FXCM Review
What’s The Attraction?
I lost my forex trading virginity with FXCM. When I had learnt the basics of the forex trading world and felt ready to open a live account I thought that by trading with the largest forex broker in the world I would no doubt be trading with the best.
Unfortunately FXCM began to wear quite thin quite quickly – the large spreads (at that point in time) were one of the largest in the business and their platform was nothing spectacular. I immediately began to wonder why they were the largest in the business as there certainly wasn’t anything that kept me attracted to it.
So, after being a client of FXCM for a couple of years I failed to see the reason for the large attraction. Maybe it was their large advertising budget… maybe it was their ability to large land clients… or maybe it’s their ability to offer such a great commission to referrers who land clients for them (FXCM pay the highest commission to referrers who open a live account and have their clients trade with them). Whatever it is though I think you too will be pleasantly surprised at why this featureless forex broker is the largest in the business.
But then again maybe that is the attraction: FXCM is just simple. I know from my personal experiences in life that the simple things are often the best! Maybe FXCM have been able to successfully apply this adage to their business!
Therefore, if you’re looking for a good reliable platform then look no further than what FXCM has to offer.
Live & Demo Differences
One of the best aspects to FXCM is that there are no differences between their demo and live accounts. What you see in the demo account is what you will get in the live account. In fact all you need once you have a live account is to simply flick the switch on your login entry screen from “demo” to “live”. That’s probably the only difference!
What We Liked About FXCM:
Once upon a time the best feature at FXCM was its ability to honor stops. Unfortunately those days of guaranteeing stops are no longer around especially around volatile announcements such as the Non Farm Payrolls.
But what we do like about FXCM is its ability to offer 18 different currency pairs with the 4 majors having 5 pip spreads bar the EURUSD which has 4 pip spreads (FXCM has changed and they now offer 3 pip spreads on the EURUSD & USDJPY) which remain fixed regardless of the underlying market conditions.
FXCM also offer mini accounts ($10k contract sizes) with leverage of 200:1 alongside their standard accounts ($100k contract sizes) with leverage of 100:1.
What We Didn’t Like About FXCM:
Some of the restrictions recently imposed by FXCM weigh on the negative side for FXCM. As FXCM seem hell bent on maintaining a no slippage policy they have resorted to these restrictive measures to help the “client”. These measures deny any stop or limit orders being placed 5-15 minutes prior to a major announcement, and deny any stop entry orders being filled if the
currency never trades at your stop entry price! This makes designing a forex system very difficult if your forex system utilizes stop entry orders, because now you have to wonder if FXCM wouls have been able to enter you into your hypothetical backtesting trades… and if they wouldn’t have then you’ll have to reanalyze your backtesting data!
Another problem we found was that you can only open an account in USD. This is fine for the majority of forex traders that live inside the US, but can be a little annoying for our international partners who have a currency that is appreciating against the USD and thereby has to lose capital while the US dollar continues to depreciate. Of course this can work the other way too. I think it would be great if FXCM could offer the ability to have multiple currency denominated accounts so that the customer can have their capital appreciate over the long-term by transferring funds into the currency that will appreciate the best in the long-term. The client receives the income from their trading activities, plus the appreciation of their capital. Other forex firms have this capability with Oanda being the smoothest.
We also particularly didn’t like FXCM’s news and charting platforms – two klunky programs that need a LOT of polishing.
Lastly, we found that mini positions do not accumulate interest during rollover. This is only a minor issue, but other forex brokers pay interest regardless of what the position is, one notable forex broker that pays rollover interest on mini positions is CMS.
In summary then…
FXCM PROS:
- One of the largest forex brokerage firms in the world (has partnered with the Refco Group)
- Excellent platform, easy to use
- 100:1 leverage
- Good 24/7 Support
- 3 pip spreads on some majors
FXCM CONS:
- FXCM’s entry order restrictions
- Charting and news packages could be better
- No rollover interest received on mini positions
- Platform fairly basic and featureless
Our Rating:
Unfortunately there really isn’t a whole lot to FXCM, which makes rating it a difficulty. I give them credit for their platform’s ease of use, but then I take away that credit because of their klunky news and charting plug-ins. With all that is left it seems that FXCM offers nothing different to what others offer and in most cases LESS or WORSE than what others offer, therefore, we decided to give FXCM a score of…
If you have a similar or differing view, click on the comments link below and add your opinion about this broker.
