FXCM Review

I did open a standard account with FXCM last month. I was a victim of the wide spreads that occur on my favourite pair at certain times of the day, and during very active price action. I get stoped out a few times in a manner I couldn't explain. I also got stopped out durring the Asian session after gaining 2pips on a move that would have given me about 70 pips in less than 1 hour. Very saddening. I read a lot of wonderful things o their websites; I thought the No Dealing Desk was something that'll be really nice. Now, I really wonder what it'll be with dealing desk.

They are dangerous in the news releases. They take the opportunity when you are in during the news to suck most of your money.I closed my mini account with them 2 weeks ago. As i am a news trader, since 2006, may be most of people will say because o do not know how to trade on news, this is not truth, i developped my own strategies during the news, as i have made most of my profits scalping the news, brokers like fxcm dont like that. my history is: a couple of weeks ago i woke up from my bed at 2:20am london time, i set up my strategy for aud/usd and after i got in to the position with a limit 20pips, i saw the position going over my limit with 27 profits, and i was amazed w/that, because it was supposed to close at 20pips as per my limit, and after that it closed wit 11pips profit only. Well, not too bad, at least it was no loss. But it is strange is not it? I think may be i was sleeping yet. After a couple of days London time in the morning, I was on again and set up my news scalping strategy for gbp/usd, i got in with buy, i put my limit 20pips profit and after 3 minuts i saw my position over my limit with 35 pips profit, it did not close at my 20 pips limit!!! I tryed to close manually, but i could not close.it was runing during 5minuts after release, i was desperate, looking my position in profit and i could not close, i talked to fxcm at same time, and i asked to close my position, they delay for a couple of minutes suddenly i saw my position closed only with 1pip profit, i felt BAD VERY BAD, i spoke with them and the excuse was because of volatility deuring London release. my conclusion, fxcm are completely scammers. PLEASE TAKE OUT YOUR MONEY, STAY WAY FROM THEM. at the same day i took out my money and closed my account. Now i am just looking for a honest broker i can trade during the news. i am tryng to train in a DEMO account with Barclays/UK, they looks like serious i do not know yet, because i didnot open a real account with them. If anyone knows any honest broker who is possible to trade on news, and accept fund with credit card, please tel me at marcobaptistasucesso@yahoo.com ,please. But fxcm never stay away from them.

Paul-that may have been your last chance to get out while in the "black". Giving a Broker a 2nd chance to fail is more risky for your bottom line than trading w/dart board . 1 good deed does not an honest Broker make. Good luck!

This is from a class action lawsuit at fxcm

Defendant’s dishonest trading practices include, but are not limited to, the following:

a. Slow Server Command: When a customer is engaged in profitable trading activity, Defendant routes the customer’s account to a “slow server,” causing trade execution to be slowed down, and allowing Defendant the time to hijack any potential profit in the trade by buying and selling in-between the customer’s order and the real market, with Defendant’s taking any profit and leaving the customer victimized with no money for his or her effort;

b. False “Error” Messages: Defendant uses its administrative back-end software to prevent the customer from closing out a profitable trade and instead causes the trading system to generate any one of a series of “error” messages to the customer, blocking the customer’s efforts to finalize what would have been a profitable order;

c. Flash Trades: Defendant, in a practice known as “stop hunting,” manipulates the market price of the traded currency, including printing bogus “flash trades” which move the “market” to trigger the customer’s stop order for a given trade, essentially closing the customer out of that trade;

d. Arbitrary Margin Rules: Defendant arbitrarily changes the margin rules on Fridays for an ensuing week without any notice to the customer, which results in the customer’s being deprived of any trading advantages or leverage opportunities they may have, and again causing the customer’s account to be closed out in favor of Defendant;

e. Abuse of “Slippage”: Defendant, in a practice known as “slipping a trade,” takes advantage of “slippage” in a given trade. “Slippage” is the change in price between the time when a price is quoted and a market order is placed. It is customarily caused by market movement while the trade is being executed. The incidence of “slippage” should roughly be equal in favor of the customer and the broker. Defying all laws of probability, in almost every case, Defendant’s customers suffer losses as a result of “slippage” at grossly greater percentages than Defendant does, which can only be explained by Defendant’s manipulation of pricing; and

“Slow Fill” and “No Fill” Commands: Defendant often fails to execute valid and profitable trade orders entered by the customer and instead causes the trading system to generate a “slow fill” or “no fill” message to the customer as the customer attempts to close out a profitable trade, preventing the customer from making a profit while generating illicit profits for Defendant.

