No Sir, I won't have that. Jason is very well mannered when responding to my questions about fxcm being caught defrauding their clients. He is a little evasive when I ask about them refunding non US clients, but rude, no.
I would not say that he's been rude, but he certain has been a lot more than merely a little evasive and diverting of subjects that get under the skin of FXCM.
Yours (apparently) is a former complaint of defrauding traders who are not registered with FXCM in the United States. Mine is a long standing complaint about FXCM engaging in Price Manipulation. The evidence for this is not only witnessed on the charts themselves which everyone can see with the naked eye, but it is also baked into their business model which cannot be seen by the naked eye. You won't know about it unless and until you study how retail forex works.
Case in point:
The Rigging of The System
Ask Jason Rogers of FXCM, to explain to you how their Price Engine works. You will find him in his most defensive posture with such a question, because he knows where such questions can lead, if he's not very careful to divert the subject very early on in the conversation. Or, he'll cloud the answer given in a shroud of smoke and mirrors about how FXCM liquidity providers are the source of the price levels you ultimate see on your FXCM trading platform(s).
The fact of the matter is that FXCM is not showing you actual Interbank prices on either the TS-II, MT4 and now NT platforms. Most of these FCM/RFED types use many of the exact same liquidity providers and they are not all chartered banks. These liquidity providers are essentially engineering a type of back-end "arbitrage moment" into a lot of the prices they deliver to FXCM. These "financial institutions" that make up the typical FCM/RFED liquidity pool are also engaging
real Interbank transactions simultaneously.
Their algorithms are "searching" for these "arbitraging moments" between the Retail and Institutional sides of the market. Essentially, they've configured their own private back-end ATM machine between both sides of the equation. Therefore, the prices you see on your retail trading platform will very rarely match what's actually taking place simultaneously in the real Interbank market.
The Solution to True Price Transparency
FXCM loves to claim that it offers true Transparent DMA and a "no dealing desk" option. Well, this is far from the truth of the matter as you will soon see.
No dealing desk is supposed to equal true DMA. In other words, if you can enter an order through your FXCM platform and have that order filled against an actual real-time Bid/Ask combination existing within their liquidity pool directly, without having your trade "run through" their dealing desk, then they call that Direct Market Access, or DMA. But, direct market access to WHAT is what they do not tell you.
You are not getting direct market access to Interbank rates. You are getting access to a shooting gallery of baked-in arbitrage moments that you can't even see and that only the participants within the pool know about [the rigging]. The Bid/Ask FXCM executes on your behalf based on your decision to enter/exit the market will always (100% of the time) be an inferior position relative to their liquidity providers and the rest of the real Interbank market.
In order to offer you (the retail trader) true DMA, FXCM would by definition have to stop manipulating liquidity pool rates by plugging in their business model required spread increase. Rates that you see on their platform are algorithmically generated by their so-called "Pricing Engine" to include their "Mark-Up" on liquidity pool rates. This is the third-layer of disadvantage you get through a broker like FXCM. So, even before you click on your mouse to open or close your position, you are doing it with three (3) strikes against you from the word GO.
This cannot be resolved while FXCM generates it revenues through the algorithmic widening of the spread. It would by definition have to shift its business model to a true Commissions based model and it would have to stream both Real-Time Prices from the pool
along with true Depth of Market (DOM) to your trading platform.
The net effect would be that you as a trader are now able to pick and chose your transaction levels far more precisely and with far more forward intelligence about your entry/exit logic. But, that's not the best part. People often times misunderstand why having true price transparency such as this is important and they focus on the DOM aspect all by itself. But, there is more benefit to the trader than meets the eye.
The best part of such a model is the fact that the trader can now build their own "Pricing Engine" and capture either true Arbitrage Moments of their own, or capture Zero Spread opportunities at price levels that are appropriate for their particular trading methodology. This is one of the reason why FXCM won't shift to this truly Transparent Price Delivery Model.
If FXCM would make streaming DOM available via API and/or via Excel, along with history data and real-time OHLC, then you have all you need to track and capture the Best Pricing Available at all levels, including the capturing of Zero Spread conditions, or even Negative Spread conditions.
When I say that FXCM is a Price Manipulator, I not only mean it, but I have just proven it. Retail Forex is rigged by definition. The only broker that I know of that even comes remotely close to what I have proposed above is DCFX. They are not perfect. They are nowhere near a perfect price transparency model. However, they do offer a few things to help the trader get closer:
1) They use a commission based profit model
2) They do not grossly widen spreads
3) They offer an API
4) They provide proprietary pool DMA and DOM
They do have Pricing Engine. They do manipulate their spreads but they do it in exactly the opposite direction of FXCM and other FCM/RFED type brokers. So, you are not seeing true Interbank rates on their platform either, but you are not getting hosed down with absurdly gross spread widening algorithms, lagging platforms, hung platforms, re-quotes and perpetual negative slippage - combined with no way to access the DOM via API to build your own Price Engine.
Therefore, DCFX is nowhere near perfect, but they have one of the best opportunities for the retail trader to start taking advantage of better pricing and something closer to true DMA than anything else I've seen in the retail space thus far. They don't make it easy to build, but it can be done - I've done it and it works beautifully. Scalping becomes too easy on such a platform when you control the spread at which you enter and exit the market and this is part of what FXCM fears.
Now, if Jason Rogers, wants to engage in this level of discussion instead of the obligatory and superficial trivialities that don't really get to the heart of the problem, then I am more than willing to have that conversation out in the open. But, I doubt seriously that he or anyone else at FXCM wants to engage at this level of discourse.
We haven't even begun having a conversation about a possible FIX (
Financial
Information E
xchange) protocol driven FXCM/DOM type of solution that could really turn your retail trading into a turbo-charged trading machine. The problem? Well, while FXCM does offer O2G and the FC API (C++ or Java) with access to history data, they don't provide the needed DOM access to capture optimal spread opportunities as mentioned above.
This would mean exposing the pool's
true Bid/Ask chain at all levels. With that view of the data stream, you can capture optimal spread moments and become one heck of a Scalper. They fear that the most as it would alter counter-party risk profiles and level the playing field in the aggregate. Profitability percentages swing back to the traders who take advantage of such optimal spread scenarios and that is not what they want to see happen to their algorithmically driven margins.
They bet on the aggregate ignorance and misplaced emotion of the retail trader to drive their profits - bottom line.
Now, ask Jason, to discuss these matters with you at depth and see what kind of response you get. Without question, you will get a non-sequitur reply - if that much.
