Best Thread FXCM Discussion

[Jason Rogers]

Thank you for taking the time to respond.

As a pat on the back for you... your response was more timely and useful than the standard FXCM "customer service" :clap:

:cheesy: Thanks. Can't promise I will always respond immediately, but I'm usually on the forums at least once per day. Out of curiosity, are the response times for customer support slow through email, phone or chat? Feedback would be helpful so I could let the customer service managers know where traders are finding roadblocks.

Interestingly, and not to start a debate or argument, but...

It seems as though the biggest issue brokers have it proving their honesty and not manipulating price to profit the broker ( spikes, slippages, widening spreads etc).

Can you say what FXCM does to combat this particular issue. How can FXCM prove that it does not manipulate prices?

Good questions. The first thing to make sure of is that any broker you are trading with is regulated. This ensures that at a minimum there are standards the broker has to live up to, and there is some form of oversight and outlet for dispute resolution.

FXCM combats the issues you mentioned by using No Dealing Desk forex execution. With NDD (also referred to as STP / Straight Through Processing) the best bid/ask price from 10+ liquidity providers is automatically displayed onto the platform with FXCM's mark-up, and every order is offset one-for-one with the liquidity providers. This is contrasted with a market maker or dealing desk broker which sets the prices and takes the other side of your position. A conflict of interest arises if the broker doesn't then hedge their client positions since the broker would profit when the trader loses, and the broker loses when the trader profits. NDD removes the conflict by tying FXCM's compensation to pip mark ups (commissions) on trading volumes rather than trader losses.

-Jason

 

[pboyles]

:cheesy: Thanks. Can't promise I will always respond immediately, but I'm usually on the forums at least once per day. Out of curiosity, are the response times for customer support slow through email, phone or chat? Feedback would be helpful so I could let the customer service managers know where traders are finding roadblocks.



Good questions. The first thing to make sure of is that any broker you are trading with is regulated. This ensures that at a minimum there are standards the broker has to live up to, and there is some form of oversight and outlet for dispute resolution.

FXCM combats the issues you mentioned by using No Dealing Desk forex execution. With NDD (also referred to as STP / Straight Through Processing) the best bid/ask price from 10+ liquidity providers is automatically displayed onto the platform with FXCM's mark-up, and every order is offset one-for-one with the liquidity providers. This is contrasted with a market maker or dealing desk broker which sets the prices and takes the other side of your position. A conflict of interest arises if the broker doesn't then hedge their client positions since the broker would profit when the trader loses, and the broker loses when the trader profits. NDD removes the conflict by tying FXCM's compensation to pip mark ups (commissions) on trading volumes rather than trader losses.

-Jason

Though to be fair it wasn't always that way, was it?

 

[Club]

:cheesy: Thanks. Can't promise I will always respond immediately, but I'm usually on the forums at least once per day. Out of curiosity, are the response times for customer support slow through email, phone or chat? Feedback would be helpful so I could let the customer service managers know where traders are finding roadblocks.



Good questions. The first thing to make sure of is that any broker you are trading with is regulated. This ensures that at a minimum there are standards the broker has to live up to, and there is some form of oversight and outlet for dispute resolution.

FXCM combats the issues you mentioned by using No Dealing Desk forex execution. With NDD (also referred to as STP / Straight Through Processing) the best bid/ask price from 10+ liquidity providers is automatically displayed onto the platform with FXCM's mark-up, and every order is offset one-for-one with the liquidity providers. This is contrasted with a market maker or dealing desk broker which sets the prices and takes the other side of your position. A conflict of interest arises if the broker doesn't then hedge their client positions since the broker would profit when the trader loses, and the broker loses when the trader profits. NDD removes the conflict by tying FXCM's compensation to pip mark ups (commissions) on trading volumes rather than trader losses.

-Jason

I understand all of that, but...an example:

Lets just pretend all of your 10+ liquidity providers are saying that GBP/USD is 1.5, you throw on some spread, say 1.6.

All us little minions see is 1.6 from you, never do we see what the liquidity providers are telling you, how do we not know that the liquidity providers are telling you 1.3 but you still tell us 1.6?

I exaggerate the numbers to prove the point. Wouldn't a perfect way for us little people to know that you are 'marking up' and not 'making up' be to show us the liquidity providers prices? Admittedly they would forever be changing and at a million billion times per second, but it would put the uber geeks doubts to rest!

Although fighting against myself... you could just change what the liquidity providers are saying the price is in order to still give us the same price that you would have done anyway!