Note i never actually traded with them i had a $50 account but closed after rash of lawsuits. a few years back but im amazed how many people still open accounts with them simply google FXCM fraud and read away on thousands of websites.

2011-10-13 I highly recommend this broker

Sure they are being sued by at least 200 clients

And sure the CTFC has found them guilty on 10 different occassion for scamming customers

http://online.wsj.com/article/BT-CO-20111003-712195.html

But if FPA wont mention any of there lawsuits and charges by the CTFC i see no reson no to do business with them

FXCM just settles a $15 million dollar fraud lawsuit so u know they have money

http://online.wsj.com/article/BT-CO-20111003-712195.html

Review Moderation Team Note: Obviously, Karon again failed to notice that the FPA sent a mailing to all members pointing to this article in the forums...

Forex Capital Markets LLC Ordered to Pay More Than $14.2 Million to Settle CFTC Charges

We also added a link to that article to Karon's review left on 2011-10-03. We don't understand why Karon thinks the FPA is trying to conceal information that the FPA brought to the attention of all its members.

2011-10-03 These Criminals were just fined 14 million from the nfa and ctfc for fraud and manipulation of forex prices in their favor and yet somehow FPA has not labeled them a fraud company yet

http://online.wsj.com/article/BT-CO-20111003-714007.html

Review Moderation Team Note: You can see a forums discussion about that subject by clicking here.

For New novice please check with NFA website before open an account with them.
They have 5 cases against them.Very Bad

http://www.nfa.futures.org/BasicNet/Case.aspx?entityid=0308179&case=04-80132&contrib=CFTC

Today I sent the following letter to FXCM's Compliance Department:

"Dear Sirs,

I am hereby asking you to look into the following problem:

On Feb 2, 2008, I opened a short AUD/USD position:

ticket 11943187, AUD/USD, 10K, 2/7/08 8:41 AM at 0.88940

which was closed by FXCM without my knowledge or any action on my part on 7/29/08 at 8:56 PM at 0.95000 with a loss of -$606.000 WHEN THE MARKET WAS MOVING IN THAT POSITION

@Camille in Qatar:

A margin call may occur even when an account is fully "hedged" due to either diminishing margin, rollover costs, or exchange rate fluctuations (pip costs). 1) Usable Margin may diminish if the spreads widen since this would decrease the profit and/or increase the loss on the hedged positions. 2) Rollover costs will eat into usable margin since the rollover you earn will not necessarily be equal to the rollover amount being paid. 3) Pip cost fluctuations. If the pip value has to be converted back into the denomination of your account, then the pip value can fluctuate as the exchange rate itself fluctuates. If trading a USD denominated account, then AUD/USD would not be impacted since the profit/loss on each pip is already in USD. However, for a currency pair such as USD/JPY the profit/loss for each pip is in JPY and has to be converted back into USD at the current USD/JPY exchange rate.

Regarding margin calls...Although the margin call feature is designed to close positions when account equity falls below the margin requirements, there may be instances when liquidity does not exist at the exact margin call rate. As a result, account equity can fall below margin requirements at the time orders are filled, even to the point where equity account becomes negative. This is especially true during market gaps or volatile periods. FXCM will not hold traders responsible for deficit balances in this scenario, but clients should be cognizant that all funds on deposit in an account are subject to loss.

Please do not hesitate to contact me directly (jrogers@fxcm.com) if you have additional questions.

