Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Our GKFX Experiences: Top UK Broker
GKFX is a CFD and FX broker based in London that has been active since 2009. The broker waives a minimum deposit for two of its account types and allows for trading of the most important index CFDs with a 1.0-point spread. The typical spread in EUR/USD is 1.5 pips at the level of many other market makers. Compared to a large part of the competition, this broker stands out given its various MT4 trading platform extensions and its extensive training offering.
GKFX Evaluation – Pros & Cons
- No minimum deposit required
- British regulation and deposit guarantee
- Withholding tax is not deducted automatically
- Trade via MT4
- Many extras like TradeWorks and AutoChartist
- Market making
- No guaranteed exclusion of margin calls
Broker Review: Our GKFX Experiences
1. Trade Conditions: Market Maker with Competitive Spreads
- Spread EUR/USD: 1.20 Pips (Minimum), 1.50 Pips (Typical)
- Spread DAX, FTSE100, EuroStoxx50: 1.0 Points
- Spread S &P 500: 0.40 Points
- Spread DJIA: 2.0 Points
- Spread Gold: $0.40 (Typical)
One downside of the GKFX evaluation: When trading all underlying assets, this broker acts as a market maker. This means that bid and ask prices are defined by the broker and the positions of customers are realized through the broker’s counterparty position. Market making involves the risk of conflicts of interest, since brokers theoretically profit from their customers’ losses and could even cause them through various technical measures.
The extent to which conflicts of interest are actually relevant depends both on the technical infrastructure and the hedging policy of the market maker. In the best case, the opposing customer positions are netted internally and overhanging net positions are hedged on the financial market via an automated procedure. In this case, the market maker takes on the counterparty position to its customers both technically and legally speaking, but not economically.
GKFX market information
The broker offers three account types: One with fixed and two with variable spreads. The following remarks refer to the “variable” account type, which takes the middle rank in this broker’s quality hierarchy. The best account offers tighter, variable spreads. However, it a €25,000 minimum deposit is required, wherefore this account is not used as a basis for valuation in this test.
The typical spread in EUR/USD is 1.5 pips; the minimum spread is 1.2 pips. Further examples from the FX main currency pairs: USD/JPY 2.0/ 2.2 pips, GBP/USD 1.0/ 1.5 pips. FX trading is commission-free (as with most market makers). At $15 and with an average spread of 1.5, the cost of trading a standard lot in EUR/USD is nevertheless well above the cost of the best STP/ ECN broker on the market.
The spreads for the other underlying assets are a positive aspect of the GKFX evaluation. Particularly in the trading of index CFDs, the broker undercuts many of its competitors: The DAX, FTSE-100, EuroStoxx50, and Nasdaq-100 contracts can be traded at a 1.0-point spread (typical). The S&P 500 spread is 0.4 points, while the Dow Jones spread is 2.0 points. The typical spread when trading gold amounts to $0.4, while it is $0.05 for trading WTI US oil.
Rating: B
2. Underlying assets/ Trading Platform Offering: FX, Bonds, Shares, Indices, Commodities
In addition to FX currency pairs, the catalogue of underlying assets includes CFDs on bonds (excluding Bond Future), indices, and commodities. Via the “Fix” account type, CFDs can be traded for a few hundred individual stocks, including stocks from Europe in particular. In the trade of stock CFDs via this account type, a broker spread is due in addition to the market spread. For most UK stocks, this amounts to 10p.
GKFX Forex Trading
Although some competitors offer more underlying assets, the list of tradable products is a pro in the GKFX test report. It is generally desirable for FX brokers to allow the trading of CFDs for other underlying assets. Many trading strategies are based on trading signals generated by scanning processes, which are available in the required quality only when a large number of markets are considered. However, in some areas, the offer is still capable of improvement. In particular, the integration of share CFD trading into the variable account would be helpful.
Rating: A-
3. Order Functions of the Trading Platform: Fast Ordering through MT4 Boosters
CFD and FX trading beginners, who are interacting with an over-the-counter broker like GKFX for the first time, should pay attention to the available order types when comparing brokers. The more order types are available, the more precisely trading strategies can be implemented and the more easily losses can be limited.
As with all MT4 brokers, market orders and pending orders are available at GKFX. For a market order, the order is executed at the next best price. Pending orders are conditional orders. These include limit orders with a minimum or maximum price for execution. Stop orders define a price level at which a market or limit order is triggered. Orders can be combined with stop loss and trailing stop. In addition, it is possible to use trailing stop loss orders where, in the event of rising prices, the stop loss level is gradually increased, thus hedging the remaining unrealized profit on the market.