Tags: Capital Forex Market, FXCM, FXCM Station Trading, FXCM Trading, FXCM Trading Station, FXCM com, Forex Broker, Forex Capital Markets, Forex Capital Markets LLC, Forex Capital Markets Ltd
January 15th, 2006 at 12:23 am
FXCM allows slippage of 80 pips. I have had a mini account with them but after they executed my market order with 80 pips slippage I decided to find another broker. It was on the first Friday of November 2004 during NFP announcement. When I asked them why did they they allow such huge slippage I received a long letter in reply (from certain Sameer Bhopale) that contained an extract from their web site: “*…All stop-loss, limit and entry orders are guaranteed against slippage EXCEPT IN EXTRAORDINARY VOLATILE MARKET CONDITIONS…”
Such extraordinary volatile market conditions happen every time NFP figures are announced: FXCM simply does not give you a chance to trade within at least 40-45 minutes after NFP announcement. In other words, they are real jerks.
April 30th, 2006 at 8:55 am
I don’t know when this was written, but it must be old. They have many options for opening accounts in different currencies and recently updated the news plug-in to the tradestation. Also, the spreads they offer are at least as good as anywhere else, and the fact that I can reach them 24 hrs/day is quite comforting.
May 22nd, 2006 at 11:32 pm
look at refco today that surely is going to be the tomorrow for FXCM, sonner than later now after the plan for a centrelized FX market in 2007.if i were you I certainly will start to worry about the safety of my funds in those bucket shops now.
July 7th, 2006 at 7:40 am
I’m neiter not a friend of FXCM. To be honest: they suck!
1) In a uptrend you always get quotes 1-4 pips above the interbank prices.
vice versa below in a downtrend
2) Yes NFP, rates and similar announcements!! Worked fine the first two times. My average is around 70% on NFP (got a small Mini account for such events). As soon as the note that you’re making money, a nice pop up appears: ” waiting for dealers respond”. One minute later quotes are up 60 pips and the trade has been rejected (not requoted!).
3) EUR/GBP I wake up in the morning and I look at my tradestation chart. great! Position 1 should have been closed, target reached. I open the trading Station and what do I see, the position is still there. FXCM low was 3 pips above my target while the tradestation chart was 4 pips below my target (short trade). lost some hundred euros because of this and since then I have not used FXCM for my normal trades.
SUMMARY: FXCM is the biggest Bucket Shop I’ve ever seen. I’m trying Oanda now and my big company account is at mbtrading.com where I got interbank quotes (paying commision). Such brokers are not recommened to trade anouncements.
I hope many peoples are reading this and that they wont do the same mistatke I did = opening an account at FXCM!!!
July 15th, 2006 at 1:29 am
[...] I personally found that IFX Commerce was less volatile than say other brokerage firms such as FXCM. What I mean by that is that other firms such as FXCM might fluctuate a few pips up and a few pips down and then return to where it first started – all within the matter of a minute or so. I found that with IFX Commerce such fluctuations either did not happen, or did not move as much. Obviously when there were extreme movements of volatility I did find that IFX Commerce’s price moved in sync with other forex firms. [...]
October 5th, 2006 at 6:00 pm
what can i say but this bucketsop needs a slap on the face!!
i have gone throught numerous website reviews on broker ratings/reviews and found FXCM to be the most attacked and disliked. I have used them personally and i think the worst of them, They are a bunch of thieves looking to rob forextraders at large especially newbies. Stay the F away.
