Review and overview of JFD Bank

JFD Bank user-ratings: $500
10/10
10 of 10 points 1 reviews
  • Asset varierity - 10/10
    10/10
  • Trading platform - 10/10
    10/10
  • Support - 10/10
    10/10
  • Fees - 10/10
    10/10
  • Deposit/Withdrawal - 10/10
    10/10

Facts about the company:

  • Type: Forex and CFD Broker 
  • Regulation: CySEC (Cyprus), BaFin (Germany), and VFSC (Vanuatu)
  • Minimum deposit: $500
  • Demo account: Free
  • Markets: 1500+ Forex,  Metals, Physical stocks, Stocks, Indices, Commodities, ETFs, Cryptocurrencies
10/10
Comments Rating 10/10 (1 review)

Pros

  • Ultra-low trading costs
  • Deep liquidity
  • Post-trade transparency
  • Positive slippages and no requotes
  • First-class support

Cons

  • Fees are charged for trading

About JFD Bank

I don’t mind admitting it: I’ve known JFD for several years very closely. Before and during that time, we had real accounts with brokers like Consors, Comdirect, FXCM, Onvista and markets.com.

In addition, there were some demo accounts with Flatex, Admiral Markets, WHSelfInvest, DEGIRO, and a few others. All of them have their small advantages and disadvantages, but they all more or less form a single pap. Not so JFD. If we first take a look at the self-portrayal, it is already noticeable here that the broker falls somewhat out of the usual framework.

Screenshot of the JFD bank landing page

JFD is actually a large group of companies, recently named “JFD Bank” and consisting of three parts. On the one hand from the “JFD Group Ltd.”, which has its seat in Cyprus and is admitted and regulated from there by the “Cyprus Securities and Exchange Commission” (CySEC). Over this, the CFD business and beyond that many further services run within the European Economic Area (EEA).

On the other hand the group includes the “JFD Overseas Ltd” with seat in Vanuatu. There it is regulated and approved by the “Vanuatu Financial Services Commission” (VFSC) for all customers outside the EEA.

Finally, the group also includes JFD Bank AG, which has its headquarters in Munich and is consequently authorised and regulated by the German BaFin. This JFD Bank AG deserves a little more attention, as it gives JFD as a broker almost a unique selling point. However, I will come back to this later on.

It is also worth mentioning that JFD today has customers in over 130 countries with a reach from Europe to South-East Asia, making it one of the 20 largest online brokers worldwide (Source: Finance Magnets- QIR1 2016). They are also allowed to call themselves ‘Designated Sponsor’, which is active in the XETRA trading system. In addition, there are various exchange member, bank and liquidity partnerships with CBOE, Deutsche and Wiener Börse, LMAX Exchange, as well as with BNP and Wirecard Bank, to name just the most important ones.

To sum up:

  • One of the 20 largest online brokers worldwide
  • Regulated by the German BaFin
  • Regulated by CySec in Cyprus
  • Regulated by VFSC in Vanuatu

Founded out of ideological conviction

The acronym ‘JFD’ is intended to reflect the broker’s guiding principle: ‘just fair & direct’. In 2011 the current group was founded by a handful of professional traders who wanted to do everything differently. The focus was probably the often lamented lack of transparency in CFD trading. The founders were committed to making retail trading not only as transparent as possible but also fair.

Therefore JFD was from the outset as DMA/STP construct on the market. As such, the broker itself is not a market maker with its own dealing desk but acts purely as a mediating agent between the CFD trader and a large interbank pool, which also guarantees high liquidity. JFD thus consistently excludes any conflict of interest as it exists with the market maker. Orders are forwarded directly to the best price positions from the liquidity pool without any detour via the broker. The income is generated solely from commissions.

JFD Post-Trade Transparency

To underpin this principle, JFD advertises with a so-called “Post-Trade Execution Report”, which the broker is the only one worldwide to make available to its customers. In this report, the trader is provided with all information on each of his trades upon request. In addition to server log files, liquidity providers, and order matching or execution, this includes information on the exact times (latencies), slippage, and execution prices.

According to JFD, a majority of Forex and CFD online brokers claim to offer their services according to the DMA/STP Agency model but do not actually do so. To question this, every trader is encouraged to request this post-trade transparency from their broker. If you can’t deliver here, you shouldn’t waste your money and time with that either. Whether this is the case, I cannot judge and therefore leave it at that. In any case, this is a challenge to the other DMA/STP brokers to show the flag in the direction of transparency.

