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ATC good, FXCM bad, how is that?

corni

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Hello, how is it possible that FXCM gets 2.4 average stars in reviews here on FPA and at the same time ATC Brokers, who are introducing broker to FXCM get amazing 4.7 stars on average?
Shouldn't spread, execution and slippage be the same (or worse) for any IB compared to the "main" broker?
 
I am still searching for a honest broker (if such a thing exists), that is why I ask. I opened an acocunter at FXCM only to read very bad reviews here to days later. :D
 
There are multiple possible explanations. Here are two for you:

1. An IB/WL is almost always smaller than the broker it connects to. If this is the case, it might provide much more personalized services.

2. The IB/WL may market towards experienced traders. If so, it won't get nearly so many 1 Star "They closed all my positions and took all my money!" reviews from clients who don't understand the concept of a Margin Call as a broker with many brand new traders as clients.
 
Thank you very much for your reply. Another reason could be that as far as I know ATC is only offering introducing service for non dealing desk accounts on FXCM and not the market maker accounts, which will probably have many issues which do not apply to the NDD accounts. From those reviews I would conclude that there is nothing "wrong" with going for FXCM with NDD account. I will analyze slippage anyway.
 
Ah good. You need to be paranoid when dealing with any broker. Check that slippage and recheck it from time to time. Check the reviews at least once a month to look and see if there is any sudden wave of complaints about withdrawal issues. 10-20 minutes a month and you'll be able to sleep better at night.
 
Thank you very much for your reply. Another reason could be that as far as I know ATC is only offering introducing service for non dealing desk accounts on FXCM and not the market maker accounts, which will probably have many issues which do not apply to the NDD accounts.

Welcome to the forum, Corni :)

Pharaoh hit the nail on the head. It's worth keeping in mind that the vast majority of FXCM clients are pleased with our service and execution. In fact, the latest CFTC data show traders have more money on deposit with FXCM than any other US-regulated forex broker.


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Also worth considering is the fact that we've been in business since 1999 making us one of the oldest firms in what is still a relatively young industry. If less than 1% of our clients past or present express a grievance about something, it may seem like a large number of traders compared to other brokers, because we are bigger. However, it's not as large relatively speaking when you consider the percentages.

That's not to say that we don't take such client feedback seriously. My primary goal on forums such as Forex Peace Army is to answer questions about FXCM and address any potential concerns. However, if you see my other forum posts, you will find that I don't simply promote our firm. I actively contribute to discussions to provide service and education to traders.

This also highlights how FXCM dedicates a greater amount of resources to educating new traders than many other brokers. That means more novice traders choose to begin their forex journey with us. The flip side of this is that when they misunderstand something about how the market works or how to use the software, they sometimes blame us.

From those reviews I would conclude that there is nothing "wrong" with going for FXCM with NDD account. I will analyze slippage anyway.

That is a correct conclusion. We take great pride in offer No Dealing Desk (NDD) forex execution to Standard accounts (5k minimum) and Active Trader accounts (25k minimum). On the NDD model, FXCM offsets each client order one for one with the best prices from competing liquidity providers.


liquidity-providers-logo-group-desktop.jpg


With the NDD model, FXCM doesn't take the market risk on the other side of client trades, so we don't profit from client losses, or lose from client profits. Instead, FXCM makes money from client trading volume. We even offer commission discounts to high volume traders.

That said, there is nothing wrong with the DD execution we provide to Mini account ($50 minimum).

On the DD model, we will face market risk as a result of entering into trades with clients. Because of this risk, FXCM needs to implement certain restrictions during news events. The typical 2-5 pip minimum distance from current market rate for stop and limit orders on DD accounts could increase to upwards of 10 pips. Note that No Dealing Desk (NDD) accounts with FXCM have no such restrictions regarding order placement.

Additionally, we may take steps to mitigate the risk arising from market making more effectively by transferring your underlying account to our NDD offering. For example, Mini accounts with equity greater than 20k are automatically converted to Standard accounts with NDD execution.

That means, we don't have to resort to the dealer intervention practices (re-quotes and excessive spread widening particularly during news events) which can occur with DD-only brokers, and you can have confidence in trading your FXCM account regardless of the account type you choose.

I will analyze slippage anyway.

