Click “register” and an email will be sent to you with the activation link. Check your email and click on the activation link. After that, you will be redirected back to the HFM website to complete the registration process.

Step 2: Complete your profile

In the myHF area, you will be asked to complete full information about your account, and your trading experience. 

You will need to insert more detailed information such as your tax number, your address, and your nationality.

In addition, you will be asked some questions regarding your trading experience, which financial instruments you are familiar with, and for how long you have been trading. Checking your level of experience is requested by strict regulators to protect traders’ interests.

Step 3: Upload documents

The next step is to upload the required documents by the regulatory authorities to ensure the trading platform is clear from any money laundering activities, and that no blacklisted personnel is involved in trading. 

There are two types of documents required for verification: proof of residence and proof of ID. You can submit a copy of either your passport, national identity, or driving license to prove your identity. As for the proof of residency, you can provide the broker with a copy of the utility bill or government-issued document that clearly shows your address. 

Step 4: Start trading

The final part is choosing your trading platform, depositing funds into your account, and starting trading. There are MetaTrader 4 and MetaTrader 5 to choose from. Don’t forget to download and install mobile apps that are available for both Android and Apple devices. 

Once your trading platform is ready, you are ready to make your first deposit. Choose the payment method that you want, and fund your trading account to start trading and making money.

Inactivity fees

HFM broker charges a fixed fee for inactive accounts. If there are no trading activities or no transactions for at least 6 months, the account will be considered dormant.

Dormant accounts will be charged a fixed fee of $5 monthly up until a year. If the inactivity period extends to between 1 year and to 2 years, the broker will increase the inactivity fee to $10.

Moreover, if the inactivity status prolongs for more than 2 years, the broker will charge $20 monthly, and in the subsequent years, the inactivity fees will increase by $10 every year.

Keep in mind that your account will never go negative. Therefore, inactivity fees will not be charged in case your balance is less than 5 USD. 

Methods of payment

HFM does not impose any fees on deposits or withdrawals from its end. However, some intermediary financial companies might charge you transaction fees. Bank wire deposits are free if the deposit is above 100 USD. PayRedeem might charge you deposit fees and crypto payments are charged with withdrawal fees of 1%. All other options are free of charge.

Comparing HFM fees to other brokers’ fees

HFM offers reasonable trading fees across various account types. In order to better understand the difference between HFM and competitors, let’s compare commission-free accounts side by side.

HFM vs Interactive Brokers

*Inactivity fee was eliminated by IB in 2021, it used to be $20/m

HFM vs eToro

HFM vs IG fees

HFM offers a sufficient selection of trading platforms that can be used on various devices. MetaTrader 4 and MetaTrader 5 are compatible with your PC, Android, and Apple devices. What’s more, you can access assets via a web trading platform. 

MetaTrader platforms are well known for their reliability which is the reason why they stay relevant in the modern world. MT4 was developed in 2005 and despite its old-fashioned design, most Forex brokers offer the trading software to their clients. MT5 was released 5 years later, in 2010, and offers access to a wider range of trading assets. Note that MT4 was designed for and is still mostly focused on Forex trading.

MetaTrader is one of the most commonly used trading platforms in the world, and these platforms are mostly used by reliable brokers that are well-established.

MT4 and MT5 platforms on HFM come with more than 30 technical indicators and more than 30 embedded analytical tools. These platforms also enable traders to hedge their positions. 

HFM enables you to keep track of your market activity when you are on the go, using the modern mobile app. The app can be installed on any Android or iOS device including iPhones and iPads, which makes it easier for traders to conduct transactions from anywhere.

The mobile app provides traders with a full set of market and limit orders. However, it’s not recommended to conduct market research using your mobile. Successful traders plan their trades and trade their plans. In order to trade professionally, you need a PC screen where you can see more clearly. However, mobile apps are quite handy in emergency situations like power outages and computer failures. HFM's mobile versions of MT4 and MT5 provide all the necessary features for monitoring your trades effectively. 

There is a large variety of research tools and educational material provided by HFM. The trading tools such as the economic calendar and calculator give you a better insight into the markets. Whereas, educational material is essential for novice traders to become professionals. 

You find webinars, video tutorials, training videos, and courses that help beginners understand trading from scratch. Even experienced traders will find the material offered by HFM useful. 

Having proper support is one of the most important factors in choosing the right broker. HFM incorporates several communication channels with traders. Customer support offices are located in 10 countries and clients can communicate with local and global offices over the phone, email, or chat live straight from the broker’s main web page. Customer support is available 24/5.

The HFM live chat provides a fast solution for users requiring urgent support. The communication was smooth and their customer support agents were able to answer trading-related inquiries in a professional and timely manner.

Throughout this HFM broker review, we have analyzed all the products and services available, and we found a clear consistency in the offers and a clear statement of the services. 

HFM is regulated by several top-tier authorities, and it follows very strict guidelines including segregated bank accounts, negative balance protection, and an international insurance scheme.

Additionally, the broker facilitates trading for its users by imposing a zero-fees policy on deposits and withdrawals and offering a wide range of tradable assets using several trading platforms. On the downside, there’s a $5/m inactivity fee after 6 months of inactivity, and this becomes worse and worse the longer the account remains inactive.

What makes HFM stand out from the competition is the huge variety of trading assets available. Nowadays, most brokers offer Forex, indices, commodities, and stocks as CFDs, but very few can offer physical stocks as an added bonus. With HFM you can trade more than 3138 instruments, out of which 2,170 are physical stocks. It’s worth mentioning that the broker doesn’t offer cryptos.