The interbank pool is to comprise more than 20 liquidity providers. These include both Tier 1 banks (i.e. banks with the highest core capital, which are also leaders in most banking product categories) and banks with the highest Tier 2 capital. Today, these include mainly J.P Morgan, Goldman Sachs, and Citi Bank), as well as non-banks and MTFs (multilateral trading facilities). With “access to non-traditional liquidity”, JFD even has access to “dark pools” as a prime broker.

The rich offer surprises with ‘Game Changer’ product

Meanwhile JFD has a wide range of products. At a glance, there are opportunities for almost all traders to invest money. The following assets are available for CFD trading:

  • Forex – 64 major, minor and exotic currency pairs
  • 2 Precious metals
  • 15 Indices
  • 600 shares
  • 7 Raw materials
  • 2 Bonds and notes
  • 25 ETF & ETN
  • 5 crypto-currencies

Since the beginning of 2019 it has also been possible to physically trade more than 600 shares from Germany, the USA, the Netherlands and France. There is an attractive special feature here. After the recently completed takeover of the German Acon Bank, JFD was the first broker to introduce completely free stock trading. A real game changer! There are no other holding costs, fees, restrictions or requirements regarding position size or number of trades – nothing. Sounds unbelievable, but it’s actually true.

The spreads alone are of course incurred. JFD uses the pricing of the CBOE (Chicago Board Options Exchange). Bid and ask are often only 1 cent apart, especially for many liquid Dax shares. However, the spread is not fixed and can at times diverge further than is the case, for example, via Tradegate or elsewhere. A spread widened by 2 cents or sometimes up to 4 cents is, however, quite bearable. Particularly in view of the zero-fees model and the fact that the shares are purchased physically on a permanent basis with all rights including dividend payments (less tax)!

Although it is not yet possible to transfer a securities account, this will also be the case in the near future. The only relative disadvantage is that physical shares, just like share CFDs, can only be traded within the main trading hours of the respective stock exchange. Over-the-counter trading is therefore not possible.

The leverage of the respective CFD products is of course also based on the regulations of ESMA in 2018 for JFDs:

  • Indices & Precious Metals: 1:20
  • Forex Major Pairs: 1:30
  • Forex Minor Pairs: 1:20
  • Equity CFDs: 1:5
  • Crypto Currencies: 1:2

For indices, currency pairs, and precious metals, trading with micro lots is possible. Currency pairs can be traded from a contract size of 0.01, indices, and precious metals from 0.10.

According to Christian Kämmerer, the “Head of German Speaking Markets”, options trading could possibly soon be part of the JFD Group portfolio.

Trading costs – is JFD still cheap?

Many brokers like to price their commissions into the spread. JFD uses a so-called ‘core spread’. This makes a lot of sense and has a particular impact on the effectiveness of stop loss and take profit orders. The spreads are highly competitive. In the Dax, the Core Spread is 0.9 points, in the Dow Jones 1 point (2 points before the exchange).


In FX pairs, JFD seems unbeatable as a forex broker in this regard. Here the spread in EUR/USD is between 0 and 4 pips (5th decimal place). In USD/JPY it is around 3 pips in the third place. For gold, it is around 24 cents on average. This is quite respectable. Of course, there are additional commissions. But even these are by no means excessive. In indices and commodities, 1/5 of the lot size is calculated, which for a CFD contract is equivalent to 0.20 Euro (round turn). Calculated on the spread, we still only get 1.1 points in the Dax.

In the FX pairs, there is a 5.50 Dollars commission per CFD contract (0.56 Euro for a 0.10 micro lot). This also corresponds to a quite acceptable 5 to 6 pips. The same applies to precious metals.

The small drop of bitterness is however with stock CFDs. Here the broker charges 0.05% of the order volume for European stocks or a minimum fee of 5.00 Dollars per half turn. For US stocks, 2 cents per share plus a minimum fee of USD 5.00 are charged. For buying and selling there is therefore a minimum fee of 10.00 Euro or US Dollar. This still corresponds to the common pricing model of other brokers. However, there are those such as FXFlat, for example, which charge considerably less commission (0.09% of the order volume or 4 cents per US share, but no minimum fee).

It would be nice if JFD could decide to adjust the prices also in this attractive range clearly downward and to drive the competition thereby (almost) finally away. All the more so when you consider that JFD has all the options after the takeover of Acon Bank. After all, physical share trading is completely free of charge. There 10.00 Dollars commission for the trade with share CFDs appears at least questionable.

Incidentally, in the case of equity CFDs that are held as long positions, dividends are largely passed on to the trader. In the case of CFDs, the payout percentage is 75-90% of the payout, depending on the country. Attention: in case of short positions, dividends are consequently debited from the account!