According to the latest execution statistics for FXCM:
  • 78.71% of all orders had NO SLIPPAGE.
  • 12.77% of all orders received positive slippage.
  • 8.52% of all orders received negative slippage.
  • 50.02% of all limit and limit entry orders received positive slippage.
  • 39.9% of all stop and stop entry orders received negative slippage.

Furthermore the Market Range feature for market orders, and Range Entry feature for entry orders allow you to specify how much negative slippage you are willing to accept on an order.



If the order cannot be filled within your slippage tolerance, then the order will be canceled to protect you from unwanted negative slippage. Note these tools only limit your negative slippage, not your positive slippage.
 
Thank you very much for your detailed answer. Well, FXCM was not only one of the first retail brokers out there, but also one of the first to make millions by scamming their clients. :p http://www.ft.com/cms/s/0/1b5dcd8c-9ee5-11e3-8663-00144feab7de.html#axzz4HqZ2Fsmb

And NDD does not necessarily mean that there is no kind of intervention. For example I doubt that 0.01 lots will be directly "forwarded" to the liquidity providers, because who of those wants to bother with 1k orders? So they are probably somehow matched within the system before? In my opinion a real NDD would have to be able to
a) Show the counterparty for each trade. As far as I know FXCM is always the counterparty even on NDD accounts.
b) Execute limit orders within the spread so that one can "make" the spread by providing liquidity. Don't think it is possible on FXCM.

Anyway, I already opened an account with FXCM, mainly because I wanted a free VPS in New York, which btw has about the same power as a 1 EUR server in Germany. :D
But the service of the VPS provider (beeksfx) is not FXCM fault. So I will see how it goes and if the slippage statistics are true.
 
Thank you very much for your detailed answer. Well, FXCM was not only one of the first retail brokers out there, but also one of the first to make millions by scamming their clients.

Hi Corni,

Unfortunately, the link you posted is to a subscription site, so the rest of us can’t read that article you shared. If you have an alternate link, I’m happy to address your concerns about it. :)

And NDD does not necessarily mean that there is no kind of intervention.

Actually, that's exactly what we mean when we say we offer No Dealing Desk (NDD) forex execution to all Standard and Active Trader accounts. There is no dealer intervention, because FXCM offsets each client order one-for-one with the best prices from the competing liquidity providers as mentioned in my previous post.

liquidity-providers-figure-1-desktop.jpg

Our webpage has more details on how NDD works.

For example I doubt that 0.01 lots will be directly "forwarded" to the liquidity providers, because who of those wants to bother with 1k orders?

When FXCM first introduced NDD in 2006, the minimum order size for this execution model was one mini lot (AKA 10,000 currency units, 10K or 0.10 volume on MT4). However, due to the popularity of our NDD execution with traders, and the sheer volume of orders they executed with our liquidity providers, FXCM was able to extend our NDD model in 2012 to include micro lots (AKA 1000 currency units, 1K or 0.01 volume on MT4).

So they are probably somehow matched within the system before?

There is no internal matching of client orders on our NDD model before we offset these orders with our liquidity providers. Even for orders as small as one micro lot, each client order is offset one-for-one with the best prices from competing liquidity providers.

In my opinion a real NDD would have to be able to

a) Show the counterparty for each trade. As far as I know FXCM is always the counterparty even on NDD accounts.

It's important to understand that being your counterparty says nothing about the execution model we offer. In fact, all retail forex brokers are the counterparties of their clients, regardless of the execution models they use. That's because the major banks and financial institutions comprising the interbank market don't want to take on the counterparty risk of individual retail traders.

On our NDD model, FXCM is simultaneously your counterparty and the counterparty to the liquidity providers on the other side of your trades. That means, if you lose on a particular trade, the banks on the other side come to us, not you, for their money.

b) Execute limit orders within the spread so that one can "make" the spread by providing liquidity. Don't think it is possible on FXCM.

Our Pro division offers traders the ability to make prices.

Anyway, I already opened an account with FXCM, mainly because I wanted a free VPS in New York, which btw has about the same power as a 1 EUR server in Germany.
C:\Users\safzal\AppData\Local\Temp\msohtmlclip1\01\clip_image001.png


But the service of the VPS provider (beeksfx) is not FXCM fault. So I will see how it goes and if the slippage statistics are true.

Welcome to FXCM, and please let me know if you have further questions!

PS: Two VPS providers are listed on our site, so if the first one you tried did not meet your requirements, I encourage you to try the other one.
 
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