Another pro in the GKFX test: The broker offers customers the “MT4 Booster” extension modules starting at an account balance of €2,500. This includes various additional modules for MetaTrader 4, such as Alarm Manager, Trade Terminal, Correlation Matrix, Correlation Trader Sentiment Trader, Market Manager, Session Map, Excel RTD, and Mini Terminal.
Rating: A
4. Analysis Functions of the Trading Platform: Charts, Indicators, AutoChartist, and Market Insight
The MetaTrader4 trading platform is equipped with charting software that is sufficient for exacting standards. Numerous technical indicators (MACD, RSI, CCI, ADX, etc.) and drawing tools such as trend lines, trend channels, retracements etc. are included.
The broker offers a few more possibilities for market analysis. On the one hand, trading signals are published by Trading Central. On the other hand, the AutoChartist tool has been integrated into MT4. AutoChartist provides specific price-formation information, for example. Such tools are particularly useful for beginners who want to learn the basics of technical market analysis as part of their experience with GKFX or another broker.
GKFX provides the trading platform MT4
The brokers' customers have access to in-house MarketsInsight content. Current analyses, videos, and market commentaries as well as very concrete entry and exit signals for different markets are part of this offer.
Note: 1,5
5. Regulation, Deposit Guarantee, and Risk Limitation: FCA & Barclays Bank
The accounts are maintained in the UK: The Frankfurt am Main GKFX branch serves sales and service purposes only and is not comparable to a fully-fledged subsidiary. Traders, who are gaining experiences with a foreign broker such as GKFX for the first time, should note the different treatment of the withholding tax in comparison to German brokers. The broker does not automatically pay the withholding tax to the German or foreign financial authorities. Investors must calculate the tax themselves and pay this tax within the scope of their income tax return.
Given its London location, GKFX is under the jurisdiction of the British Financial Supervisory Authority (FCA). The customer deposits are kept in segregated accounts separate from the broker’s operating assets and are thus not at risk in case the broker goes bankrupt. Barclays Bank serves as the account-holding bank. In the event of a failure of the account-keeping bank and with regard to claims from open transactions against an insolvent broker, the liability commitment of the UK Deposit Guarantee Authority FSCS becomes effective. The UK regulatory environment is a major pro in the GKFX test, as the regulatory framework on the island continues to be crucial to the global financial sector.
The accounts are maintained in the UK: The Frankfurt am Main GKFX branch serves sales and service purposes only and is not comparable to a fully-fledged subsidiary. Traders, who are gaining experiences with a foreign broker such as GKFX for the first time, should note the different treatment of the withholding tax in comparison to German brokers. The broker does not automatically pay the withholding tax to the German or foreign financial authorities. Investors must calculate the tax themselves and pay this tax within the scope of their income tax return.
Given its London location, GKFX is under the jurisdiction of the British Financial Supervisory Authority (FCA). The customer deposits are kept in segregated accounts separate from the broker’s operating assets and are thus not at risk in case the broker goes bankrupt. Barclays Bank serves as the account-holding bank. In the event of a failure of the account-keeping bank and with regard to claims from open transactions against an insolvent broker, the liability commitment of the UK Deposit Guarantee Authority FSCS becomes effective. The UK regulatory environment is a major pro in the GKFX test, as the regulatory framework on the island continues to be crucial to the global financial sector.
Rating: B
6. 6. Automated Trading: MT4, TradeWorks, AutoChartist and More
Since automated trade continues to gain importance among both beginners and professional traders, the corresponding technical infrastructure is also part of the GKFX test report. The broker’s customers can take advantage of MT4 and AutoChartist. In addition, TradeWorks, a tool for the creation of mechanical trading systems without any programming skills, is provided.
Expert Advisors are considered the heart of MT4. The scripts based on the MQL4 programming language allow for the development of indicators and trading systems for all possible trading approaches. A back-testing tool, which allows for the rules of a trading system to be hypothetically applied to past periods, is part of the software.
Automated trading software TradeWorks
The broker describes TradeWorks as “cloud-based, automated trading software that allows you to optimize trading performance in just a few simple steps using an innovative and user-friendly technology.”
With TradeWorks, both the creation of new and the automation of existing trading strategies is said to be possible without time-consuming programming efforts. The tool guides its users through the development process step-by-step and, following the completion of a strategy, allows these strategies to be tested through a back-test. No download or installation is required for using TradeWorks. The tool is especially beneficial for beginners, who are gaining experience with the development of trading systems at GKFX, but do not want to learn a programming language right away.
