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FXCM - not saying it's a scam, but submitted an audit report. **** happens.

Discussion in 'Scam Alerts' started by arcticpolar, Jun 21, 2012.

  1. arcticpolar

    arcticpolar Private

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    FXCM - scam or not? but submitted an audit report.

    Well just to start off I lost $8,000 to forex trading, my broker was FXCM. I like their no dealing desk execution and it seems like a great forex company. Probably due to my lack of risk management I lost these $8,000 but the prices were very exact in taking me out. It might be someone is playing against me but who knows. I faced a lot of margin calls. This was when I had a US account. the margin requirement is 2%

    Now I'm overseas, my account is not fxcm UK or Asia. just recently transferred. Margin requirements are definitely better. I can hedge as well.

    I was hedging my positions.

    Well my balance was $4,600 equity was like $800. I was scalping during that time. so I closed out a trade for aud/usd at 1.01667. to allow 50,000 of short Aud/usd to run... my available margin was ~$500.... used margin $275 because of the 50,000 position. I made sure all my stop loss and limits were empty for all my hedges. No orders in process that is closeby. The position would have to move 100 pips to actually give me a margin call. at that time probably would have to be around 1.01260- 1.01270 to give me a MC. It wasn't going to reach there, because it's at oversold levels at 4H, 8H, and divergence showing it might go down.

    well whatever happened. 5 mins later. it was going down. I get at -26 sign when it should be giving me profits. it flashed. everything liquates.... In a flash everything was gone. Actually the trading platform did flash all white for 1 sec before this happened.

    I'm left with a balance of 182.64 and equity 182.64

    I panicked and went to click on their live chat over and over but the box wasn't popping up. finally it did after 10 minutes later. the rep thought me to run the report. I did... of course it said MC (margin call). he told me to file an audit report. Now I would have to wait 1-5 days.

    Turns out now it's at 1.0129... still going lower. wow I thought I would get out of these hedges, also waiting for my $2,000 deposit to come through soon to pull out because it actually just a few pips apart. I lost a lot of equity because of the hedges between losses and accounting for the spread.

    well I ran the report it shows that I lost -$3,162.96, rollover -$154.40.... $3,317.36 + on to the balance of 182.64 currently = $3,500

    well at 8:22 am I had a balance of $4,647.39 by 8:30 am I was down - $3,317.36 with 182.64 left. There's at least $1,150 not accounted for.

    Well I don't know how a report like this will show it's a technical problem. I had many margin calls before even though the stops were hit exactly before it reversed... I still blamed it on myself for these losses, but this wasn't my fault. Now it's at AUD/USD at 1.01006 as I'm writing this from the time I sold 1.01667 to now. that's like 66.7 pips * 5 lots I had = over $300... well it's still going down. this time even when I was pretty sure it was going down... I still can't collect the profits. because I'm in an audit with no balance left and no positions.

    I was frustrated, mind boggled, and now I don't even know the results of the audit. I might not even get a penny back... and even if I did get something back it'll probably be $4,647.39.....which doesn't account for any profits I could have made.

    I don't know if anyone can see it wasn't a just Margin Call. I don't know how to prove myself. I hope they have every orders, every stop loss, limit orders I placed beforehand. I made sure every one of them was cleared before I allowed a 50,000 to go running short.

    sigh... Anyone had this problem? I read a post on someone talking about the sync problem but I never really fully understood the problem. I wonder if it was that problem... In a flash of an eye everything was gone.

    I mean if I did have better risk management I wouldn't even be in this position but...I was using the hedge to slowly break away from it.
    now it's at 1.00945.

    can anyone shed some light on this situation.

    I'll inform you of the decision. now I can't do anything but worry and wait. when I should be smiling that i'm closer to getting back my $8,000 I lost.

    Edit: It's currently at 1.00810...i could definitely move the stop loss down, limit would be at 1.00000. close and then buy long aud/usd 50,000. if it reverses at around that point. sigh. Can't do anything now except a lot of worrying. Why is it when I could make profits.... something happens... it's either I hit a stop loss and then it reverses, but now it's not even my fault.

    I went through the account report... i realize there's no way from looking at the statement whether it's a technical error or not. It went through each margin call. I tallied how many sells how many buys. It would be a net 50,000 upwards or it's 50,000 short. whether if it was upwards or downwards doesn't matter because it still didn't drop 100 pips up or down in 7 minutes. =( no spikes.... what took me out? Just constantly thinking, worrying about this... horrible feeling.

    Why is it when I get a trade right... something happens? bad luck? I didn't even report the spikes that occurred in the past before reversing into a profit. I thought it's just my bad luck but now this? found two divergences at the 1h,4h chart not shown here that it was going to fall... overbought levels all crossed over and waited for MACD to cross over. got it exactly at the right time. Then this happens!!! why?
     

