Best Thread FXCM Discussion

[moka2]

" we believe that retail clients are better suited for our trading environment as detailed in the study.*"

FYI Retails clients can trade in Futures market easily and in specially day trading can get similar leverage ( unless you are now going to compare it to 1:1000 leverage !)
Example: $500 margin for trading a 100K+ contract value like ES
Advantages:
-Central clearing/ by exchange the entire world can see the prices
- Ability to hedge with Options on Futures
- Other spread trading between futures/ Margin offset
- No conflict of interest with the exchange
- If a/c is opened with SIPC brokerage which swips all money under SIPC protected a/c then CLIENT MONEY SAFTY!
So Mr Rogers no matter what spin you put on both the OTC FX and specially with you mob credit ability is in tatters
These execution studies are of no value if the basically there was no honesty.
By the way before anybody points out "MF Global... YES that was fraud by a broker , not by EXCHANGE big diff! here in OTC the "Broker" and Exchange is the same! simple fact
In case of Futures FCMs it is true that there is no SIPC protection either, however at least the trading venue is a true global transparent exchange . But any way I think you will throw another tangential post about how GOOD and honest your firm is in USA ( oh sorry forgot you were kicked out of USA..) any way go on have a last word!

 

[Jason Rogers]

FYI Retails clients can trade in Futures market easily and in specially day trading can get similar leverage ( unless you are now going to compare it to 1:1000 leverage !)

FXCM limits the leverage on our NDD model to 100:1 which is the same leverage the CME uses for FX futures. That said, if the CME was such an appealing venue for retail traders to execute their own FX trades, you would expect to see more volume in the E-micro and E-mini contracts relative to the standard FX futures contracts.

However, the volume data show otherwise.The following table found in the execution study FAQ (Question #36) displays the average daily notional trading volume for the E‐micro (M6E), Emini (E7), and Euro FX Futures (6E) contract from December 24, 2015 to January 26, 2016.

Average daily notional E‐micro trading volume makes up a mere 1.1% of total EUR/USD futures volume and E‐mini trading volume makes up only 1.4% of total EUR/USD futures volume. There is relatively very little participation in the E‐micro and E‐mini contracts (where it would be expected that most Retail Clients would participate) compared to the standard FX futures contract.

This is particularly relevant to retail traders when you consider that the E-micro and E-mini contracts are not fungible with each other or with the standard Euro FX futures contract. That means, if you trade E-micros, you are limited to the E-micro contract pool of liquidity to offset your contracts (similarly, E-mini traders are limited to the E-mini contract liquidity pool), which you can see is considerably smaller than what is available for the standard Euro FX futures contract.

It's also worth keeping in mind that the E-micro contract size (12,500 currency units) is still over 10 times larger than the micro lot (1000 currency units or 1K) minimum trade size FXCM offers to retail traders with NDD execution. Furthermore, on our NDD model, liquidity providers offer a minimum liquidity of 1M (one million currency units) when they’re quoting, and our retail client benefit from that large liquidity pool to have their orders offset with NDD execution whether they are trading 1K, 10K, 100K or greater and any derivation thereof such as 156K.

In fact, the CME recently delisted some E-micro FX contracts due to the lack of interest: http://www.financemagnates.com/inst...certain-fx-contracts-amid-zero-open-interest/

Why would the CME delist their E-micro FX contracts if they were popular with retail traders?

 

[Jason Rogers]

In case of Futures FCMs it is true that there is no SIPC protection either

By contrast, funds on deposit with FXCM UK are protected by the Financial Services Compensation Scheme (FSCS) for up to £50,000 per client.

 

[moka2]

By contrast, funds on deposit with FXCM UK are protected by the Financial Services Compensation Scheme (FSCS) for up to £50,000 per client.

First of all that is thanks to UK govt not you

Second lets compare apples to apples situation, dont cherry pick
UK: Both Futures and Fx brokers clients are protected .... so you can;t claim that OTC FX is better in that regard

USA FX OTC not protected
FX Futures protected if the broker is SIPC combined
So can't claim OTC FX has advantage over Futures in this regard!