October 6th, 2006 at 9:16 pm
Had an account with FXCM for a year. Started with their Demo and profited; it seemed easy to simply follow chart patterns and make gains. But I was conservative and waited six months before committing to a live account and even then never held more than ten lots at one time on the Mini account. Over the next six months I lost $16,000, in spite of applying every possible caution (stops, limits, monitoring news and heavy technical analysis) and in spite of spending 8-10 hours a day trading both on a long and short term (minutes and hours) basis. I started to reach what I believe is the top of the obscenely steep ‘learning curve’ one faces with Tradestation, in the last few weeks. I traded $150 into about $450 in one week and before that, $650 into about $1600 in one week. However, I encountered several major problems with Tradestation which I believe have caused much of my losses and are a result of deliberate fraud by FXCM or those who have a business relationship with it. This month, after I began to recover money through strategy changes, my account was suddenly closed without notice. FXCM had sent me an email stating that (somehow) I had ‘abused’ FXCM staff. I responded that this was wildly incorrect and untrue but have not had a reply. I complained bitterly to FXCM both online thru their chat service and a couple of times when they phoned me, that I was certain my account and its trades were being both monitored and intercepted. A very clear example of this happened last week (my last trade); I sold GBP/JPY at 221.75 and held the trade for 24 hours. The pair struggled to rise as the market had been in a long downtrend and only recently reversed direction (hence the hold for 24 hours). Strangely, as soon as the pair came within the spread charged by FXCM for the BID to clear out my account thru a margin call (i.e., 222.71 plus the 9 pip spread, or 222.80), I was cleared out (monies stolen) and THEN GBP/JPY PLUMMETTED FORTY PIPS within the next five, ten and 30 minutes (i.e. the direction suddenly and completely reversed). I cannot understand how such a reversal can take place thru ‘normal market activity.’ Thru my talks with FXCM staffers, I was told FXCM never risk anything (ie such as their own money) and that such things as unexplained data losses in their Tradestation chart feeds, ‘brownouts’ (Tradestation just quits working after being online for an hour or so, even though I have good broadband and all other connections are up), and the ‘unusual trading patterns’ (where you are margined out sometimes by a few pips and then the price reverses. This makes sense if the market is trending in the direction opposite your bet; it doesn’t make sense for a pair to reverse after a counter-trend, only when your personal account limit has been reached). I was also told that ‘repairs are being made’ to ensure that data holes don’t occur in the charting data feed (but it was continuing to occur as late as last week) were nothing unusual. Additionally, and most worryingly, I was told that FXCM couldn’t guarantee that my trades would not be packaged with trades in the same pair but the opposite side of the market (i.e. If I was short, that my trade would be ‘packaged’ with a trade in the same pair in the opposite side of the market), and worse, that ‘in 80% of cases, all mini account trades are traded in house and never sent to the interbank market.’ This means in essence, that when you trade with FXCM and have a Mini account (and most likely, smaller non-Mini accounts up to a certain level) that your trades will NEVER be sent to the real market and that you are in effect always and only trading with other FXCM Mini Account holders, whilst FXCM artificially manipulates your trades to ensure that you THINK that your account activity is following the real market. Let’s face it, FXCM is shit and the reason is right there on their website! They baldly state that they take on ’4000 new clients’ every month. I was with them for a year and they constantly hyped the ‘fact’ that they ‘serviced’ (whatever that means) 78,000 accounts; but if they were adding 4000 new clients a month, why aren’t they up to 100,000 clients now (and more!!)?? Because SO MANY clients LOSE EVERYTHING and LEAVE FXCM but do we hear a peep about these poor sods? No! Stay away from FXCM or take them to court; to me these are the only options.
October 30th, 2006 at 6:29 pm
Hello this is weird I am a newbie what are you guys saying about FXCM, Im a newbie recommend a solid trader.
November 3rd, 2006 at 9:12 am
Hi pipsqueak,
If you’re looking for a solid broker I personally recommend Oanda.
Other’s have recommended Interactive Broker’s.
You’ll just need to find what suits your requirements as we’re all different.
All the best,
Ryan
December 23rd, 2006 at 6:09 am
I appreciate that you gave FXCM’s trading platform some low numbers, but I have to disagree with the con of its simplicity. For a newbie to Forex Trading this is actually a pro.
I started with FXCM’s trading station and its simplicity was great. I moved on to GFT and the complexity of choice on GFT’s charts, indicators and setting up forward selling/buying positions and orders had my head spinning. However, I now wouldn’t trade GFT ‘s platform for anything and after having tried some of the other platforms I have found that they are just too simplied for me to go back too.
I still utilise FXCM but mainly for position trading to earn interest.
