The Company. Security of Funds
Rainbow Capital Ltd.
RainbowForex is a forex and CFD broker that claims to be licensed in Vanuatu, but provides a contact phone number in Cyprus. When we checked the list of holders of dealer in securities license with the Vanuatu Financial Services Commission (VFSC), however, we did not find the name of the company there. The fact that RainbowForex is not licensed by the VFSC is not that important – whether a broker is unregulated or registered offshore is almost the same. Doing business with both of these categories is risky and we advise traders to avoid them. All the more so, if they make false claims, which is the case with RainbowForex.
You’d better select a forex broker licensed in Cyprus or UK, or for instance, where regulation is strict and there are compensation schemes, which will protect the money in your account, if your broker becomes insolvent.
An interesting fact about RainbowForex is that the company acquired Dragon Options – a binary options brand, previously operated by CySEC-regulated Dragon Options Ltd., which appears to have problems maintaining the capital adequacy requirements of the Cypriot financial watchdog, although its license is still active. As of April 1st, 2017, all trading accounts at Dragon Options were transferred to forex trading accounts with Rainbow Capital Ltd. On the other hand, Dragon options’ forex broker brand Tao Trade is acquired by CySEC-regulated company Depaho Ltd.
Minimum Initial Deposit
The initial investment required by RainbowForex $100, which is not a high amount, yet many regulated brokers require less or none at all.
Spreads and Commission
Spreads offered by RainbowForex on all accounts but Top Traders are really high, above 2 pips on EUR/USD. We wonder who would choose to invest in RainbowForex or any of the thousands unregulated brokers, when there are players like IG, that have set no minimum initial investment requirement, offer commission-free trading with an average spread of 0.6 pips on EUR/USD. What is more important, major forex and CFD provider IG has perfect reputation and is licensed in UK, Germany, Switzerland, Australia, Japan and other countries.
RainbowForex provides leverage up to 1:400, which is average for the forex market. We always warn traders of high leverage levels, which involve significant risk and are not suitable for all investors.
As we mentioned earlier, RainbowForex supports Sirix trading platform, available in all forms and shapes: desktop, web, mobile. The platform is developed in HTML5 and is compatible with both Windows and Mac OS operating systems.
Developed by Leverate, a fintech company and FX services provider licensed by CySEC, Sirix is an all-in-one Forex and social trading platform. It has a user-friendly interface and is equipped with intuitive charts and graphs. Its most outstanding feature, however, is the “Social Stream”, which includes live trades by other traders (as well as other information, such as how many people copied the particular trade), which you can directly copy.
We could not test RainbowForex’s Sirix platform, as we applied for a demo account, but never received an email with the log-in credentials required. Probably the broker does not offer demo accounts or its customer support service sucks. Either way, this is not a good sign – all decent brokerages provide demo accounts with the same trading conditions as live ones, so that anyone can try out their services for free.
Methods of Payment
RainbowForex offers its clients credit/debit card and bank wire transfer payments.
RainbowForex is an unregulated broker that provides online trading services in forex and various CFDs on the Sirix platforms. Of course, the main disadvantage of this broker is the lack of regulation. In addition, its spreads are very high, and besides, it makes false claims that it is licensed offshore, in Vanuatu.
RainbowForex Review Conclusion
For more information about currency trading brokers visit TopForexBrokers.com forex brokers comparison website, Tip ForexSQ.com foreign exchange trading experts please by share this article about RainbowForex Review.