Scandinavian Capital Markets review
Established in 2011 as a Wealth Management Company, Scandinavian Capital Markets (SCM) redirected its focus to the currency markets. In 2012 the company obtained a license from the Swedish Financial Supervisory Authority, Finansinspektionen. SCM is an STP (Straight-Through Processing) broker, which means that orders placed by the traders are directly sent to liquidity providers. The broker doesn’t take the other side of its clients. When you make money, you can trade with larger sizes and earn more. The broker on the other hand also earns more from commissions, therefore SCM is interested in helping its clients succeed in the market. Let’s learn more about this broker in our review.
Scandinavian Capital Markets trading platforms
Scandinavian Capital Markets offers a diverse selection of trading platforms for its customers. The available options include MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. It should be mentioned that trading platforms are available for desktop, mobile and web trading. Let’s delve into the main features of each platform for a better understanding.
MetaTrader 4 is a super popular trading platform for trading Forex and CFDs (Contracts for Difference), known for its reliability, and user friendly design. Key features of MT4 include:
- Simple and easy to use design: MT4 was released in 2005, and it has a simple design. The platform has not gone through major upgrades, which means that the software can easily be run on even old computers or on low budget software. The platform’s simple and intuitive design makes it the favorite choice of Forex traders.
- Automated trading: MT4 supports trade automation using Expert Advisors (EAs). Due to the fact that the software is one of the oldest and widely used, MT4 has the library of the largest custom-built algorithms.
- Built-in charts: MT4 provides tools for professional technical analysis, offering various indicators and timeframes.
MetaTrader 5 is often referred to as a multi-asset platform. The reason is that the platform supports not only Forex, commodities, crypto CFDs, and indices trading, but also stocks, futures and bonds. That’s the main difference between the MT4 and MT5. However, there are many improved features in MT5 that needs to be mentioned:
- Traders benefit from more time frames in MT5, offering greater flexibility for chart analysis.
- MT5 provides more order types, giving traders increased flexibility in executing trades. MT5 supports following order types: Market order, Limit order, Stop order, Buy stop order, Sell stop order, Buy limit order, Sell limit order, Buy Stop Limit order, and Sell Stop Limit order. These order types help traders execute trades in different market conditions optimally. MT4 on the contrary, offers less order placement capabilities.
- The platform features a built-in economic calendar, offering detailed information on economic events and their potential impact on prices.
- MT5 includes market depth functionality, allowing traders to view bids and ask prices for in-depth analysis.
- MT5 boasts more built-in indicators, tools for market analysis, and additional charting options. You can find more timeframes on MT5 than on MT4.
- Unlike MT4, MT5 allows both hedging and netting, providing traders flexibility in implementing various trading strategies.
cTrader stands out as a well-designed trading platform built for Forex and CFD trading, originating from Spotware in 2010, its key features include:
- Sleek and intuitive interface: cTrader ensures an easy learning curve, particularly beneficial for beginners entering the trading arena.
- Advanced tools for charting and market analysis: The platform provides sophisticated charting tools equipped with a variety of indicators and diverse timeframes, facilitating technical analysis for traders. On cTrader, traders have access to more timeframes than on MetaTrader platforms.
- Level 2 Pricing: cTrader offers access to level 2 pricing, enriching traders with comprehensive information for in-depth market analysis.
- Algorithmic Trading: With the inclusion of cAlgo features, cTrader supports algorithmic trading, empowering traders to implement automated strategies effectively. On the downside, it should be mentioned that there are not as many custom-made algorithms as for MetaTrader platforms.
Scandinavian Capital Markets trading assets
SCM mainly offers Forex pairs and crypto CFDs (Contracts for Difference). It’s important to note that investing in crypto tokens and crypto CFDs is not the same thing. Crypto tokens are mainly purchased by long term investors, while CFDs are generally traded by market speculators.
There are over 30 crypto CFDs available for trading with SCM, such as:
- Bitcoin vs US Dollar – BTC/USD
- Ethereum vs USD Dollar – ETH/USD
- Litecoin vs US Dollar – LTC/USD, and others.