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    #1 arcticpolar, Jun 21, 2012
    Last edited: Jun 22, 2012
  2. Jason Rogers

    Jason Rogers FXCM Representative

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    Hi Articpolar,

    I notice that the image you posted includes an account number. For your own security, it's best not to share that information. You might want to try blacking out your account number and then re-posting the image. In case, you've never visited the FXCM discussion thread before, I'm FXCM's Brand Ambassador to Forex Peace Army. I can't speak for the trade audit committee in regards to your case, but someone from that department will contact once they have completed their investigation.

    That said, from reading through your post, it seems possible that your margin call occurred due to spreads widening. One thing to keep in mind is that even when your trades are hedged, it's still possible for your equity to go down, if the spreads widen (for example during the volatility of a news announcement). That is because if the spreads widen you would lose on both sides of your hedge. If your equity was already close to the margin call level, then a widening of the spreads could bring your equity below the margin call level. Now again, I have not investigated the details of your case, and it's possible your situation is different. That is why it's good you logged a trade audit. The trade audit committee will investigate all the details and get back to you.

    Also, I see this is your first post on the forum. Welcome :)

    Jason
     
  3. arcticpolar

    arcticpolar Private

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    I'll read about your posts in other's people's threads. First thank you for your reply. It wasn't even after a weekend. I know during Asian's trading time it would be big spreads but t was very close to New york trading time in 30 minutes. that's a lot of spread to widen to lose ~100 pips instantly. I would be in even more shock if the audit committee just sends me an e-mail saying. "your positions spread widened and instantly gave you a margin call. i'm sorry for your loss." I have seen the hedges make the change the equity up and down. but relatively stable. within a few pips. I have seen FXCM wided pips to 5-7 mostly after a weekend.

    I just read the post "http://www.forexpeacearmy.com/forex-forum/forex-brokers/1125-fxcm-com-12.html#post89628" margin requirements has been reduced, which would be a good thing in that it would increase my available margin. but for FXCM UK I thought it was at 0.5% anyways before that day.

    I didn't have that problem at the Greece Election, and no spikes took me out.
    now AUD/USD is at 1.00292, audit committee won't take into consideration of profits?
    but even getting back my balance is uncertain... waited so long for the return of the short of the aud/usd... when it finally came this happened.

    Are there any statistics on how many people faced technical problems and received a refund? I mean probability is not going to help my case, but it would make me feel more at eased.
     
  4. arcticpolar

    arcticpolar Private

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    Jason,

    I have read your post in other's people's threads. I read the link you gave. If the margin requirement was reduced it would give me a even greater available margin. I thought FXCM UK was already at 0.5% margin requirement. I'm not at ease right now because everything is uncertain. I would be in total shock in the audit committee just says "your spread widening and you were faced a margin call. I'm sorry for your loss." I have seen the spreads widened mostly right after the weekends and sometimes during in the middle of the Asian trading times. But it was 30 minute to New York's trading time. normally the spread doesn't widened to much. I have seen my equity fluctuate but never that much.

    I'm probably guessing the audit committee won't even factor in possible profits.... well right now even getting back my balance is uncertain.
    Always when I might get a profit something happens. A spike.. hits before it reverses, which I would say might be my fault. Why don't these things happen when I'm going to be at a loss? I always thought I lose because of I didn't learn enough of the market. get a better read and try again but even when it's right. it's still pointless. Now this will be horrible weekend and maybe a horrible monday. I know I can get out of this hedge. from the top to bottom. 1.0950 to 1.0000 back and then going back up. with a weekend gap going up most likely.
     
  5. arcticpolar

    arcticpolar Private

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    I'm constantly worrying.
    So I decided to replicate a similar situation in a demo. even worst... the demo account has a bug. I sell 400 lots of AUD/USD at random price.. then buy 400 lots of AUD/USD at the next price I can click on. seeing what would be my available margin. It shows I'm using $1,600 used margin. ~$200 available margin. If it's hedged the used margin should at least be at a zero... until one side of the position is left greater than the other.
     

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    #5 arcticpolar, Jun 22, 2012
    Last edited: Jun 22, 2012
  6. arcticpolar

    arcticpolar Private

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    I'm constantly worrying so I tried to replicate a similar situation in a demo but another problem arose in the demo. when it's hedged, the used margin was at $1,600 which should have been at zero. I'm getting more and more pessimistic by the moment. this gave me more and more doubts. I went to get another demo but the new demo didn't match exactly the margin requirement. it was at 0.5% but it was around 0.45%.

    $3,500 - $4,500 is a lot of money to a student without a job. :( especially when I believe the error is not caused by me. spread widening problem... It seems when I let 50k through it showed a available margin of ~$500... the 2.6 spread was accounted for. the spread would have to widened by a substantial amount. I thought a big spike during big news event might have taken me out which has in the past, but no big spike now. **** still happens.
     

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  7. Jason Rogers

    Jason Rogers FXCM Representative

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    Hi Arcticpolar,

    The trade audit committee will be able to answer any questions you have about your case once they have completed their investigation. In the meantime, I can help with your question about your demo. The demo image you posted is for an MT4 account denominated in GBP. It's possible the margin setup for your real account is different. If you send me an email at jrogers@fxcm.com with your account info, I would be happy to explain your margin settings and set you up with a demo with the same settings. Then you can use that to test out trades.