Kind Regards,

Jason Rogers

FXCM hit with largest ever fine: $2 million

I'm surprised this type of lawsuit didn't happen years ago. I posted info in this group a while back about Virtual Dealer which is the Metatrader software plugin brokers use to stop hunt, manipulate pricing, disconnect, etc (Google it)... What's sad is this software is not some proprietary one-off software created by one individual broker, it's an actual plug-in that is marketed and sold specifially to brokers for the purpose of cheating customers. That's a smoking gun if I've ever seen it!

Any broker using this software should be subject to the same lawsuit that FXCM is going through, which is most likely most dealing desk brokers. Nice to see someone finally fighting back. Hopefully with more lawsuits like this, it will eventually level the playing field for those using dealing desk brokers...

The Plaintiff, William H. Sanders, claims to have lost over $150,000 to FXCM over the years due. Two main topics the lawsuit deals with is the Demo accounts which serve to attract clients while not simulating real market conditions and when clients do switch to live they receive completely different execution and the execution itself where it is claimed that FXCM is in fact a market maker which actively goes after profitable clients. The main excerpts are below:
Plaintiff, William H. Sanders, just like thousands of other customers, was lured into transacting business with Defendant, FXCM, buying and selling foreign currencies in what is known as the foreign exchange (“Forex”) market, but little did Sanders, or any of the others, know that FXCM intended to, and did, systematically bilk them out of their account money through an elaborate scheme of fraudulent tricks, devices, and artifices. What was represented to Sanders and others as a foreign currency trading platform developed upon professed principles of “fairness, honesty, and integrity,” which was supposedly rooted in providing customers with a true market trading experience, totally devoid of dealer intervention and market manipulation, was in truth a platform predicated upon deceit and trickery that systematically looted the accounts of customers who, like Sanders, placed their trust in FXCM.
The scheme deployed by FXCM was complex and varied, utilizing aggressive and pervasive marketing and advertising campaigns, including television, internet, seminars, webinars, and other media, portraying FXCM as a foreign currency trading platform where investors could trade foreign currencies in a true market environment. The advertisements were specifically targeted to convey a sense of trust and transparency to potential FXCM customers and to gain the customers’ confidence in FXCM’s trading platform. To further bolster customers’ confidence in its platform, FXCM enticed customers to use FXCM’s practice or demo account (hereinafter, the “Demo Account”) to simulate an FXCM trading experience. But the Demo Account, just like the myriad advertisements, misled customers about the true nature, functionality, and performance of the platform. Once lured into opening an account, customers were subjected to a staggering array of stratagems and ploys, some using extremely sophisticated computer software based upon complex algorithms and high-speed computers, to deceive the customers into believing that their trading was being affected by normal market forces, while in reality FXCM traded against its own customers.
And the so-called “Demo Account” – which was held out by FXCM as the sine qua non to persuade prospective customers to trade with FXCM – was the most cunning and crippling canard of all. By trading through the “Demo Account” without being at financial risk, the customer was allowed to experience direct market pricing, free from FXCM dealer interference or manipulation. The switch pulled by FXCM on how trading occurs once the customer opens a “live” account and starts trading with real money, is nothing short of a modern-day equivalent of the classic street con game known as “Three-card Monte.” Once “live” trading began, direct market pricing was replaced by profound dealer interference and trade manipulation.
To further its fraudulent practices, FXCM associated with software developers and programmers to create and deploy one of the most sinister software applications ever imagined, the central component of which included a back-end administrative console that provided FXCM an arsenal of system commands to facilitate FXCM’s fraud on customers. For example, through this console, FXCM can prevent the customer from closing out a profitable trade; hold up a trade so that FXCM can pirate the profit by trading against the customer; or manipulate the price of the market by utilizing “flash” trades to artificially move a market to close out a customer’s “stop order.” FXCM deployed these technological tricks to separate customers, like Sanders, from their money.
