CMC Markets Singapore – A Personal Review

CMC Markets is a CFD/Forex broker. I opened an account with them not too long ago. I got to know CMC through my investing mentor. He mentioned that it provides a good technical analysis introduction course for beginners and that’s the main reason why I signed up with them.

You can open an account with CMC Markets them for just S$2,000.

Here’s what I get from them when I opened an account. All the things mentioned below are FREE:

  1. 1-day Trader Course
  2. Trader Continuing Education Courses
  3. One risk-free trading day on “Trade IQ Hongkong33 Index CFD”. Profits you keep. They keep your losses.
  4. 8 modules trading education CD packages.
  5. Technical analysis cd-rom
  6. Pschology of trading cd-rom
  7. Free subscription of “The Edge Singapore” magazine for 3 months.

cmc markets singapore starter package

Previously they had a 2-day technical analysis (TA) course. However, they changed it to a 1-day trader course. I asked why and they said some participants felt 2-days course are too intensive, so they changed to a 1-day course. But there will always be on-going courses where they hold frequently which they will touch more on in-dept TA, forex, how to use their platform etc. And you have to be their member to attend those courses.

The 1-day trader course outline which I had attended:

  • A start into the world of CFDs
  • Introduction to shares and CFDs
  • Essential of Foreign Exchange Analysis
  • Beginners for commodities trading
  • Importance of technical analysis

They taught on margin and liquidation, risk management, position sizing, trading plan, list of shares for shorting/long, intro to forex, simple TA like moving average, fibonacci retracements etc.

They didn’t touch a lot on TA in the trader course. Basically it’s just an introduction course. Personally I learned something because I didn’t really know a lot on trading/CFDs/technical analysis back then. Of course, I have more knowledge now after reading a lot of books and have starting trading too.

Trading Platform

CMC Markets uses a desktop-based software MarketMaker for their platform. They also have a web-based platform. You can log in and trade as long as you have an internet access and you are not bounded to your laptop. The desktop MarketMaker has more features and a little bit more advanced. But I adapted to it pretty fast after “playing and exploring” for a short while. You don’t really need to read the pdf manual to know how to use it.

Commissions

For Singapore shares, the commissions are 0.1% (min. S$15). For US shares, it’s US$0.02 per share CFD (min US$10). Well, besides shares, you can also trade indices, commodities. Margin requirement normally ranges from 10%-20%. It’s quite standard.

Update: With the new platform, CMC Markets does NOT have a minimum commission. Please refer below for the new changes.

Capital Protection

Since we are doing margin trading on CFD/Forex, we need to deposit our money with them. So, I did some research to check whether our funds are safe just in case our broker closes down suddenly.

CMC Markets Singapore holds a Capital Market Services license. An important feature of such brokers is the segregated account they employ to hold traders’ funds. These accounts separate customer funds from the brokers’ funds. If the broker goes bust, traders are still able to withdraw their money.

The common ones such as CMC, Igmarkets, Cityindex etc are all regulated by MAS and they have a local office here in Singapore. So you know your funds are safe with them.

Here is the list from MAS:
http://masnet.mas.gov.sg/fin/findir/SDWFIDIR.NSF/Leveraged+Foreign+Exchange+Trading

Customer Service and Comparison With Other Brokers

So far, I am still quite pleased with CMC Markets Singapore. They have pretty good customer support. I send them a few emails and they responded quite fast. They also have a “live chat” incorporated in their MarketMaker. Once, I tried to chat to see whether a real person will really respond to me in real-time. I didn’t really did an in-depth comparison between CMC with other brokers, although I did tried CityIndex and Igmarkets demo accounts. As long as I am still satisfied with CMC, I will just stick to them.

UPDATE (17 Sep 2011)

CMC Markets has upgraded to a new platform – Next Gen Platform, and I have migrated to it. This a very major change and I like what I saw. Some of the changes include:

1. No minimum commission

“Next Generation trading platform commission is no longer charged on company CFDs (share CFDs). However, a transactional cost of trading is built into the spread.”

2. Customized Leverage

Traditionally, a CFD broker has a fixed trading margin required, say 10% for stocks (i.e. 90% leverage). Under the new platform, you can customized your leverage. Be it 10%, 20%, 50%, 80% or 0% leverage. If you use NO leverage, which you fork your own money and paid in full, you don’t have to pay any financing fees. You choose whatever you are comfortable with.

3. Trade Directly From Chart

This is the one I like best. Normally, you have to key in your stop-loss level, limit orders manually. But with the new platform,  you can set your stop-loss/limit order directly from the chart itself. It is very visual and it’s very easy to do it. If you don’t understand what I mean, I have created a short 4-min video to demonstrate what it is about.

If you want to open an account with CMC Markets, you can click here and fill up the application form online.

