FXCM Discussion

[Jason Rogers]

Hi, this is Jason Rogers and I'm the FXCM Ambassador to the FX Fisherman forums. I wanted to introduce myself, and create this thread so that you can post FXCM related questions here for discussion. I will be happy to answer any questions or provide discussion where I can be of assistance.

[FXCM-PR Rep]

Notice to FXCM LLC (FXCM U.S.) Traders:
How to use Stops and Limits after July 31

For Immediate Release:
Media Contact: Jaclyn Sales, jsales@fxcm.com

New York―July 6, 2009―FXCM Holdings, has received numerous questions after our first e-mail regarding the new NFA Compliance Rule 2-43(b). Please note that you will be able to use entry orders to place stops and limits after July 31, 2009. Entry orders provide the ability to realize profits and cut losses.
Using entry orders for stop-loss and limits after July 31, 2009:
For Buy Positions: Placing an entry order to sell below the price where you got into the position protects you from additional losses. Placing an entry order to sell above the price where you got in locks in profits.
For example, if you have a BUY EUR/USD position at 1.3900, you could place:
a stop-loss using a sell entry order (Stop Entry, SE) at 1.3800
or
a limit using a sell entry order (Limit Entry, LE) at 1.4000.
For Sell Positions: Placing an entry order to buy above the price where you got in protects you from additional losses. Placing an entry order to buy below the price where you got in locks in profits.
For example, if you have a SELL EUR/USD position at 1.3900, you could place:
a stop-loss using a buy entry order (Stop Entry, SE) at 1.4000
or
a limit using a buy entry order (Limit Entry, LE) at 1.3800.
The National Futures Association (NFA), our industry's self regulatory organization in the United States, has informed all Forex Dealer Members, which includes FXCM, that it has adopted new Compliance Rule 2-43(b) regarding forex trading. Read Compliance Rule 2-43(b) National Futures Association | News Center
This rule requires orders be executed First In, First Out (FIFO). FIFO requires that when multiple positions are held in the same currency pair, the position which was first opened will be the first to be closed. This will prevent stop-loss and limit orders from being placed on individual tickets (orders and positions).
FXCM has always encouraged active risk management through the use of stop-loss and limit orders. The stop and limit orders that have been available through the “Open Positions” window are two entry orders that are linked to an individual open position. If a stop or limit order is triggered, the other is canceled. The FIFO rule prevents stops and limits from being attached to an individual ticket.
FXCM is introducing a new feature called OCO (One Cancels the Other) entry orders, which will provide traders with the same functionality as they have been accustomed, except that they are not linked to any positions. Watch This Video Presentation To See How To Manage Your Risk Using OCO Entry Orders: https://admin.acrobat.com/_a205571165/p91063619/
For additional information, please visit the "NFA FIFO (First in, First Out) Rules" forum on DailyFX. We will be holding live question and answer sessions within the DailyFX forum. NFA FIFO (First in First Out) Rules - DailyFX Forum
Do I have to change my current platform?
While FXCM acknowledges the NFA's concern and obligation to protect clients, FXCM would like to extend an option to those who would like to continue using the current platform functionality. Traders can transfer their accounts to Forex Capital Markets Ltd. (FXCM UK) and continue to place stop-loss and limit orders and maintain the ability to modify and close orders from the "Open Positions" window.
If you wish to maintain your current platform functionality, you can trade through FXCM UK, which is regulated by the Financial Services Authority (FSA) in the United Kingdom.
If you wish to transfer your account to FXCM UK, please complete the one page form:
Standard 10k Account Transfer Form: http://www.fxcm.com/std10k-transfer-form.jsp
Forex System Selector Account Transfer Form: http://www.fxcm.com/fss-hedging-transfer-form.jsp
Micro Account Transfer Form: </title> <meta name="keywords" content=""> <meta name="description" content=""> <link href="/fxcm_style.css" rel="stylesheet" type="text/css" /> <link href="/nav.css" rel="stylesheet" type="text/css" /> <script type="text/javascript" language="JavaSc
MetaTrader 4 Account Transfer Form: http://www.fxcm.com/mt4-hedging-transfer-form.jsp
Deadline to Complete Transfer Form: JULY 21, 2009
Top FXCM UK Frequently Asked Questions:
More FAQs are available on the DailyFX forums: NFA FIFO (First in First Out) Rules - DailyFX Forum
Q: If I switch my account to FXCM UK what protection is available?
A: The FSA is the regulatory body that oversees spot FX trading in the United Kingdom. The market has been regulated in the UK much longer then it has been in the U.S. Accounts with FXCM UK are segregated in accordance with FSA client money rules. The financial services authority, one of the world's most respected financial regulatory bodies, regulates FXCM UK.
Q: How may I deposit funds to my account if it is housed with FXCM UK?
A: FXCM UK provides for bank wire, debit card, credit card, and check deposits and withdrawals. Please note there are different Web site links and funding details associated with accounts at FXCM UK. Visit FXCM - Depositing Funds Options for full details. Please also note clients have the option to hold their accounts in GBP, EUR, USD, JPY, CAD, and NZD. U.S. clients may send domestic wire deposits. FXCM - Depositing Funds Options
Q: Will I be able to place stop-loss and limit orders on individual positions after I transfer to FXCM UK?
A: Yes. All FXCM UK accounts will allow clients to place stops and limits as well as close positions from the "Open Positions" window.
Q: Will hedging be enabled on my account after it is transferred to FXCM UK?
A: Yes. All FXCM UK accounts default to have hedging enabled. That is to say that buy and sell positions will no longer offset each other. Buy and sell positions can now be held on the same account. Clients who wish to have hedging disabled can elect to turn the function off via MyFXCM. https://www.myfxcm.com
Q: Will OCO entry orders be enabled on my account after it is transferred to FXCM UK?
A: Yes. However, if the account does not have hedging enabled the OCO orders executed in the opposing direction of open positions will effectively offset those positions. Conversely, a market order to buy 100K GBP/USD will NOT be offset by an entry order to sell if the account has hedging enabled.