When trading these instruments, traders can use leverage to increase their purchasing power and can short sell, if they believe that the price of a given asset will be reduced.
There are over 70 currency pairs available for trading. Traders can access major, minor, and exotic pairs, such as:
- Euro vs US dollar – EUR/USD – spreads from 0 pips – Avg. spreads 3 pips
- British pound vs Australian dollar – GBP/AUD – spreads from 2 pips – Avg. spreads 21 pips
- British pound vs Japanese yen – GBP/JPY – spreads from 2 pips – Avg. spreads 17 pips
- Mexican peso vs Japanese yen – MXN/JPY – spreads from 2 pips – Avg. spreads 3 pips
- New Zealand dollar vs Canadian dollar – NZD/CAD – spreads from 4 pips – Avg. spreads 15 pips.
Maximum available leverage is 200:1 for trading currency pairs. It should be mentioned that most global brokers are offering much higher leverage. However, high leverage is restricted in Europe due to its risky nature. High leverage is risky in trading because it amplifies both potential profits and potential losses.
On the downside, there are no stocks, bonds, and futures available for trading at the moment. Thus, in case you are planning to trade these instruments, you will be disappointed. However, it should be noticed that the broker recently added the MetaTrader 5 platform, which is known to support multi-asset trading and access to shares and other instruments can be also added.
Scandinavian Capital Markets trading fees review
Trading fees at SCM fall within the industry average compared to its competitors. The broker provides a raw spread model, starting from 0 pips on EUR/USD, though they can increase during periods of low liquidity. This model is best suited for active traders that open and close lots of trades within short periods of time and look for the lowest spreads. On average, as mentioned in the assets review section, the EUR/USD spreads hover around 3 pips. Notably, SCM doesn’t profit from spreads, instead, they rely on commissions. The commission stands at 3.5 account currency unit per traded lot per side.
In addition to trading fees, there are inactivity fees of 20 USD/EUR/GBP per month (depending on your account type) after 6 months of inactivity. Importantly, SCM does not charge deposit fees. However, a discretionary $25 fee may be applied for withdrawals via bank transfer.
Getting educated at HotForex – How accessible is it?
Education plays a crucial role in the Forex market. Many newcomers face losses that often lead to account failure due to a lack of quality education and difficulty managing their emotions. To address this, the broker offers valuable educational resources that can be found on the main page under the “Education” tab. These resources include informative materials, technical analysis, and video lessons. Traders can further benefit from Trading WTF (Where to focus) videos on SCM’s youtube channel. However, it’s worth noting that seminars, and personal training courses are currently unavailable.
Are there any bonuses available for SCM traders?
No, SCM doesn’t offer any deposit bonuses or competitions for traders. The SCM is based in Sweden and is regulated and authorized by the Swedish Financial Supervisory Authority, Finansinspektionen, under No. 80438. In Europe, according to most European regulators and MiFID II Regulations, bonuses and promotions by forex brokers are not allowed. These restrictions are primarily created to protect traders and ensure a higher level of transparency in the financial markets. Let’s take a look at the arguments behind why bonuses are bad:
- Forex bonuses often come with certain terms and conditions that are aimed at forcing traders to overtrade. Overtrading to get a bonus becomes a habit and turns traders into gamblers. Bonuses can be especially damaging for new traders. As beginners start to learn new strategies and develop new habits, overtrading addiction can certainly lead to loss of money.
- Unclear bonus terms and conditions can create an environment where traders may not clearly understand the risks involved. Restricting bonuses enhances transparency and aligns with investor protection principles.
- Trading competitions similarly force traders to overtrade and focus on results, rather than the process. It’s no secret that when traders chase money, they lose it. When traders chase excellence (meaning they trade the right way), they make money.
Overall, Scandinavian Capital Markets offers a wide selection of currency pairs and crypto CFDs, and a variety of trading platforms. The broker is well regulated in Sweden and can be trusted. However, in case you plan to trade stocks, bonds, etc. instruments, you should look elsewhere. This broker is best suited for active currency traders with raw spreads starting from 0 pips.