So, if you are a newbie to Forex, to learn the basics of charting and getting in and out of trades with ease I recommend FXCM. Once you have the basics and want a package with a bit more meat, then I happily recommend GFT.
Note: And if you are a newbie to Forex – ignore all the “trade the news (Fundamental Announcements) to make a quick buck” – whatever the platform/Broker you use. You will just get burned……..
April 3rd, 2007 at 1:54 am
I totally agreed with some of the commentaries given here… FXCM is sux… and to be honest I did not realise it until this week. I’ve used them for almost 1 year and I believed my early trades went wrong due to my lack of knowledge. However, I learnt all technical analysis and I am very confident I understand fully all these indicators. I applied these strategies with stocks and 80% of time I made profits.
With FXCM, I lost 4k this month even though I applied all technical analysis and follow through everything carefully. I traded on mini account and I got to the stage where I totally believe they know where my orders are and wiped out everything before it went down or up again. How the hell can this happen!! that’s because they do not want to lose money and they know I can make 100 pips profit with 20 pips stop but instead they created these short spikes to wiped out my positions. I was totally frustrated and I cant think anything else other than this is manipulation. I tried all different strategies and they got wiped out quickly when you know you are going to have an extreme downtrend or uptrend….
A few noticeable anomalies in the system confirmed my suspicious….at one one time…. GBP/USD went down to 1.9450 where I checked in other forex websites, the rates only went down to 1.9470. It closed all my orders and went up again.
I also put 100k orders a few times and all a sudden I saw big spikes to wipe out my orders quickly. Based on hourly charts, I do not think this can happen that quickly or possible to happen. Well, it doesnt happen one time but happened almost 10 times in a row.. No matter what positions I took… they will get it…..
ANY SUGGESTION ON A RELIABLE and NOT FRAUD TyPE BROKERS?
October 25th, 2007 at 7:57 pm
I quite appreciate all the comments i read about FXCM.I have been with them for quite a long time now and i do not seem to understand majority of the complains people make about them.Though i sometimes loose money due to internet connection failure but i always make profits and the only thing i wouldn’t do is trading News cos it can be disastrous atimes.
I Implore those people that complain to try some other brokers to ascertain which one is most reliable to trade with.But of all the brokers i choose FXCM if there would be another chance in heaven to choose a broker.
Keep the FXCM flag waving high in the sky if actually you want to trade in a profits market called spot.
October 25th, 2007 at 8:01 pm
Greed allows people to loose money on FXCM
November 30th, 2007 at 2:53 am
FXCM takes the other side of your trade, and they told me that their policy is to be within five percent of the actual market price when they take your trade. That’s how they took $5,000 from me in “slippage” on one trade, so I waited until the account was up $18,000 and then closed my position and the account. GAIN Capital is the same.
I’m looking for someone (I hear cbfx is honest but they don’t respond to my emails) who can trade my TradeStation strategy automatically. It trades on two-minute bars 24 hours per day, and back-testing (not including interest) shows it could double my account each month.
November 30th, 2007 at 8:36 am
Hi Jack,
You may want to check out Dukascopy’s Agent API here.
Ryan
December 17th, 2007 at 4:42 am
So what’s the best site to use if FXCM is such a rip off?
March 12th, 2008 at 7:18 am
They are all as bad as each other. If they were not then nobody would lose. Proven by the fact everyone makes a fortune on demo accounts but then once they do the real thing they have a terrible stroke of bad luck trading the same strategy that worked before.They dont want you to be able to hold positions over night because then the odds are in your favour so they give interest. Its a system made up of thieves. You really need to get in quick and take a quick grab of profits before you get wiped out. This method works but again then they win more than you win from the spread even tho you are up for the day. I just cant get my head around the fact they have so many disclaimers that say they basically can do what ever they like with your money and for some reason this is classed as legal?? Good luck with your trades guys. There are some major crooks out there living the high life while you stay at break even for a lot of effort. Dont get greedy and take small pips consistantly if you want to stay in the game.
June 29th, 2008 at 6:31 pm
So what’s the best site to use if FXCM is such a rip off?
July 16th, 2008 at 2:10 am
Well none of this is encouraging. I am still in demo mode with FXCM and have plans to start trading in live mode in about 3 weeks but everywhere I turn there’s another conversation about FXCM being a scam and a rip off.