If you have any questions about the new regulations, or their effect on your risk management, please don’t hesitate to contact us at 1-888-503-6739, or e-mail us at info@fxcm.com.
FXCM Holdings LLC Facts
As of January 2009
• FXCM Holdings LLC has over $100 million in capital
• More than 125,000 live accounts are traded on FXCM trading platforms
• An average of $500 billion in notional volume is traded each month on FXCM trading platforms
• In excess of $500 million in customer funds trading on platforms offered by FXCM
Trading FX on margin carries a high level of risk, and may not be suitable for all investors.

[oilfxpro]

Hi Jason

I was considering opening an account with FXCM. I decided not to open account after reading rewiews from traders who have traded at FXCM.I can tell from honest posters/traders and competitors of FXCM.

I have used the Boston technologies metatrader bridge you provide.Unfortunately it gives too much slippage on pending limit orders.The reason for slippage is a) trader places limit orders on your platform(no orders are placed by fxcm in market) b)when price reaches order levels IN FAST MOVING MARKETS ,the bridge places orders at market , hence slippage

Proof

Fxcm - Page 17 - Forex Trading

The second major problem is stops are not placed in the market , hence slippages.They are only placed on broker's books and own liquidity casino.
If market moves very fast , placing stop/CLOSING orders at market in fast moving markets causes slippages

Exactly what I feared about the Boston technologies bridge is happening on live accounts ..see proof link

Until your own methods methods are improved , I would not be able to sleep with my account at FXCM

OILFXPRO

[Jason Rogers]

Originally Posted by oilfxpro

Hi Jason

I was considering opening an account with FXCM. I decided not to open account after reading rewiews from traders who have traded at FXCM.I can tell from honest posters/traders and competitors of FXCM.

I have used the Boston technologies metatrader bridge you provide.Unfortunately it gives too much slippage on pending limit orders.The reason for slippage is a) trader places limit orders on your platform(no orders are placed by fxcm in market) b)when price reaches order levels IN FAST MOVING MARKETS ,the bridge places orders at market , hence slippage

Proof

Fxcm - Page 17 - Forex Trading

The second major problem is stops are not placed in the market , hence slippages.They are only placed on broker's books and own liquidity casino.
If market moves very fast , placing stop/CLOSING orders at market in fast moving markets causes slippages

Exactly what I feared about the Boston technologies bridge is happening on live accounts ..see proof link

Until your own methods methods are improved , I would not be able to sleep with my account at FXCM

OILFXPRO

Hi OILFXPRO,

Thank you for your post and please read the reply I posted earlier today in regards to the post you referenced Fxcm - Page 18 - Forex Trading

FXCM's metatrader 4 platform is completely no dealing desk execution. The orders that you are placing, whether they be market, stop, limit, entry, are executed back to back with a global bank or financial institution. FXCM does not make a market on the Metatrader 4 platform.

Please be aware of the role of the Boston Technologies bridge. It is is the communication link which links the Metatrader platform with FXCM's no dealing desk execution. Since MT4 is a third party program, there has to be this technology bridge letting FXCM's execution system know what operations the Metatrader program wants to perform.

No dealing desk execution means that FXCM is not taking the other side of your trade, therefore not profiting when you lose and not losing when you profit. This is much different than traditional MT4 brokers that execute through a dealing desk, and removes that conflict of interest. Neither are there any requotes or restrictions on trading strategies such as scalping. FXCM is making money based on the amount of volume going through our system which is why our rewards program for tighter spreads is in place to reward high volume traders.

As a part of trading with dealing desk execution, there can be slippage. Slippage is not something unique to the forex market. By definition, a stop order is an at best market order to be filled at the best price available. It can occur in both equities and futures. There are 9 banks providing pricing on the platform so our aim is to minimize slippage but it can occur.

-Jason

[oilfxpro]

Originally Posted by Jason Rogers

Hi OILFXPRO,


As a part of trading with dealing desk execution, there can be slippage. Slippage is not something unique to the forex market. By definition, a stop order is an at best market order to be filled at the best price available. It can occur in both equities and futures. There are 9 banks providing pricing on the platform so our aim is to minimize slippage but it can occur.