Defendant further deceives customers by failing to disclose its dishonest practices in its disclaimers contained in Defendant’s customer agreements. Buried in the fine print of Defendant’s lengthy, misleading, contradictory, and largely incoherent computer-generated customer agreement, Defendant purports to innocuously “disclose” and “disclaim” to the customer that, at times, the Defendant may act as a “principal” in transactions, which may result in the customer’s not getting the “best price” on certain trades. In fact, Defendant does not act as a “principal” in a “market” at all; rather, the Defendant acts as a well-armed and unscrupulous adversary to its customer, with superior knowledge, a technological advantage, one which ignores its own Code of Conduct, and which intentionally defrauds unwitting customers.
Defendant has worked with software companies and individual software programmers to modify its back-end systems and middleware to enable it to engage in the dishonest trading practices described below. Defendant has modified its trading platform so that many of these dishonest trading practices are applied to a customer’s account by automated computerized algorithms. Through this association, Defendant has also modified its trading platform to include a sophisticated back-end administrative console which provides Defendant and its employees a series of system commands designed, each accessible through a drop down menu, to execute many of the dishonest trading practices described below. All of these software modifications have been implemented by Defendant to prevent customers from making money and to cause customers to lose money to Defendant.
Defendant’s dishonest trading practices include, but are not limited to, the following:
a. Slow Server Command: When a customer is engaged in profitable trading activity, Defendant routes the customer’s account to a “slow server,” causing trade execution to be slowed down, and allowing Defendant the time to hijack any potential profit in the trade by buying and selling in-between the customer’s order and the real market, with Defendant’s taking any profit and leaving the customer victimized with no money for his or her effort;
b. False “Error” Messages: Defendant uses its administrative back-end software to prevent the customer from closing out a profitable trade and instead causes the trading system to generate any one of a series of “error” messages to the customer, blocking the customer’s efforts to finalize what would have been a profitable order;
c. Flash Trades: Defendant, in a practice known as “stop hunting,” manipulates the market price of the traded currency, including printing bogus “flash trades” which move the “market” to trigger the customer’s stop order for a given trade, essentially closing the customer out of that trade;
d. Arbitrary Margin Rules: Defendant arbitrarily changes the margin rules on Fridays for an ensuing week without any notice to the customer, which results in the customer’s being deprived of any trading advantages or leverage opportunities they may have, and again causing the customer’s account to be closed out in favor of Defendant;
e. Abuse of “Slippage”: Defendant, in a practice known as “slipping a trade,” takes advantage of “slippage” in a given trade. “Slippage” is the change in price between the time when a price is quoted and a market order is placed. It is customarily caused by market movement while the trade is being executed. The incidence of “slippage” should roughly be equal in favor of the customer and the broker. Defying all laws of probability, in almost every case, Defendant’s customers suffer losses as a result of “slippage” at grossly greater percentages than Defendant does, which can only be explained by Defendant’s manipulation of pricing; and
“Slow Fill” and “No Fill” Commands: Defendant often fails to execute valid and profitable trade orders entered by the customer and instead causes the trading system to generate a “slow fill” or “no fill” message to the customer as the customer attempts to close out a profitable trade, preventing the customer from making a profit while generating illicit profits for Defendant.

Can anyone comment on resent events that FXCM is in financial difficulty ?

I have been lead to believe that they have recently had bankruptcy proceeding filed against them for the non return of traded funds. This is understood to be due to criminal misappropriation of client accounts for purposes other than trading.

Any further comments on this matter would be appreciated.

I think FXCM are into fraudlent practices, today 80CT 2008 , the rollover rate for EUR/USD as on 11 am EST was Roll S 0 and Roll B -20.00.
and to my utter dismay and shock when i checked aroun 2 pm the rollover rates were Roll S -4.00 and Roll B -32.00.
I have a miniaccount btw.

Can any of you confirm this sudden change of rollover rates in matter of 2-3 hrs, I sense fxcm is playin with our money charging this over the sky rollover rates.And everytime i ask them, they give me stupid explanation . I want to lodge a complain, whom should i approach??