    Jason
     
  8. arcticpolar

    arcticpolar Private

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    FXCM threw me over to FXCM asia... hong kong? and gave me a representative that said. sure your audit is done. it shows there's no technical problems. you hedged it not so great, so therefore it's gone. if i buy something for $15 I give you a $100 I should get $85 dollars back. Shouldn't I be having some numbers here? even if it liquidates should I be having $275? and it's not a spread problem! he didn't mention any of it when I mentioned it... and why do I have to speak cantonese? If I didn't know it, are they going to get me an english representative. Not even an e-mail responding to the audit. FXCM is great with numbers... they leave all of it out. Nice superb! they said they'll call me back. no call yet... why couldn't they even leave a damn number?
     
  9. arcticpolar

    arcticpolar Private

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    Yeah pretty much is a scam to me. spread for USD/CAD became 12... from the normal 2.5-2.8. It was because of the CAD retail sales news. never seen 12 spread in my life. Normally it gives 5-7 even in Asia trading times or big news but no... 12 sounds like a better number. there's no maximum spread. hypothetically it can go to ~10000000!

    oh yeah they told me they liquidated my position at a price that didn't exist. not sure what's the technical term for it. It's my first time auditing this!!! so I'm getting $60 dollars back! it's like negative slippage but worst because the price didn't exist and it's even further! whoo hoo oh lucky me! lose ~$4,500 and get back $60!

    FXCM gives you the best competitive spreads... I was thinking of comparing other companies spread during that time, but I can't find out. They said regardless it doesn't matter FXCM deals with their great 12 banks and give you the best prices offered! and during that time... a spread of 12 was the best! nice!!!

    oh yeah did I add I deposited $2,000 beforehand to prevent this margin call. the money was taken from the Bank. I requested three times if the $2,000 can be deposited quicker, or expedited, knowing my bank didn't have the money anymore. but nope. They can't! wonderful!!! deposit is super hard, even if it clears from your bank... it's still somewhere. great! It use to be able to expedited but not anymore. FXCM wonderful company... fast deposit with credit card, because it's money you don't have! but with money you have like ACH.. it'll take more than 5 days. it's not 3-5. withdrawal takes more than 5 days. it's not 3-5 days. maybe I'm wrong but you be the judge of that.

    Good luck trading guys. I'll watch out for my margins now. this is a lesson. Regardless of FXCM is no dealing desk or is a dealing desk... We can never see that. doesn't matter. be careful of risk and make sure you factor in a spread of 20!

    Faced a lot of margin calls before and thought it was my fault, but now I doubt if it really was me. there are definitely many ways of taking you out especially those that are trading with bad risk management.

    Well that's the audit results. It's not in their interest to take me out, that's why it's a no dealing desk. it's doesn't benefit FXCM they said... sure.
    Be careful with money... it's no longer how much you can gain but how much of you invest can you protect.

    Well here is just a post of how the only audit I submitted to FXCM play out. Keep submitting audits because I had a negative slippage or whatever the thing is called without me knowing. haha and got $60 back. maybe many of you guys have that too. haha.

    oh yeah last thing my used margin was $275... I ended up with $182.64 = $92.36. Getting back $60 bucks. $32.36 left to nowhere. $92.36 of negative slippage from the Margin Call. Nice!!!
     
    #9 arcticpolar, Jun 29, 2012
    Last edited: Jun 29, 2012
  10. Jason Rogers

    Jason Rogers FXCM Representative

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    Hi Arcticpolar,

    As in other financial markets such as equities and futures, spreads in the forex market can widen when the market becomes volatile. You will find it is quite possible during news announcements, because the banks widen their spreads to reduce their risk given the market uncertainty. Events such as this morning’s Canadian GDP announcement and EU Summit event often cause the market to become one sided during the initial reaction. Liquidity providers are managing their risk as well and will often increase the spread due to that type of market uncertainty.

    Regarding the “price that didn’t exist”, it’s probably not the best phrasing for everyone to understand what could happen in this situation. It doesn’t occur very often, but it is possible that an order can execute at a price that does not appear on the chart. The chart is showing best bid and ask price quoted from multiple liquidity providers. There is depth to the market so prices other than the best bid/ask are still being quoted; however, they don’t appear on the chart since the chart is only displaying the best bid and ask. I can understand how unknown events may initially be given the explanation as a “scam” so I’m happy we have the opportunity to discuss and explain these types of events.

    In regards to ACH transfers, unfortunately the transfer times of these are not controlled by us. You will find that with any financial institution, ACH transfer can take a few days. If you need to withdraw funds faster, you have the option of doing bank wire transfer for a fee instead.

    Always happy to help and all the best with your trading. Let me know if there’s ever any questions I can help with.

    Jason
     
: fxcm, fxcm.com

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