Fxcm uk

redtag12

Active member
153 3
Good Morning,does anybody have any experiance of FXCM UK margin seems good on a micro acc £5, spread seems a bit high but liveable. Meta 4 which i like.Going back into trading after a 4 year layoff markets differant. so a Micro acc seems the way to go.Any help would be appreciated.
Mike
 

pboyles

Legendary member
8,072 1,303
Good Morning,does anybody have any experiance of FXCM UK margin seems good on a micro acc £5, spread seems a bit high but liveable. Meta 4 which i like.Going back into trading after a 4 year layoff markets differant. so a Micro acc seems the way to go.Any help would be appreciated.
Mike

They were fined about $20 million for ripping off clients with dodgy slippage practices. What does that tell you?
 

pboyles

Legendary member
8,072 1,303
Ah,quite a lot,checked them out at the FSA no fines there so i assume it the USA reg that fined them?

They were fined by the SEC and the CFTC, both US regulators.
 

Jason Rogers

Senior member
2,772 93
Good Morning,does anybody have any experiance of FXCM UK margin seems good on a micro acc £5, spread seems a bit high but liveable. Meta 4 which i like.Going back into trading after a 4 year layoff markets differant. so a Micro acc seems the way to go.Any help would be appreciated.
Mike

Hi Mike,

Welcome to T2W :)

I'm FXCM's Ambassador to Online Communities such as this forum. Feel free to ask me questions about FXCM's platforms and services in our discussion thread. Regarding our spreads, we recently introduced a new lower spread account option using dealing desk execution. These new spreads are also available on the MT4 platform.

Ah,quite a lot,checked them out at the FSA no fines there so i assume it the USA reg that fined them?

Here is a post where I covered that case in more detail. Additional questions regarding the case can be directed to our Compliance department at [email protected].

Alsoi have read that interbank do not support micro lots or accept them so are FXCM ECN?

As I mentioned above, FXCM lets you choose between two different execution types. Some MT4 EAs will ask you to specify whether your MT4 platform uses ECN or market maker execution. If you use an FXCM MT4 account on our No Dealing Desk forex execution model, then set your EAs for ECN execution. If you use an MT4 account on Dealing Desk execution, then set your EAs for market maker.

Jason
 

x4x

Well-known member
465 61
Hi Mike,

Welcome to T2W :)

I'm FXCM's Ambassador to Online Communities such as this forum. Feel free to ask me questions about FXCM's platforms and services in our discussion thread. Regarding our spreads, we recently introduced a new lower spread account option using dealing desk execution. These new spreads are also available on the MT4 platform.



Here is a post where I covered that case in more detail. Additional questions regarding the case can be directed to our Compliance department at [email protected].



As I mentioned above, FXCM lets you choose between two different execution types. Some MT4 EAs will ask you to specify whether your MT4 platform uses ECN or market maker execution. If you use an FXCM MT4 account on our No Dealing Desk forex execution model, then set your EAs for ECN execution. If you use an MT4 account on Dealing Desk execution, then set your EAs for market maker.

Jason

Hi Jason,

Can you explain why there is a difference between the spreads - how come no dealer execution is more expensive?

Cheers.
 

Jason Rogers

Senior member
2,772 93
Hi Jason,

Can you explain why there is a difference between the spreads - how come no dealer execution is more expensive?

Cheers.

Hi x4x,

To answer your question, it will help if I explain how we determine the spreads on both the No Dealing Desk and Dealing Desk execution models. Take the following example comparing the prices between NDD and DD for EUR/USD.

In the No Dealing Desk model, FXCM takes the best bid and the best offer from 10+ liquidity providers and adds a pip mark-up. In the example below, you can see the NDD spread on EUR/USD is 2.6 pips. The sell price is 1.29040, and the buy price is 1.29066. Removing our pip markup, we can determine that the best bid from our liquidity providers at the time shown was 1.29050 (or 1.29040 plus 1 pip). In the same way, we know that the best offer from our liquidity providers at that time was 1.29056 (or 1.29066 minus 1 pip). When a client sells EUR/USD at 1.29040 on our platform, we immediately offset the risk on the other side at 1.29050 to make a 1 pip profit. When a client buys at 1.29066, we immediately offset at 1.29056. In this way, the NDD model allows FXCM to make a profit based on the trading volume each time an order is executed without ever taking a market position eliminating a potential conflict of interest between us an our clients.


In the Dealing Desk model, FXCM acts as a market marker, setting the prices and spreads on which you trade. In this execution model, FXCM is on the other side of your trades. That means a loss for you could result in a profit for us, or vice versa. Because we are the market maker on the DD model, FXCM's dealing desk is able to offer lower spreads than those provided by the NDD model. DD execution is used by most brokers in the forex industry. However, FXCM's DD is different, because we still use the FXCM NDD price feed as a base to derive prices and execute orders. We just reduce the markup by half a pip on each side, resulting in a spreads that's one pip tighter as you can see below. That means that our DD execution shares important features with our NDD execution such as no re-quotes and no restrictions on stops and limits.