26 replies
  1. Ah Gek
    Ah Gek says:

    Hi Alex,

    Thanks for the sharing !
    Just to confirm, for CFD trading, it is a margin trading and you will not own any share in CDP, is this understanding correct ?
    In my opinion it is not suitable for long term investment but rather for short term (days to weeks) type of investment/trading.

    Thanks,
    Jee Hwa

  2. Alex
    Alex says:

    @jeehwa: Yup, you don’t own the underlying shares. CFD is based on margin trading, but CMC just launched their new Next Generation platform, where you can customized your leverage. In other words, you can choose your own margin – 10%, 15%, 30% or 100% (you use fully your own capital) etc. It’s up to your preference. Generally, CFD is meant for short term trading. However, with CMC’s new customized leverage, you can even hold your positions for months because of lower financing charge if you use very little leverage.

  3. petern
    petern says:

    Hi Alex,

    Was thinking a long time about opening a CFD account and trading local shares but still have not started. Maybe fear , no knowledge of CFD since it is a leverage account. Do you know whether :

    a) CMC CFD prices are dyanmic , meaning the stock price buy/sell is the same as SGX prices ?

    b) Since CMC is the market maker will there be worse case scenario where you will not be able to buy back (if you short), or sell (if you long) when market is erratic (like recently). Guess biggest fear is getting caught without availble stocks from market maker.

    c) So far in your experience with CMC , you are happy with their reliability and service ??

    thank you

  4. Alex
    Alex says:

    Hi petern,

    a) There are basically two kind of CFDs platform – Direct Market Access (DMA) and Market Maker. DMA’s price will be same as the Exchange (SGX) while for Market Maker, the brokerage firm acts as the liquidity provider for all clients trading with them. The firm creates its own ‘artificial market’ for the product, and is able to quote its own prices (through spread) for the stocks. However, most of the time it is based on the market price.

    b) You can definitely sell/buy to cover your position.

    c) So far CMC is fine for me. Pretty good customer support.

  5. AT
    AT says:

    Hi Alex,

    Thanks for sharing. Would like to hear your opinion on the new generation CMC platform. I tried the demo account and it is very user friendly.

    I would like to open a CFD account for shorting but am afraid that CMC will trade against us if the market really crashes …

    What is your view. Thank you

  6. Alex
    Alex says:

    Hi AT,

    I have been using CMC for a period of time. So far so good and I am fine with a market maker. CMC is competitive as they have no minimum commission. The commission is built into the spead (bid/ask). Be it DMA or market maker, each has their own advantages and disadvantages.

    CFD Myth – If You Lose The Market Maker Makes Money?
    http://www.cfdtradingstrategy.com/CFD-Myth-If-You-Lose-Money-The-Market-Maker-Makes-Money.php

    How do Market Makers make their Money?
    http://beginnersinvest.about.com/od/beginnerscorner/l/blmarketmakers.htm

    Of course, they could trade against us and we may never know… On the contrary, I think it’s of their interest to hope that you win money. The more you win, the more you will trade with them and they will earn more money from commissions. If you lose a lot and you don’t trade anymore, how are they going to earn from you? They are essentially just a middle-man (broker), executing the trade for you only.

  7. Anthony
    Anthony says:

    Hi Alex,

    As we know, MF Global has declared bankrupty. Like CMC, MF Global also holds a Capital Market Service License. If we use a CFD broker like CMC or MF Global, would the money in our account be safe ? (I heard MAS has suspended all the customers’ accounts with MF Global).

  8. Alex
    Alex says:

    By right it should be safe. Clients’ money is in a segregated account. You might like to read more from TODAY newspaper here:

    http://www.todayonline.com/Business/EDC111102-0000199/MF-Global-clients-left-in-limbo

    MF Global said: “The provisional liquidation of the company does not detract from the proprietary rights of its customers, particularly in respect of monies already placed in segregated funds, in Singapore and elsewhere. In this regard, the provisional liquidators will endeavour to call in assets of the customers wherever situated.”

    Do take note that Kim Eng and CIMB’s CFD platform had been frozen because they are using MF Global’s platform.

  9. Gary
    Gary says:

    Hi Alex

    I opened a demo account just to try CMC out.
    Absolutely love their interface.
    But one of the short trades i put on, it did not exit at the target profit which i set at even though the market price went much lower than my target
    Did you experience such things while trading with CMC?

  10. Alex
    Alex says:

    Hi Gary,

    Yes, their platform is very easy to use. Even a complete newbie will know how to use it within minutes and their interface is aesthetically pleasing too.