I guess the point is, you still aren't able to prove that the price you are giving us is the 'best' price from your liquidity providers + spread. Its a bit like the old trader training conundrum... the biggest problem trader training companies have is proving that they can train people. They could do this by posting real verified results of their trainees, they don't "need" too, but they could. Brokers could post real "verified" liquidity provider quotes. Yes you have all the regulations, but we all know that doesn't really mean anything.

 

[Jason Rogers]

I understand all of that, but...an example:

Lets just pretend all of your 10+ liquidity providers are saying that GBP/USD is 1.5, you throw on some spread, say 1.6.

All us little minions see is 1.6 from you, never do we see what the liquidity providers are telling you, how do we not know that the liquidity providers are telling you 1.3 but you still tell us 1.6?

I exaggerate the numbers to prove the point. Wouldn't a perfect way for us little people to know that you are 'marking up' and not 'making up' be to show us the liquidity providers prices? Admittedly they would forever be changing and at a million billion times per second, but it would put the uber geeks doubts to rest!

Although fighting against myself... you could just change what the liquidity providers are saying the price is in order to still give us the same price that you would have done anyway!

I guess the point is, you still aren't able to prove that the price you are giving us is the 'best' price from your liquidity providers + spread. Its a bit like the old trader training conundrum... the biggest problem trader training companies have is proving that they can train people. They could do this by posting real verified results of their trainees, they don't "need" too, but they could. Brokers could post real "verified" liquidity provider quotes. Yes you have all the regulations, but we all know that doesn't really mean anything.

Hi Club,

The spread you see on the platform will be wider than the best bid/ask spread from the liquidity providers since it includes the pip mark-up (or commission). Of course, FXCM doesn't provide it's services for free so the prices received from the liquidity providers are marked up, but you can view our spreads and tick charts if you would like to view historical pricing. If you prefer to see the pricing without the standard account pip mark-up, you should check out the Active Trader platform where our compensation is in the form of a commission FXCM Active Trader . Active trader clients pay reduced spreads plus a separate commission which is designed to lower the overall transaction cost by about 1 pip. As your volume increases, the commissions and overall costs can be reduced. We offer this program because our trading revenues are dependent on trading volumes rather than trader losses. The minimum requirements to qualify for active trader is a minimum account balance of $50,000 or a minimum 10 million per month in notional trading volume.

-Jason

 

[Club]

If the spread is a defined mark up that obviously means that you can change them easily, therefore, are spreads negotiable?

 

[Jason Rogers]

If the spread is a defined mark up that obviously means that you can change them easily, therefore, are spreads negotiable?

The spreads are not. So standard accounts receive the same standard account spreads, and active trader accounts receive the same active trader account spreads. What is negotiable is the commission paid on the active trader account which is based on the level of volume being traded. As trading volume goes up, the commission you are paying could be lowered resulting in an overall cost reduction.

 

[saj1011]

Hey Jason,

can you explain why FXCM uses the manipulated fantasy price feed for the back tester from metaquotes ?

is it not immoral and totally wrong to fool people into believing that their Expert Advsior is a highly profitbale system on the demo account, but when goes live the customer account gets reduced to zero very quickly as the system has been tested on false data ? which you guys provide ?

Can FXCM not clean their act up and use real prices, like from Bloomberg or Reuters and not fantasy ones provided the Metaquotes feed ?

Cheers,

S

 

[scose-no-doubt]

 

[pboyles]

Don't mention the fine, I did once but I think I got away with it.

 

[Jason Rogers]

Hey Jason,

can you explain why FXCM uses the manipulated fantasy price feed for the back tester from metaquotes ?

is it not immoral and totally wrong to fool people into believing that their Expert Advsior is a highly profitbale system on the demo account, but when goes live the customer account gets reduced to zero very quickly as the system has been tested on false data ? which you guys provide ?

Can FXCM not clean their act up and use real prices, like from Bloomberg or Reuters and not fantasy ones provided the Metaquotes feed ?

Cheers,

S

Hi Saj,

Any trader that thinks their strategy will be profitable in the future because it was profitable in the past is in for a rude awakening . Past results are no guarantee of future performance.

MT4 will use FXCM's price feed for backtesting unless you import the metaquotes data from the history center. This is how it works on every MT4 platform. If you would like to see the metaquotes data improved, then that is an issue you will need to take up with metaquotes since they include it in MT4 as default since it is their platform. However, MT4 gives you the option to import data to get around this if you so choose.

