Arum Capital Review
Arum Capital Review
Arum Capital is an ECN forex broker. The company offers three account types, connected with three different trading platforms. RAMMFX supports the PAAM-like scheme which this broker provides (more on it later). Arum pro is their proprietary platform, while MetaTrader4 is an industry staple, when it comes to currency trading. The broker appears to be under development at the time of writing, so we will update this review in the future.
The Company. Security of Funds
Company Country Regulation
ArumPro Capital Ltd. Cyprus CySEC
Arum Capital is a brand, owned and operated by ArumPro Capital Ltd. The company is based in Cyprus and is regulated by the local financial watchdog – the Cyprus Securities and Exchange Commission (CySEC). That being said, your funds will be safe with this broker. This may not be the case if you decide to trade with an off-shore company, as we have explained here.
Although you may not think Cyprus is a major financial center, the nation has attracted lots of forex brokers in recent years. This is due to several factors, like the EU-membership, which allows companies registered there to operate in the entire Single market via the MiFID directive. However, this privilege comes with the appropriate rules. One of them is the mandatory application of segregated accounts – traders’ funds must be kept in accounts which the broker can not freely access. In effect, the money can not be spent on corporate expenses (as well as stolen). Another important CySEC ruling is the participation in the Investor Compensation Fund (ICF). This is a system, which forces brokers to pay a portion of their profits to a collective pool, which then serves to guarantee client claims, in case one of the brokers goes bankrupt. The coverage of this scheme is limited to €20,000 per account.
As a broker Arum has some interesting offers. One of them is the RAMM system. In essence, the similarity between this PAMM and signal-provider services is great. The key difference is the risk management methodology, which allows for much more rules to be added. On the other hand, the fees, which investors pay to the provider of the service are calculated on a weekly basis. This is somewhat more beneficial to trader, as he can rack-up profits faster than he can in other systems (monthly, quarterly and so on). That being said, this will not be a major issue if you follow a profitable strategy, for a long period of time, due to the high watermark rule.
Minimum Initial Deposit
The minimum deposit, for the investment platform (as described above) is $100. On the other hand a trading account must be funded with at least $500, which is a bit high for today’s standards. Brokers keep setting the entry level lower and lower. Some, like the FCA-regulated industry pioneer IG, have removed the minimum entirely.
Keep in mind, this is not a factor one should consider with great priority when comparing brokers. This is only important if you can’t afford a bigger investment or are simply learning to trade.
Average spreads & Commissions
Spreads at Arum Capital are hard to specify at this point in time, as the broker’s platforms are not yet available. The ECN feed, as demonstrated on the website shows lots of variation – from zero to one pip, in a couple of minutes. This is not unusual, when it comes to variable spreads, but we find the fluctuations to be rather unusual. On the other hand the commission structure is clear: The offer available for the trading accounts (unlike the investment one) is $5 per lot, for both sides. This equates to a 0.5 pips effective widening of the spread.
The investment account has a slightly bigger spread – $10 per lot. the difference will probably be the broker’s “commission” for providing this service. Although we will have to update this review, when there is more clarity on the conditions, you can view our real-time comparison of the spreads offered by some of the world’s leading FX brokers now.
Arum Capital offers a maximum leverage of 1:100. You may believe this is a low level, since some brokers offer 1:500 and even more.However 1:100 can basically allow you to follow a sound trading plan without any difficulties.
The key thing to realize, when thinking about leverage, is that you do not have to utilize all of your available buying power at the same time. For instance, say you have deposited $10,000 with a broker, offering 1:100 in leverage. This does not imply you should open a million dollar position ($10,000 x 100), as a mere 1% market move against you, would lead to the loss of your entire account.
Arum Capital offers a variety of trading platforms based on different client needs. The world leading currency trading platform MetaTrader4(MT4) is one of them, with separate proprietary software available for the RAMM investment scheme and another in-house platform called Arum Pro.
Currently we can only discuss MetaTrader as the other two platforms are not yet released. MT4 is loved by traders around the world and its popularity appears to be the sole reason why Arum have chosen to offer it, despite having other options as well. Charting on this platform is top-notch and technical traders adore, due to the many custom indicators which are available. Furthermore, lots of automated systems (called Expert Advisors) are also being sold at the MQL marketplace. This is an independent shop, where you can test, buy or sell indicators and EAs, without your broker being involved in any way. Furthermore, you can easily transfer the software add-ons you own to a different MT4 broker if you so desire. By the way the same principle applies for the platform’s mobile apps (available for Android and iOS) – you can log in with different accounts, which are held with different brokers through one app.
While the other two platforms are yet to be made fully available, we will review them, once they are.
Methods of Payment
Arum Capital supports several methods of payment. More traditional options, such as Bank Transfer and Credit/Debit Card are accompanied by two e-wallets: Skrill and Neteller.
Arum Capital is a relatively new CySEC-regulated ECN broker. Some of their offers (the RAMM scheme in particular) appear to be quite interesting. That being said, the company has not yet fully launched its services. We would update this review, once this happens. At the moment we are rather optimistic about what we have seen, although we must see what the ECN price feed actually provides, in order to give a fair assessment.
Arum Capital Review Conclusion
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