    I don’t know what you are trading and what’s your entry price and profit-taking level, so I can’t really determine what really happened. But I didn’t encounter such incident as of now. However, if you are trading singapore stocks, their price is based on the 1st trade done after 9am, not based on preopen price. For eg, let’s say you go short at $1.00 and your exit target is at $0.80. The next day, the preopen price is $0.75, but the first transaction done after 9am is $0.85, your profit taking level will not be hit, because it’s based on $0.85 (unless during the course of the day, price hit $0.80 or below, then you will exit your position and take profit.)

  11. Alex
    Alex says:

    Hey Kok Hong, I have not tried to withdraw from cmc yet. My trading account is not very big, so whatever profits I have, I just accumulate in the account for the time-being.

  12. Powder
    Powder says:

    Hi Alex,

    When u open account in cmc markets do you required to sign and scanned the customers acknowlege form for cfd to email back to them?

    kindly let us know. Seem they requested slot documents.

  13. Alex
    Alex says:

    Yes, you need sign the forms, scanned the docs and email back to them. (if I remembered correctly)

  14. Trader
    Trader says:

    CMC is a scared lose company, they earning if their client lose more money.
    I made alot of money from guthrie by doing day trade in and out 6 times in a row.
    The 7th time i want to buy, CMC locked the counter, and I called to complaint they unfreeze it. And next day CMC reduced guthries max qty allow 180lots MAX to 10 lots.

  15. Alex
    Alex says:

    Personally, I don’t prefer built-in spread for SG counters. It makes the bid/ask price confusing. I prefer the “real” price.

    The commissions for sg stocks is now min sgd$10 per transaction. It is still cheaper than traditional brokers which is normally about $25.

    Other CFDs brokers also have minimum commissions. The only cheaper cfd broker I can think of is City Index for sg stocks.

    Well, every broker has their pros and cons… find one that you like best! 🙂

  16. kmtkmt
    kmtkmt says:

    I was happy experimenting with CMC.

    However, they have suddenly added a minimum commission, and disguise it as a “platform” upgrade. What it means is that while you have initiated a contract (CFD) with them, they have changed the term of the contract.

    I think they are hard-up for commission, and does not really care about their customer.

    It is surprisingly for an “established” company to suddenly change its price structure. Perhaps they are not doing well and need such a drastic change.

    Trade using a company you can trust.

  17. Victoria
    Victoria says:

    Hello

    I am closing my CMC account after several years of losses.

    I am an experienced trader who has profitable ‘cash market’ accounts with real brokers. I KNOW all the stuff about technical analysis, money management, position sizing, stop losses, etc. I make money when I trade via regular brokers.

    I opened a CMC account to hedge – eg when regular markets are closed; eg to go short easily without loaning stock. Especially in the case of Singapore; it is so troublesome to arrange to borrow stock to short.

    I have lost so much money on CMC over a few years that it isn’t funny.

    These guys are scammers in so many ways I don’t know where to begin. I am terribly sorry that so many people on this website are so positive about CMC – most of you guys don’t seem to have skin in the game or real experience trading with CMC for several years (while trading on other accounts in the cash market).

    Let me reiterate the key points:

    1) Their prices don’t reflect the real market. Even Dow Futures can be 1% off at times. Hello, 1% off Dow, more than 140 points. HUH?

    2) They love to run your stops. Do you guys know what a long tail doji or dragonfly is? When Dow trades in a tiny range, CMC can give you a long tail doji where they happily trigger your stops over 100 points away from where the futures cash market traded. Don’t waste time quarreling with them. As I’ve said, they are very polite – and condescending.

    3) They have slippage like nobody’s business, and it can happen even in an orderly market where the freaking stock DID NOT MOVE ALL DAY IN THE UNDERLYING MARKET!

    On CMC, the stock conveniently moved up in one of CMC’s characteristic price spikes and triggered my stop and I was stopped out at a price 5% above the day high during some mysteriously illiquid point of day.

    I’m not talking about regular market volatility here – I don’t get that kind of slippage on regular brokers who actually go into the cash market. You only get that kind of slippage during market extremes or on very illiquid stock.

    4) If there are mistakes (eg wrong feed; price not working, stock split not reflected, all kinds of weird stuff), you have to take forever to prove it to them.

    One time they made a mistake and admitted it. It took them 2 months to refund me money that they took from me up front. TWO MONTHS!

    5) They constantly change the rules of the game. On average I got 1 new email every month informing me of a whole bunch of changes. New fees, new rules, new limits… the playing field is already tilted 90 degrees in their favour and they still want to plant cactuses where I am running.

    6) Even though they are market makers, they make you pay for data feeds which cost them nothing to conjure out of thin air.

    7) Their NextGen platform is very unreliable and much worse than their previous MarketMaker platform. I was previously making -20% losses over 3 years. They forced NextGen on me and my account shrank 30% over 1 year. I didn’t suddenly become an inferior trader. NextGen actually has tons of extra hidden fees and spread problems popping up here and there to siphon off your money. It’s something very difficult to figure out and I’ve spent lots of time reviewing the trades.