Jason

 

[scose-no-doubt]

anti-climax

 

[saj1011]

Hi Saj,

Past results are no guarantee of future performance.

Jason

Yes, but providing clients with accurate historical prices will give them more realistic results from the expert advisor back tests, which is a product FXCM offers to make for people. It should be FXCM's responsibilty to ensure the historical data is accurate, the metaquotes disclaimer is a scam.

 

[Jason Rogers]

Yes, but providing clients with accurate historical prices will give them more realistic results from the expert advisor back tests, which is a product FXCM offers to make for people. It should be FXCM's responsibilty to ensure the historical data is accurate, the metaquotes disclaimer is a scam.

Hi Saj,

The historical data provided in our charts through MT4 and Trading Station are accurate, and reflect the pricing that was streamed on the platform from 10+ liquidity providers with FXCM's NDD forex execution. If you're importing data from the MT4 history center, then I would certainly use caution since that data is coming from Metaquotes as outlined in the disclaimer in the history center.

Jason

 

[Jason Rogers]

Yes, but providing clients with accurate historical prices....

Hi saj,

I also just remembered that we have historical data available for download here Free Strategy Trader Historical Data. It's the same FXCM data available through through the Trading Station and MT4 platforms, but in larger raw amounts for you to do backtesting.

Jason

 

[mandilon]

Hi FXCM!

Did you lose 'many' customers due to the class action lawsuit brought-on by your ruthless treatment of your unsuspecting clients?

How did FXDD come out?

 

[Jason Rogers]

Hi FXCM!

Did you lose 'many' customers due to the class action lawsuit brought-on by your ruthless treatment of your unsuspecting clients?

How did FXDD come out?

Hi Mandilon,

The case you are referring to was dismissed November 29, 2011.

In regards to your question about our customer base, FXCM Inc recently announced fourth quarter and full year results for 2011. Among the fourth quarter highlights, active accounts were up 20% from the same period in 2010.

FXCM uses No Dealing Desk forex execution and therefore does not profit from client losses. Instead, FXCM is compensated by a pip mark-up added to the best bid/ask spread streamed from 10+ liquidity providers on our platform, which essentially acts as a commission. This means our revenue is based on trading volume. It is in our best interest that our clients be successful, so they continue trading with us.

For this reason we go to great lengths to provide education to help our clients become more confident traders. Our research team at DailyFX recently put together a report based off of analysis of over 12 million real trades to identify the characteristics of successful traders. You can click here to access the report.

Jason

 

[pboyles]

Hi Mandilon,

The case you are referring to was dismissed November 29, 2011.

In regards to your question about our customer base, FXCM Inc recently announced fourth quarter and full year results for 2011. Among the fourth quarter highlights, active accounts were up 20% from the same period in 2010.

FXCM uses No Dealing Desk forex execution and therefore does not profit from client losses. Instead, FXCM is compensated by a pip mark-up added to the best bid/ask spread streamed from 10+ liquidity providers on our platform, which essentially acts as a commission. This means our revenue is based on trading volume. It is in our best interest that our clients be successful, so they continue trading with us.

For this reason we go to great lengths to provide education to help our clients become more confident traders. Our research team at DailyFX recently put together a report based off of analysis of over 12 million real trades to identify the characteristics of successful traders. You can click here to access the report.

Jason

Are you ever going to answer my question about non US customers being compensated for your unfair slippage practices? Obviously your $20 million fine only compensated US customers, it was still a hefty fine but many other customers appear not to have been compensated for your actions.

 

[Jason Rogers]

CFD Holiday Hours & Rollover

Please take note of changes to the following CFD trading hours for Good Friday and Easter. There is no change to forex trading hours, but forex trades will be affected by holiday rollover this week.

For example, on Wednesday, April 4th there will be up to 5 days worth of rollover interest that you could earn or pay on some currency pairs. For details look at the rollover calendar.

 

[iamnev]

Hey Jason,
Thanks for a great charting application, thank you for the heads up about the holiday rollover, thank you for keeping us upto date with FXCM policy and upgrades, thank you for answering all the questions on this thread even though some people think they are more knowledgeable than you about the company you work for.
Keep up the great work and happy Easter.

 

[Jason Rogers]

Hey Jason,
Thanks for a great charting application, thank you for the heads up about the holiday rollover, thank you for keeping us upto date with FXCM policy and upgrades, thank you for answering all the questions on this thread even though some people think they are more knowledgeable than you about the company you work for.
Keep up the great work and happy Easter.

Thanks Nev, I aim to please. If you have any questions about FXCM, you know where to go.