Rating: A
7.Account Opening and Minimum Deposit: Four Account Types from €0 Minimum Deposit
GKFX offers a total of four account types: One (Corporate) is only available for business customers, while another account type (VIP) requires a minimum deposit of €25,000 and was therefore not included in this review.
Customers can choose between the “variable” and “fix” account types. The names reflect what these accounts are all about and refer to the spreads. Both account types are commission-free. There is no minimum deposit. Via an FX account, users can only trade FX currency pairs, commodities, and indices. Trading in stock CFDs requires the opening of a “Fix” account. Account management is available in EUR, USD, and GBP. Flat-rate account fees do not apply.
The account opening process is not accompanied by any surprises. The application form must be filled in on the screen and requires information on the customer’s financial situation and previous trade experience. Identity verification is necessary for account opening. Deposits are possible by transfer, credit card, and via various online payment service providers.
Interested parties, who want to give GKFX a try and do not want to deposit money immediately, can open a demo account. Once again, you can choose between the “fixed” and “variable” account type. However, it is not guaranteed that the demo account rates correspond to the live account rates. Opening a demo account is possible via an automated process without personal contact with the customer service department and without providing your complete address data.
Rating: B
8. The Broker & Its Competition: On the Market since 2009
The market position of a broker can play a role in assessing its performance. Brokers with a broad range and a strong negotiating position with respect to banks and other financial market participants can often realize more favourable terms/ rates, for example. For STP brokers, this applies in regards to the conditions of the liquidity pool and, for market makers; this applies to the hedging of overhanging net positions.
The football club AC Milan is sponsored by GKFX.
GKFX has been active on the market since 2009 and is a relatively young broker. The company was founded by several managers from the industry. Like many competitors, GKFX demonstrates its financial strength through sponsoring. The Italian football club AC Milan is sponsored by this broker.
In some regards, the broker markets itself very skilfully, which is an indication of great connections in the industry. Since May 2016, a video series with Dr. Gregor Bauer has been offered on the topic of technical analysis, for example. Dr. Bauer is the Chairman of the Board of the German Association of Technical Analysts (VTAD).
Rating: B
9. Additional Services and New-Customer Specials: Demanding Trainings
Via the “Training Offering” tab, the broker provides a variety of content concerning topics such as technical analysis, fundamental analysis, software, trading systems, money management, strategy, etc. The training offering is both serious and demanding. It includes videos, webinars, online courses, and tutorials. The video series featuring VTAD chairman Dr. Gregor Bauer contains nearly eight hours of footage.
The broker maintains a customer-referral program much like various competitors. Thereby, brokers take advantage of the personal connections of their customers to other potential prospective customers. If an existing customer succeeds in convincing a third party to open an account, the referrer receives a reward in the form of a credit to their trading account.
The premium amount depends on the volume traded by the new customer. From five lots, €/$/£40 are paid, from 20 lots, €/$/£200 Euro are paid, and from 50 lots, €/$/£500 are paid out. Generally, customer-referral programs are not a substitute for employment income. Individual premiums are quite realistic. In order to increase the chance of an account being opened, a personal GKFX experience report is recommended.
By contrast, classic new customer bonuses were rarely available in the past few years. The broker advertises additional services such as MT4 Booster, Trading Central, and AutoChartist in this context.
Rating: B
10. Customer Service and Online Presence: Competent and Very Accessible
The broker can be reached via live chat, telephone, and e-mail. As part of this test, customer service was contacted by phone and asked for details on the burden of financing costs. The customer support staff was able to answer all questions correctly.
The broker’s online presence contains no translation errors (unlike unexpectedly many competitors’ websites). The navigation menu provides users with a quick overview of the available content. From the main page, market information boards, the live chat, FAQs, and terms are accessible with one click. A clear statement regarding the market model can be found in the General Terms and Conditions (GTC) section.
Rating: B
Conclusion and Final GKFX Evaluation
The broker’s British regulatory environment, the renouncement of a minimum deposit, and narrow spreads in the trading of index CFDs especially are very convincing. The MT4 Booster, AutoChartist, and Trading Central make the broker’s offer even more attractive, which is also true of the educational offering that includes an almost eight-hour video series with VTAD CEO, Dr. Gregor Bauer. The biggest weakness is the broker’s status as a market maker. At 1.5 pips in EUR/USD, the FX trading spreads are competitive compared to other market makers, but significantly broader than the best STP brokers on the market. GKFX appears to be a good address for demanding beginners with solid ambitions in regards to their personal development.
Our GKFX Experiences – Rating: B+