A look at the other CFD holding costs reveals nothing spectacular. If you hold a position overnight, the so-called swap occurs. Here JFD calculates 3% ± 3-month Libor throughout. This is slightly above the market average, which is 2.5%. However, the 0.5% markup is unlikely to be significant and the broker should be allowed to use it.

All in all, when measured against the other services such as post-trade transparency, free physical stock trading, and the extensive CFD offering, JFD is by no means too expensive. Compared to other brokers, they may not seem much cheaper. However, simply by splitting the trading costs into a low core spread and relatively standard market commissions, there is a significant benefit to CFD trading.

Diverse trading platforms for every taste

JFD is not stingy with the trading platforms on offer. In principle, the possibilities cover all standards for almost every trader.

  • Desktop version Metatrader 4+
  • Desktop version Metatrader 5+
  • Web browser version Metatrader 4+ and 5+
  • Mobile Trading App for Metatrader 4+ and 5+
  • Guidants’ for both web browser and mobile app

It is worth taking a look at the differences between the MT4+ and the MT5+ when making your choice. In my opinion, you should do without the meanwhile antiquated MT4 and always choose the MT5. Among other things, it is said to work faster in order execution.

JFD MetaTrader4

Although the user interface has remained almost the same except for a few details, the 5 version does not only offer some improvements in the graphical display. It also comes with additional indicators such as the Elliott waves and is interesting for programmers who want to enter their own indications or strategies.

JFD MetaTrader5

The main feature, however, is the significantly larger number of tradable underlying. In particular, the physical trading of stocks makes the difference in volume. Whoever wants to trade these, cannot avoid the MT5 anyway. By the way, it should be noted that the meta-quota license for the MT5 costs up to USD 50,000.00 again. Therefore, the offering of this platform alone should be a predicate for every broker.

JFD Mobile

Those who would like to make CFD trading absolutely over a web browser or on the Smartphone, are also well served here. I am not a friend of this, although ‘Guidants’ is a big exception. The website is characterized above all by numerous social trading tools, a very good news portal, and many expert accesses. With the possibility to log in to the JFD account via Guidants and trade there, trading is sensibly linked to the above-mentioned and many other features and thus offers a very good added value.

Even if other brokers such as Consors, Vitrage, or WHSelfInvest have cooperation agreements with Guidants, the strong integration of JFD is not surprising. After all, Guidants is a 100% subsidiary of BörseGo AG, whose founder & CEO Thomas Waibel is also a member of the supervisory board of JFD. But that can only be an advantage in the end.

USPs of Guidance

Numerous AddOns that can improve CFD trading

The attentive reader will have noticed the “+” behind MT4 or MT5. The reason for this is numerous AddOns for the respective platform. Almost all brokers offer such AddOns in some form or another. As far as I can overlook this, JFD might indeed bring the most extensive and smartest package.

One of the most important is certainly the mini-terminal ‘Market Depth’. With it market orders can be executed with only one click what is not possible in the conventional Metatrader. Besides, in the small additional window stop loss and take profit can be preset directly for the order.

Just as interesting is the ‘Stealth Order’, with which orders from the platform are only marked in principle. Only when the price level is reached, the AddOn turns it into a market order.

Furthermore, there is the ‘Sentiment Trader’, the ‘Correlation Trader’, an ‘Alarm Manager’ and many other useful features. However, not only the small helpers which appear in the navigator area of the Metatrader under “experts” are striking. One should also pay attention to the AddOns in the area “indicators”.

There you can find for example a self-explanatory ‘Candle Countdown’, a ‘Freehand Drawing’ to draw in the chart, a ‘High-Low’ display, Renko candles, and last but not least a pivot tool. JFD offers these tools as a free package. It can be downloaded from the website and installed via the EXE file.

Stereotrader at JFD Brokers

The Stereotrader in the MT5
If you want to save the AddOns and have everything at a glance, you can book the StereoTrader as a special feature via ‘My JFD’. This excellent tool is directly based on the Metatrader and professionalizes the CFD trading on the highest level. It enables you to place strategic orders, grid orders, intelligent orders, intelligent orders, and much more besides the simple one-click order entry with all presettings for stop loss, take profit and tradings. In addition, numerous other settings for trading can be set here, including the color layout of the chart image.

Special features are the possibilities of automated CFD trading, backtesting, and the unique limit pullback orders, which are not available anywhere else. JFD currently offers the Stereotrader for a 29.90 Euro license fee per month. The subscription has no term and can be canceled monthly.

