FXCM - Can they be trusted ??

[TheDarkTrader]

I was watching the GBP/USD earlier today on the FXCM platform and at precisely 04:30, when the UK PPI figures were released the GBP/USD price panel and chart froze. All other prices were still updating on the panels. The prices and charts started updating after again 4 minutes where the price was now up by 70 pips. The tick data from 04:30 to 04:34 is now missing on the chart and I am not able to retrieve it.

I have spoken to FXCM's technical support and they told me that there is no data for this timeframe because there were no liquidity as the banks were not willing to quote since the data was higher than expected. The technical support claimed that there were no trades between this time.

I am most concerned about this situation and am wondering if there is a possibility that FXCM 'blocked' the data stream to reduce transparency of the underlying market in order to position the price move to their advantage.

I would greatly appreciate if someone could please enlighten me on this scenario and confirm that this in indeed a common occurrence with not just FXCM but all other brokers such at Interactive Brokers, Bloomberg etc. It would help me tremendously if someone would be kind enough to confirm that there were indeed no trades on the GBP/USD between 04:30 - 04:34 EDT.

Thanks a Million

 

[Trader333]

.....The technical support claimed that there were no trades between this time.

There is only one thing wrong with this statement and that is..............


It is a total load of Bo**oks as can be seen from the attached chart.


Paul

 

[TheDarkTrader]

Paul,

Thanks for your prompt reply. It sort of confirms my suspicion I would be most grateful if you could you please tell me what broker platform you got the snapshot from and how reliable the broker is.

Thanks again

 

[r.w.]

What happened was that the rate jumped about 40 pips in not too many ticks and seconds, and 4.34 coincides with the time when you could have entered a short based on bounce off a pivot level - assuming ecn/interbank spread and low latency execution.

The way FXCM handled this seems a bit sinister. The platform freeze (a stinker in itself) could be due to their dealing-desk replacement software, but the un-freeze at 4.34 seems like the work of an experienced trader following the flow.

 

[TheDarkTrader]

I had the same bar chart presentation as the one above, on Avatrader, an alternate broker I was also watching at the time, whereby immediately after the news release there were three blue (up) bars followed by the down bars from 04:30 EDT to 04:34 EDT.

On FXCM, there were no bars from 04:30 to 04:33 and the next bar at 04:34 appears as ONE up bar with a high at 1.9789 followed by immediately by a red bar. This is what raised my suspicion.



Thanks again

 

[Trader333]

The screenshot was from Interactivebrokers feed.


Paul

 

[Marwan2010]

Personally I NEVER EVER trade B4 news, and after news unless it is hedges or protected ( safer s***) he he

let the market settle down and then pounce if the TA is saying you to do so
If I go wrong then i NEVER blame anyone except the guy i see in the mirror!

 

[TheDarkTrader]

I agree, trading the news is highly risky. I myself do not trade the high impact news frequently. However in this case, I was intially more concerned that it was a technical issue that caused the 4 minute loss of data e.g servers going down. The technical support confirmed that their servers were OK. They went on explain a glitch with a ridiculous reason.

It now appears that although there was still liquidity in the underlying market, FXCM were not providing that liquidity to their clients. I have now been also paying careful attention to the charts at the tick level and have noted several momentary freezes during the day where tick data then goes missing even when there are trades on the interbank. I am not sure I can trade confidently knowing that my broker may 'pull the plug' when it suits them.

In essence, clients of FXCM are not playing the Forex Interbank Market. They are playing the FXCM Forex market.

Best Regards.

 

[wrmeeker]

This might be FXCM's response (taken from their website). I am NOT defending them!!! Your posts are quite disturbing to me as a FXCM account holder.

Chart Pricing vs. Prices Displayed on the Platform

It is important to make a distinction between indicative prices (displayed on charts) and dealable prices (displayed on the FX Trading Station). Indicative quotes are those that offer an indication of the prices in the market, and the rate at which they are changing. Market watchers, such as S&P and eSignal, compile indicative quotes as a proxy for the market's actual movement. These prices are derived from a host of contributors such as banks and clearing firms, which may or may not reflect where FXCM's liquidity providers are making prices. Indicative prices are usually very close to dealing prices. Indicative quotes only give an indication of where the market is. Equity and futures traders dealing through a broker will see indicative quotes. Executable quotes ensure finer execution and thus a reduced transaction cost. Equity and futures traders are used to prices being the same at any given time, regardless of which firm they are trading through or which charting provider they are using—and they often assume the same holds true for spot forex. Because the spot forex market is decentralized—meaning it lacks a single central exchange where all transactions are conducted—each forex dealer (market maker) may quote slightly different prices. Therefore, any prices displayed by a third party charting provider, which does not employ the market maker's price feed, will reflect "indicative" prices and not necessarily actual "dealing" prices where trades can be executed.

So it does appear that Dark Trader is correct -- "In essence, clients of FXCM are not playing the Forex Interbank Market. They are playing the FXCM Forex market."

 

[Mr.J-Arthur]

That's a freeking bucket shop!
Where shall we trade...
I almost got a fxcm acct. I might think again.

 

[jverho]

That's a freeking bucket shop!
Where shall we trade...
I almost got a fxcm acct. I might think again.

Hi,

he's some CFTC links on FXCM... do your own Dd and make up your mind yourself!:clap:

http://www.trade2win.com/boards/forex-discussion/46002-fxcm.html

CFTC Press Release 4892-04

Federal Court Issues Final Judgment in Trial of Fraud Action Brought by the CFTC

U.S. Commodity Futures Trading Commission Files Action Against Futures Commission Merchant Forefront Investments Corporation d/b/a CFG Trader For Failure to Maintain the Minimum Amount of Net Capital Required by Federal Law