Just a note: it says in the post that there’s no difference between the demo platform and the live platform but when I contacted FXCM and asked if the demo platform and the live platform are the same I was told that they are not exactly the same. I was told that when in demo mode you don’t experience slippage or the effects of volatility. Was that there way of telling me that in live mode I won’t be making any money?
September 27th, 2008 at 12:24 am
I have been using FXCM as a demo for 3 months, I will throw 25 bucks into Fxcmmicro soon. I am not certains that all of the alleged things stated are true, not to saying anyone is lying. How can they move the market when there are so many other traders, brokers, and orders in at the same time. Would they not want you to be profitable so you keep paying the spread?
This is a bit discouraging, I’m sure it is not as bad as all the above states.
Cheers,
Kyle
October 17th, 2008 at 2:37 pm
I have been trading a Demo account with what i think is a solid strategy, i have deposited funds into an account to be transferred to (i was going to fxcm) and then i read the full discloser statement, when Appling for an account which includes (separately ) a wavier to take them to court or any legal hearing, furthermore it pretty much states many times, that FXCM can do anything they want to your account, including closing it at a loss to you at their discretion, or demanding you increase margin with only 24hour notice, you also basically agree in the disclosure that you have no rights to recourse.
certainly made me think twice.
i think after reading the above I’d rather just pay commission fees and know that at least then there is not such a glaring conflict of interest.
I start to get the feeling that the “Demo” account is much more successful than the “Real one”.
And I really don’t want to deposit fund just to see them go to scammers if above is primarily true, I can go to the sideshow at a gala and get scammed I don’t need to get scammed this way.
January 2nd, 2009 at 11:32 am
Be careful with FXCM. Morons in charge of the company. For example, Jan 1. 2009 Asian markets start trading at 5pm EST, Fxcm didn’t bother to open their trading activities until 2am the next day.
Totally irresponsible!
April 25th, 2009 at 2:43 pm
FXCM is a great broker. They have some of the best spreads around. As for the demo account not being exactly like a live account this should be obvious because the demo doesn’t rely on liquidity! You can get an active trader account with FXCM which shows you the liquidity. If you have any question about how the market moves follow the moves on charts from multiple sources. The data from multiple brokers does the same thing so they are not creating sharp turn-arounds just to still your money. These accusations are ridiculous. You really think these companies are working together to steal a couple thousand dollars from you? That’s chump change. The review was written a long time ago before Trading Station 2 which has lots of indicators and oscillators. You don’t need all that much to make profitable trades anyway. Just use your brain. I usually don’t experience any slippage and when I do it is only a small amount. I have been trading with them for several months and I have only had one complaint. There was one day where the trading system went down for an hour or two but it didn’t affect my trades so it was just a little aggravating. I started out trading using GFT but FXCM Trading Station 2 is years ahead of that piece of crap platform they use. I also demoed with OandA and a few others and haven’t found anything I like better than this. The only feature I wish they had was making a parallel line like you can do on FXStreet’s charts.
May 21st, 2009 at 9:39 am
Riley, wake up or go back to your corner office at FXCM. They suck with both execution and technology. One would think that after being around for several years they would learn to improve their operations a bit – unfortunately those guys did not learn anything! I will never trade with them again
June 23rd, 2009 at 9:35 am
What else is there aside from FXCM?
I’m currently using IG Markets and CMC Markets. I’m looking for the best one to trade.
July 16th, 2009 at 11:35 am
Thanks for all the responds. I had a look at their tool and it just looks to good to be true. I am new to Forex but have done some stocks trading with ThinkOrSwim. So far so good. Anybody traded Forex with ThinkorSwim?
August 13th, 2009 at 6:31 am
AVOID AS HELL….
FXCM is the worst broker ever! they are cheaters and scammers….they say they don’t have a dealing desk, but I bet my c…k they read everthing and steal all they can! They stole me really a lot playing bad tricks..like not respecting stop loss in order to make me go in margin call and close me all the positions, making suddenly disappear open positions, requoting me everytime there’s a good opportunity of earning and so on…
My piece of advice is run away from these scammers….they are miserable money sucker…