JFD and the speed
Speed is everything, the “Flash Boys” taught us already. JFD is therefore promoting the use of fiber optic connections to the low-latency network of the Equinix Financial eXchange in New York and London, which promises “often less than 100ms”. Of course, latency is always dependent on other factors. In my case, the latency is between 90 and 120ms, which is at the limit of what is acceptable. Although this is not comfortable, I can’t complain about the quality of execution even in highly volatile market phases. Orders are executed excellently, often even with positive slippage. Requotes are not available at JFD!

If you want to have (much) faster connections, JFD offers VPS servers with ultra-short latencies from third party vendors who are in cooperation with the broker. JFD-Live customers get for example 50% discount with the provider “Fozzy” or 10% per month with “MyTradeHost”.

The account opening and capitalization

Opening an account is very simple. Guided by four input masks, you enter the relevant personal data, financial circumstances, and your own experiences. Finally, you upload a copy of your identity card and a utility bill (electricity, telephone bill, etc.) for identification purposes, which can be sent by e-mail or fax. If you want to take advantage of the option to trade US stocks, you will need to download and fill out the usual W-8BEN form.

After a successful check at JFD, you will receive the next working day a mail with the login details for the selected Metatrader platform as well as for “My JFD” on the broker website. There you can manage your account, book a Stereotrader license, and much more. The mail also contains a link to select the desired deposit method.

Concerning the deposit options, JFD has finally caught up. Now it is not only possible to pay by bank transfer, but also via “Instant”, Skrill, Safecharge, and Visa/Mastercard. But beware: apart from the free bank transfer or via “Sofort”, transfers via online payment providers are always associated with fees that you should check out beforehand. In addition, due to the anti-money laundering law, the amount once deposited is only paid out to this account again.

Financial parachutes at JFD

Since the regulation by the BaFin in 2017, private traders in Germany are not obliged to make additional payments anyway. Since mid-2018, this also applies to all brokers within the EU, including Cyprus, as a result of ESMA regulation. However, JFD had already abolished the margin call obligation sometime before.

The rules on margin closeout are also based on ESMA requirements. So the margin call comes as soon as the 100% of the margin is attacked. The closeout, i.e. the closing of the position with the highest loss or, if applicable, of all positions, occurs when the margin drops to 50%.

Support and further training at JFD

Here the broker definitely has a lot to offer. The support is available 24/5 by phone and chat. Mail inquiries are regularly answered very quickly and proactively. One of my inquiries because of a (so far only) execution problem resulted in credit without request.

In order to support the customer in CFD trading, JFD also offers numerous expert-guided webinars, seminars, live streams, and live trading events that can be used daily. An overview is available on the JFD website. Recordings of past events and extensive training materials are available on JFD’s own YouTube channel. In addition, JFD is now present and available at most trade shows.

Support available:24/5 via live chat
Telephone:+44 (0) 2031500779 (UK)
Adress:support@jfdbank.com
Languages:11

Conclusion

If you want to trade CFDs successfully, you need the partner with the best prerequisites. This brings JFD without a doubt. The broker is not an egg-laying wool-milk sow, because there are still some things which could be quite better from the trader’s view. The fees for trading equity CFDs and the somewhat scarce deposit protection should be mentioned here in particular.

JFD is therefore one of the very few brokers with whom I feel safe due to my experience. Trading is fun due to the wide range of products, communication is always very uncomplicated, goal-oriented, and personal. Everyone who wants to do CFD trading seriously and trade shares, in my opinion, there is no way around this broker. The motto “just fair & direct” is therefore also justified. Therefore a clear recommendation for JFD at this point.


Where is JFD Bank based?

JFD Bank has its headquarters in Germany and Cyprus which is why it is regulated by CySec and BaFin. Moreover, JFD Bank has branches in Bulgaria, Vanuatu and Spain.

What is the minimum deposit?

The minimum deposit of trading with JFD Bank is $500. Still, the price is justified considering the great trading possibilities, tools, and add-ons that are offered. Moreover, customer service is always happy to help when questions arise.

What payment methods are available?

Even though JFD Bank only accepted bank transfer for a long time it has now widened its payment portfolio. Traders can now choose between paying via bank transfer, credit card, and even e-Wallet services.

What markets are open to trade?

As JFD Bank is a Forex and CFD Broker those are the main markets to trade with. However, trading with physical products such as physical stocks is also offered. You can take a look at the website for more information.

One Response

  1. Andre Witzel September 21, 2020

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