Coming back to volumes take 100K contract on both Futures and OTC FX .. on a TRUE NDD only not with the crazy 1:500 leverage , reason could be Banks actually do physical delivery hence they have a need for a hedge

Any way, until you are prepared to talk honestly abut why FXCM USA was kicked the way it was all this is just a futile corporate spin. and why it hid all those things from NFA and CFTC
Not to mention share holders who showed faith in management and did not expect the investment reduced by more than 2/3 in a day ! becasue of action by management.
Lets see what happens to the various law suits!

 

[Jason Rogers]

Coming back to volumes take 100K contract on both Futures and OTC FX

The low volumes in E-micro FX and E-mini FX futures contracts are relevant to retail FX traders because many of them places trades smaller than 100K.

Since these E-micro and E-mini FX futures contracts are not fungible with each other or with the standard Euro FX futures contract, retail traders using these contracts are limited to a much smaller pool of liquidity to offset their trades.

 

[BJNN]

Yes Sally, part of our settlement with the NFA and CFTC was to close our US subsidiary, but there will be no changes for clients outside of the US.

Since FXCM US has not been a contributor to overall profits for the firm over the past few years, FXCM will target significant cost cutting by closing the US entity. Specifically, withdrawing from this business will free approximately $52 million in capital. FXCM will use the proceeds from any sale of the US accounts, as well as its large amount of regulatory capital currently tied up, to reduce the balance of FXCM's loan to Leucadia. With the reduction of this loan balance, along with sales of non-core assets that were previously announced, FXCM could be in a position to fully pay off the Leucadia loan before the end of this year.

With this exit, FXCM will be in a better position to service our international customers and focus on our profitable subsidiaries including FXCM UK. It's also worth noting that funds held with FXCM UK are insured for up to £50,000 per client by the Financial Services Protection Scheme.

FXCM's full financials can be found here: http://ir.fxcm.com/
We will announce its Q4 and Full year 2016 financials in the next few weeks.

Jason:

Recall when NFA fined FXCM US for “asymmetric slippage” several years ago, FCA did the same to FXCM UK.

So now, I think FCA will do the same thing, fine FXCM UK, cancel its license (as NFA did in US) and FXCM UK will be sold to other broker (as FXCM US is being sold now).

I know my money (in UK acc) is secured, but I don't like the idea that my broker is forced to closed, and my acc is sold to other broker.

What do you say, Jason?

 

[hir0406]

Is it safe to open trading account with fxcm?

Sent from my MI 4W using Tapatalk

 

[BJNN]

Is it safe to open trading account with fxcm?

Sent from my MI 4W using Tapatalk

Your money is secured, because FXCM UK is regulated by FCA.

However, there is high probability FXCM UK will be shut down by FCA, after NFA did to FXCM US.

Then your acc will be sold to another broker.

I would not open acc with FXCM now, just to avoid uncertiannnes.

Think about it: as soon as you hear FXCM is having trouble with FCA, you will be very, very worried and anxious, thinking "what will happen with my acc?".

 

[moka2]

Is it safe to open trading account with fxcm?

Sent from my MI 4W using Tapatalk

First of all if you are from India it is illegal to trade leveraged product like FX outside India (except the FX futures on domestic exchanges)
Second which FXCM are you talking about?
USA is shut down
UK open, Client money safety is there
Australia: Client money safety is not covered like in UK

 

[hir0406]

It is illegal from India if you use inr for deposit and withdrawal.


Sent from my MI 4W using Tapatalk

 

[hir0406]

First of all if you are from India it is illegal to trade leveraged product like FX outside India (except the FX futures on domestic exchanges)
Second which FXCM are you talking about?
USA is shut down
UK open, Client money safety is there
Australia: Client money safety is not covered like in UK

I am trading Forex from last 6 yrs so i know how to trade from India and that is not an issue for me.
I wanted to trade using motivewave and they support fxcm but recently fxcm is in headlines for wrong Reason so i was worried.

Sent from my MI 4W using Tapatalk

 

[Jason Rogers]

I am trading Forex from last 6 yrs so i know how to trade from India and that is not an issue for me.
I wanted to trade using motivewave and they support fxcm but recently fxcm is in headlines for wrong Reason so i was worried.