It's important to note that no matter what similarities the two execution models share, there are fundamental differences between them, and you may experience certain trading limitations when you trade with our dealing desk. That is why we recommend NDD execution for most clients. FXCM believes that NDD execution provides the best overall trading experience, but we also offer dealing desk execution as an option for traders whose primary concern is low spreads.

Jason
 

x4x

Well-known member
465 61
Thanks for your reply Jason
 

R.Charnock

Well-known member
400 124
Presumably one of the 'trading limitations' is that the client can't make a consistent profit before the dealing desk intervenes?
 

Jason Rogers

Senior member
2,772 93
Presumably one of the 'trading limitations' is that the client can't make a consistent profit before the dealing desk intervenes?

Hi RC,

Actually, the trading limitations have more to do with certain types of strategies that could make it harder for our dealing desk to manage risk. For example, strategies that trade at a high frequency or scalp the market are least suitable for Dealing Desk execution. We encourage traders who use those types of strategies to open an account that provides them with No Dealing Desk execution, which is compatible with all trading strategies. On the other hand, a position trader, who is consistently profitable but trades at a lower frequency, does not present the same challenges to our dealing desk in managing risk.

Operating a dealing desk can be riskier than providing No Dealing Desk execution because we (the market maker) are on the other side of your trades. When you are long a currency pair, we are short. When you are short, we are long. Likewise, when you trade profitably, we may experience trading losses. Most dealing desks manage their trading losses by interfering with their client's trading such as re-quoting their orders, delaying their execution, skewing prices, or widening spreads. We do none of that at FXCM. If your trading style exposes us to more risk than we care to manage, we will simply change your execution type to No Dealing Desk, where there are no restrictions on the trading style or strategy used. This is how FXCM can comfortably offer both options without having to resort to the "dealer intervention" that is common at many forex brokers.

Jason
 

pboyles

Legendary member
8,072 1,303
. Most dealing desks manage their trading losses by interfering with their client's trading such as re-quoting their orders, delaying their execution, skewing prices, or widening spreads. We do none of that at FXCM.

Jason

You forgot about them using asymmetrical slippage to rip off their clients.
 
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R.Charnock

Well-known member
400 124
Hi RC,

Actually, the trading limitations have more to do with certain types of strategies that could make it harder for our dealing desk to manage risk. For example, strategies that trade at a high frequency or scalp the market are least suitable for Dealing Desk execution. We encourage traders who use those types of strategies to open an account that provides them with No Dealing Desk execution, which is compatible with all trading strategies. On the other hand, a position trader, who is consistently profitable but trades at a lower frequency, does not present the same challenges to our dealing desk in managing risk.

Operating a dealing desk can be riskier than providing No Dealing Desk execution because we (the market maker) are on the other side of your trades. When you are long a currency pair, we are short. When you are short, we are long. Likewise, when you trade profitably, we may experience trading losses. Most dealing desks manage their trading losses by interfering with their client's trading such as re-quoting their orders, delaying their execution, skewing prices, or widening spreads. We do none of that at FXCM. If your trading style exposes us to more risk than we care to manage, we will simply change your execution type to No Dealing Desk, where there are no restrictions on the trading style or strategy used. This is how FXCM can comfortably offer both options without having to resort to the "dealer intervention" that is common at many forex brokers.

Jason

I've heard it all before, but why don't spreadbet providers make it clear in their T&Cs that the goalposts will be moved as soon as a client does something the bookie doesn't like (ie, not losing money). We all know that most traders will lose without any interference from the platform or dealing desk.

It's a bit of an over-simplification to say that when a client is long you are short, and vice versa, or that you will lose if the client wins. On the main markets much of your risk is taken care of by the self hedging effect of clients trading in opposite directions.

Also, even if there's no dealing desk surely you're still a market maker, otherwise it couldn't be spread betting?
 

Jason Rogers

Senior member
2,772 93
It's a bit of an over-simplification to say that when a client is long you are short, and vice versa, or that you will lose if the client wins. On the main markets much of your risk is taken care of by the self hedging effect of clients trading in opposite directions.

Hi RC,

You make a good point about how dealing desks can internally offset client orders to manage risk. However, certain high frequency trading strategies can present a challenge to the DD execution model, because orders come in faster than they can be offset either internally or with banks. For those types of strategies, FXCM recommends the No Dealing Desk option, since NDD execution is compatible with all trading strategies.

Also, even if there's no dealing desk surely you're still a market maker, otherwise it couldn't be spread betting?

Actually, FXCM's spread betting accounts use the same NDD price feed as a base to derive currency prices and execute orders as FXCM's non-spread betting accounts. The only difference is that our spread betting accounts are designated as such on our trading platforms, back office reports and accounts statements available to clients. This allows our spread betting clients in the UK and Ireland to enjoy special tax-free status.

Jason
 
 
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