    I have just terminated my business relationship with them since account has lost over 50%. I’m up on 4 other brokers and down on CMC. Same person trading the same markets.

    There is no way you can make money from CMC unless YOU ARE AN IRRESPONSIBLE TRADER.

    EG I’ve actually had a friend, a normally conservative trader on his other accounts, who opened a $4000 account, leveraged it to the max during a momo period, rode the momentum stock up, pyramided with no stop losses and closed out for a $143,000 profit after 8 months.

    CMC is absolutely great for this sort of thing because your losses are limited to $4k.

    If you want to make money consistently and not have some scammers play your stop losses, AVOID THEM LIKE THE PLAGUE!

  18. Kevin
    Kevin says:

    Thanks for your review Victoria.

    Can you suggest another broker?
    CMC has an attractive, broad range of pairs, but that’s useless if they do what you say.

    Would DMA be better?

  19. Alex
    Alex says:

    Hi Victoria,

    Thanks for your comments, but I do think that your views are a bit lop-sided. Please note that I am not promoting CMC markets in any way, it has its bad points as well.

    If you want to trade in a real exchange, you need to go to a traditional brokers such as DBS vickers, UOB Kay Hian, POEMS, Kim Eng etc. CMC Markets, City Index, IG markets etc are ALL CFD brokers, which means they are market-makers (prices may not reflect real market). You should know that before you sign up as a client.

    I have been using CMC since August 2011 and I have not seen such large discrepancies in prices which you have mentioned.

    Markets do run for stops but it may not be the broker who is doing that. I trade mostly in currencies and commodities and I do have another price feed from another broker to counter-check CMC’s price. If you say CMC is hunting your stops, even if you change to another broker, you will be stopped out as well. There is no difference. The big players (funds) are the ones who go for your stops and not the brokers. Of course, they are cases where brokers hunt stops. But clients are not stupid, if they do it often and blatantly the clients will leave. There are no shortage of brokers around.

    I have tried other CFD brokers (demo-accounts) such as IG, Cityindex… CMC is still the most user-friendly.

    However, CMC has its bad points as well. Their customer service needs to be improved which I agree with you. Sometimes their charts (not price) have errors. That’s why I have another broker’s price feed to counter check.

    I have a friend who are using IG and he says its customer svc is not good as well.

    So, I guess there is no perfect broker. All have their pros and cons.

    If you insist on brokers who are using DMA, you may check out Phillip CFD DMA or IG Markets DMA

  20. Raymond
    Raymond says:

    Hi,

    I’d like to share my experience of two occasions with Cmc.

    Some day in Dec, my profit taking of an index Short position was trigger due to sudden fall of Singapore 30 index. My position was closed with a profit. An hour later, to my surprise, they (CMC) reversed my profit by creating a new long trade without informing me. After i complained, they replied me that if due to market data error, they have right to void the transaction. But i don’t know if they would do so if it is to their advantage.

    I also observed that whenever I placed an market order, it became loss (beyond the spread). Fortunately if I bet the right direction, It recovered. Can anybody here explain what caused such? Does the market maker trades against us (I have been told they don’t) or they do some hedging hence price is adjusted opposite to customer’s trade)?

  21. Bobby
    Bobby says:

    Hi,

    CFD trading differs from stock trading. When you’re trading CFDs, you’re basically buying and selling a derivative, which is essentially a financial contract. In this case, the CFDs are traded OTC, unless they are exchanged traded like those on the ASX. Therefore, you ARE trading against your broker, because the CFD is a contract between your broker and yourself. Whenever you trade, you are going into an agreement with the broker that any future differences in stock price would be borne by the losing party.

    Note that this is true for both MM and DMA providers. The main difference is that MM makes the market for these contracts, which means you are trading on their terms at their price. Is there a conflict of interests? It depends on how the MM conduct their businesses.

    As for DMA providers, whenever you trade a CFD contract, they would effectively HEDGE themselves by purchasing the underlying asset, be it a stock, future etc. Therefore, if the price moves up, the broker is required to pay you the difference between your entry price and the price at which you exit your trade. At this point, the broker would sell the underlying asset as well, and in the process, make a profit. This profit due to the increase in stock price would then be transferred to you, and it would appear in your P/L. How does a DMA broker make money then? From the spread, which is typically higher than the spreads of the underlying asset traded by institutions, as well as DMA commissions & financing from your margin.

    As such, the drivers of the price and the liquidity of these instruments differs from those traded on the exchange. When liquidity thins out, expect large increase in spreads.

  22. Allen
    Allen says:

    Hi bro. Thank you for the post.

    I have tried CMC Markets but their customer support is terrible and I found them to be very rude.
    Because of that reason I switched to Oanda which is much better now.

    Thanks.

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