Purple Trading briefly
The website purple-trading.com is owned and operated by L.F. Investment Limited. Purple Trading is a project supported by the Czech technology company Purple technology s.r.o. and the financial company L.F. Investment Limited, which is licensed by the Cyprus Securities and Exchange Commission (CySEC). The “Purple” brand was established in 2016 and defines itself primarily as a forex brokerage, so the widest range of instruments are currency pairs. In addition, clients can trade commodities, indices, and cryptocurrencies, through the popular terminals MetaTrader 4 (MT4) and cTrader.
One of the most important things you need to know about the company is whether and where it is regulated. L.F. Investment Limited is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC), under license number 271/15. It operates on the European market in accordance with the Markets in Financial Instruments Directive (MiFID) and is approved for the acceptance and transmission of orders, the execution of orders and the management of portfolios for many financial instruments. The company is authorized to provide investment services across the majority of the European Union.
There are three types of live trading accounts available that differ mainly in the spread and commission offered.
STP/Direct Market Access account – The company recommends this account for position traders who hold trades longer and want to pay only for spread without other fees.
ECN account – The company recommends this for intraday and logarithmic traders or for these who use scalping as their strategy. It offers direct execution at the interbank market. Spreads are derived directly from the liquidity providers and there is a commission, which will be paid with every opening and closing a position.
PRO account – Customers who are categorized as professional can use this type of account, which offers leverage up to 1:400.
There is the so-called Purple Trading loyalty program, which offers different benefits depending on the deposited amount. It applies to the ECN account and the commission decreases from USD10/lot (for deposits EUR100 to EUR1,000) to USD5/lot (for deposits over EUR60,000).
Market Maker or STP Broker?
We have found in the Order Execution Policy document that Purple Trading acts as an agent on the client’s behalf. The company does not execute the client order as a principal to principal against the client and the company is not the execution venue for the execution of the client’s orders. The company transmits client orders or arranges for their execution with the third-party liquidity providers. This means that Purple Trading uses the Straight Through Processing (STP) model to fulfill client’s orders, transmitting all of them to some of its liquidity providers. Therefore, there is no conflict of interest, and the company earns money only from the spread and commissions.
The same document reveals that all types of pending orders become market orders after their activation. This means that all types of orders are subject to slippage and will be filled at the next available market price; therefore, stop loss orders are not guaranteed.
In addition, the company provides all retail clients with Negative Balance Protection. The Terms of Business document shows that in case the client’s loss exceeds his available funds (balance of the account will be less than 0), the company will protect the negative balance of the retail client by making a balance correction on his account so the resulting balance on his account is 0.
In addition to usual fees there also is an inactivity fee. If the client account is inactive for six months or more, the company reserves the right to charge an account maintenance fee. Inactive accounts will be subject to a quarterly maintenance fee of EUR15 or the full amount of the free balance in the account if the free balance is less than EUR15. The inactivity fee will be charged at the beginning of each calendar quarter (3 months) thereafter. There will be no charge if the free balance is zero. Accounts with a zero free balance may also be closed.
Deposits and Withdrawals
Customers can use several deposit methods such as wire transfer (it can take up to 2 days for the SEPA payments), credit/debit cards (instant payment), Skrill and Neteller. There are some commissions depending on the deposit method and for example you will pay a fee of 2%, if you deposit by Skrill or Neteller.
Withdrawals should be made using the same method used by the customer to fund his trading account. They can be made via bank wire, credit/debit cards and e-wallets such as Skrill and Neteller. Fees depend on the chosen method and for example, credit cards withdrawals are charged with a EUR7 commission and these made by Neteller are subject to a 2% fee.
The company guarantees to process every withdrawal request within 1 business day.
You can trade via two of the most used terminals worldwide – MetaTrader 4 (MT4) and cTrader. cTrader has been developed by traders for traders, it is intuitive and easy to understand. You have access to markets and a range of tools and charts. cTrader can be run on both PC and mobile devices, as well as in all modern browsers. As the name says, cTrader application is compatible with C# language and .net frameworks, so you can build easily your own algorithmic trading strategies with the built-in code editor.
The MetaTrader 4 terminal allows users to trade in the financial markets providing all the necessary tools and resources for analyzing the price movements, making deals, and creating and using automated trading programs (Expert Advisors). MetaTrader platform is available as a desktop version for Windows and MAC machines, and as a mobile app for Android and iOS devices.
Forex – You have access to over 60 popular major, minor, and exotic currency pairs. The average spread for the EUR/USD pair depends on the account type and is 1 pip for the STP account and 0.5 pips for the ECN account. There is a volume-based commission on ECN accounts.
Indices – You can trade 9 of the major indices globally, such as DAX30, DJIA and CAC40. The average spread for the DAX30 is 1.5 points for the STP account and 1.1 points for the ECN account.
Commodities – 4 precious metals and 2 energy products are available for trading, including Gold, Silver, Crude Oil, Brent Oil. The average spread for the Gold is USD0.23/0.13 and the one for the Crude Oil is USD0.05/0.04 depending on the account.
Shares – There are 12 of the most traded Italian companies available but only with the MT4 platform. The commission is 0.25% and the shares are real, not CFDs.
Cryptocurrencies – 5 of them are available for trading in the ECN account only. They include Bitcoin, Litecoin, Ethereum, etc. The average spread for Bitcoin is USD2.15.
There is a dedicated educational section called Purple Academy, where you can find some articles, e-Books, videos, and webinars. Major topics such as Brexit, Coronavirus and the US elections are also covered.
Purple Trading has a CySEC regulation, which allows it to provide financial services across European Union. It uses the STP model to execute orders transmitting them to its liquidity providers. The company provides a wide range of trading instruments (mostly currency pairs) via the popular MT4 and cTrader platforms. There are two types of live accounts that differ mainly in the spreads and commissions. If you want to trade in conditions with narrow spreads, you must select the ECN account, where, however, commissions are charged.