Sent from my MI 4W using Tapatalk

Hi Hir0406,

As others here have mentioned, accounts opened with FXCM UK are protected for up to £50,000 per client by the Financial Services Compensation Scheme. While part of FXCM's settlement with the NFA and CFTC was to close our US subsidiary, there will be no changes for FXCM clients outside the US.

Since FXCM US has not been a contributor to overall profits for the firm over the past few years, FXCM will target significant cost cutting by closing the US entity. Specifically, withdrawing from this business will free approximately $52 million in capital. We will use the proceeds from the sale of the US accounts, as well as the large amount of regulatory capital currently tied up, to reduce the balance of our loan from Leucadia.

With the reduction of this loan balance, along with sales of non-core assets that were previously announced, FXCM could be in a position to fully pay off the Leucadia loan before the end of this year. As a result, FXCM will be in a better position to service our international customers and focus on our profitable subsidiaries: http://ir.fxcm.com/releasedetail.cfm?ReleaseID=1011502

 

[moka2]

I am trading Forex from last 6 yrs so i know how to trade from India and that is not an issue for me.
I wanted to trade using motivewave and they support fxcm but recently fxcm is in headlines for wrong Reason so i was worried.

Sent from my MI 4W using Tapatalk

It is up to you how you handle the "legality " and irrespective of the fact you are doing it for 6 years the fact is it is illegal for Indian residents. Check RBI website

So coming back to FXCM ... it is in news becasue for obvious reasons,Banned in USA/ Share price down by 60% it is not a joke ...Fan and reps of that company may trivialize it here and give all sort of reasons why it is still honest! but have a look at why this has happened in the first place!
The only thing true about this is in UK yes your a/c will be protected be it a FXCM or others. If you choose others make sure they are truly based in UK and not a EU regulated one with UK Representative . best of luck

 

[rogue8]

Hello Jason Rogers.

I created an S&P strategy in Excel, but I used the daily Yahoo data which is too different from the data from my current broker, Oanda. I just opened an FXCM account and connected it to the TradingView chart. Is it possible to download the FXCM SPX data that I can load into Excel? Can I use Trading Station to export historical data? I need to test the data of the broker that I'm going to trade with. I don't suppose I can somehow trade the TradingView TVC:SPX which has a high correlation to Yahoo and CBOE data.

[Edit: I just created a CQG demo through TradingView and it's only letting me trade the FXCM SPX market. Is CQG just a software vendor and not a broker?]

[Edit2: I've just downloaded Trading Station and exported the S&P data for testing.]

Thank you.

 

[Jason Rogers]

Hello Jason Rogers.

I created an S&P strategy in Excel, but I used the daily Yahoo data which is too different from the data from my current broker, Oanda. I just opened an FXCM account and connected it to the TradingView chart. Is it possible to download the FXCM SPX data that I can load into Excel? Can I use Trading Station to export historical data? I need to test the data of the broker that I'm going to trade with. I don't suppose I can somehow trade the TradingView TVC:SPX which has a high correlation to Yahoo and CBOE data.

[Edit: I just created a CQG demo through TradingView and it's only letting me trade the FXCM SPX market. Is CQG just a software vendor and not a broker?]

[Edit2: I've just downloaded Trading Station and exported the S&P data for testing.]

Thank you.

Hi rogue,

Great to hear you were able to find the export feature on Trading Station

Another suggestion...if you want to export large amounts of data particularly at smaller time frames, I would suggest using the Historical Data Downloader https://www.fxcmapps.com/apps/basic-historical-data-downloader/ . It's free to use also.

Jason

 

[rogue8]

Hi rogue,

Great to hear you were able to find the export feature on Trading Station

Another suggestion...if you want to export large amounts of data particularly at smaller time frames, I would suggest using the Historical Data Downloader https://www.fxcmapps.com/apps/basic-historical-data-downloader/ . It's free to use also.

Jason

Hi Jason. Thanks for the suggestion.

However, I've compared the FXCM m30 SPX price data since 9th Dec 2015 with the Yahoo d1 data (which is the same as CBOE data). The Open price for the NY 9:30am opening is significantly variable (although becoming less variable over the course of the dataset). At one point it is 3% lower than the Yahoo/CBOE price, but generally +/-0.5%.

There's less variability with the daily High, Low and Close prices - although the FXCM daily Highs are generally lower and the daily Lows generally higher. The FXCM 4pm Closes (Close of the 15:30 bar) are more evenly distributed. Highs, Lows and Closes generally have a +/-0.1% variance.

As a reference, the FXCM Highs, Lows, and Closes each have a correlation coefficient of 0.999 to the Yahoo/CBOE data, whereas the Opens only have a 0.34 correlation. This kinda kills my strategy since the open is critical. The FXCM Opens seem to follow on normally from the Close of the 9:00am 30min bar, so I'm guessing the overnight data is skewing the prices relative to my reference CBOE day-session prices.

Could you please help me understand why there's such variability in the Open price? Is to do with your various data providers? Since the variability is slowly reducing, do you think in future, your prices will consistently more closely track that of the CBOE based on your data providers or wherever you derive the S&P price from?

Thank you.

 

[moka2]

Hi Jason. Thanks for the suggestion.

your prices will consistently more closely track that of the CBOE based on your data providers or wherever you derive the S&P price from?

Thank you.

I am sure you know this is a OTC, derived product from the TRUE exchange traded product so there is every probability that there could be variance... with a big broker like FXCM with plenty of buyers and sellers (just like an exchange) + it's own market makers (no pun intended!) there should be min variance.. it should behave more like the true exchange price... BUT there is no guarantee! and we can't question why it is diff than the the CBOE as it is an OTC product.. the "provider" can say whatever they like...I doubt any OTC providers guarantees that the price within a certain limit from the underlying.. that way they have us by shorts and curlies

 

[rogue8]

I am sure you know ... shorts and curlies

Yeah moka. I'm just curious about the randomness with the Open price. I'll check the CME E-mini prices for reference (which also differs to the SPX since it's a different market place). I think my question should be, how is the SPX open calculated each day? I found a strategy that's been working since the 1982 introduction of S&P futures but relies on a good fill at the NY open. I may have to pay up for a futures broker but the CBOE S&P is a bit too pricey contract so hopefully the Emini will work if I can figure out the Open price.

 

[rogue8]

I think I see what's going on. I just needed to compare the charts and look at the CBOE intraday chart. Just by eye-balling them quickly, FXCM tracks the CME E-mini very closely but with the FXCM price offset roughly a few dollars higher.

My mistake, the CBOE open corresponds with the FXCM 9:30 open and the CME 8:30 open. There's still the problem of the variability at the open though.

 

[Jason Rogers]

Hi Jason. Thanks for the suggestion.

However, I've compared the FXCM m30 SPX price data since 9th Dec 2015 with the Yahoo d1 data (which is the same as CBOE data). The Open price for the NY 9:30am opening is significantly variable (although becoming less variable over the course of the dataset). At one point it is 3% lower than the Yahoo/CBOE price, but generally +/-0.5%.

There's less variability with the daily High, Low and Close prices - although the FXCM daily Highs are generally lower and the daily Lows generally higher. The FXCM 4pm Closes (Close of the 15:30 bar) are more evenly distributed. Highs, Lows and Closes generally have a +/-0.1% variance.

As a reference, the FXCM Highs, Lows, and Closes each have a correlation coefficient of 0.999 to the Yahoo/CBOE data, whereas the Opens only have a 0.34 correlation. This kinda kills my strategy since the open is critical. The FXCM Opens seem to follow on normally from the Close of the 9:00am 30min bar, so I'm guessing the overnight data is skewing the prices relative to my reference CBOE day-session prices.

Could you please help me understand why there's such variability in the Open price? Is to do with your various data providers? Since the variability is slowly reducing, do you think in future, your prices will consistently more closely track that of the CBOE based on your data providers or wherever you derive the S&P price from?

Thank you.

Hi Rogue,

The underlying instrument for FXCM's SPX500 CFD product is the E-Mini S&P 500 Future traded on the CME. I can't speak towards the Yahoo CBOE data, but the SPX500 contract will track the E-Mini S&P 500 contract. Could there be differences? Yes. As moka correctly points out, there is no guarantee. The quoted CFD price is based on the relevant futures price minus a fair value calculation, which is impacted by interest rates and dividends, to give the cash value of the index. Also keep in mind the target spread on SPX500 is 5 but it can vary which may cause differences.

Jason