-Jason

Jason

Stop orders can have slippage , they can also have slippage 50 % in favour of client and 50 % again client,That would be fair to the client , not 80 % against client.

A client's interest are more important than the brokers . Most retail brokerage clients cost $250 to set up an account.If broker looks after client's interests , clients will daily pay broker commissions of $20 on per round turn lot,several times a day he will give $20 .Some clients are worth $50,000 per annum in commissions and more on swaps, yet brokers are often too greedy to look after client's interests.

What do brokers get when clients close accounts and leave? NOTHING and broker loses.CUSTOMER IS KING , BROKER IS SERVANT.

I will test your live account and post here

OILFXPRO

[Jason Rogers]

Originally Posted by oilfxpro

Jason

Stop orders can have slippage , they can also have slippage 50 % in favour of client and 50 % again client,That would be fair to the client , not 80 % against client.

A client's interest are more important than the brokers . Most retail brokerage clients cost $250 to set up an account.If broker looks after client's interests , clients will daily pay broker commissions of $20 on per round turn lot,several times a day he will give $20 .Some clients are worth $50,000 per annum in commissions and more on swaps, yet brokers are often too greedy to look after client's interests.

What do brokers get when clients close accounts and leave? NOTHING and broker loses.CUSTOMER IS KING , BROKER IS SERVANT.

I will test your live account and post here

OILFXPRO

hi OILFXPRO,

I agree, and FXCM's interests are in line with our clients since we are making money off of transaction volume on no dealing desk execution and not by trading against clients. There is a much greater likelihood that a trader will trade a higher amount of volume and over a longer period of time if the trader is profitable. That is why we have additional programs to help our traders such as education, research, trading signals, active trader rewards, programming services, systems desk consulting, gold program benefits, etc.

I think the misunderstanding is in thinking that FXCM has something to gain by a trader getting slipped, which is not the case. FXCM makes the same amount on the transaction volume whether you are filled at the exact price you request or not. Slippage is determined by prices and liquidity available from the banks, not by FXCM.

I do appreciate your independent testing of a live account.

Jason

[oilfxpro]

Originally Posted by Jason Rogers

Hi OILFXPRO,

T
Please be aware of the role of the Boston Technologies bridge. It is is the communication link which links the Metatrader platform with FXCM's no dealing desk execution. Since MT4 is a third party program, there has to be this technology bridge letting FXCM's execution system know what operations the Metatrader program wants to perform.


-Jason

Jason

I spoke to a FXCM rep and he advised there would be a lot of slippages with metatrader at FXCM.This is simply because THE BOSTON TECHNOLOGIES bridge does not repect the strict limit orders , but places them at market ,and slippages occur almost on every order.


One customer experienced 80 to 85% slippages .

OILFXPRO

[Jason Rogers]

Originally Posted by oilfxpro

Jason

I spoke to a FXCM rep and he advised there would be a lot of slippages with metatrader at FXCM.This is simply because THE BOSTON TECHNOLOGIES bridge does not repect the strict limit orders , but places them at market ,and slippages occur almost on every order.


One customer experienced 80 to 85% slippages .

OILFXPRO

OILFXPRO,

All orders on the MT4 platform powered by Boston Technologies are sent through as At Best market orders. Every order will be executed since it is at best, but slippage can occur. If you are placing large orders on illiquid pairs or during news events then slippage would be more likely to occur. Saying slippage occurs on almost every order is a very generalized claim to be making. If you would like to private message me with details of your account I would happy to review and address this. But let's review actual trades.

Jason

[oilfxpro]

Originally Posted by Jason Rogers

Hi OILFXPRO,



FXCM's metatrader 4 platform is completely no dealing desk execution. The orders that you are placing, whether they be market, stop, limit, entry, are executed back to back with a global bank or financial institution. FXCM does not make a market on the Metatrader 4 platform.

Please be aware of the role of the Boston Technologies bridge. It is is the communication link which links the Metatrader platform with FXCM's no dealing desk execution.
-Jason

The virtual dealer plugin could doing the job of the dealing desk, before there humans on dealing desk , now there are other customised plug ins ie CUSTOMISED software to replace dealing desk

It does not change the situation dealing desk or no dealing desk.

Show us some proof that no dealer plug ins are used on live accounts.

OILFXPRO

[Jason Rogers]

Originally Posted by oilfxpro

The virtual dealer plugin could doing the job of the dealing desk, before there humans on dealing desk , now there are other customised plug ins ie CUSTOMISED software to replace dealing desk

It does not change the situation dealing desk or no dealing desk.

Show us some proof that no dealer plug ins are used on live accounts.

OILFXPRO

The virtual dealer plugin was designed by metaquotes for a broker that uses dealing desk execution. MT4 has traditionally been a dealing desk platform so it's not surprising that a dealing desk may want this type of plugin since they could profit off of trader losses.

FXCM's MT4 uses no dealing desk and does not use a virtual dealing desk plugin. It doesn't make sense to use it and is incompatible with our no dealing desk system since orders are routed to the banks. Whether your trade executes right now or 5 seconds from now, FXCM makes the same amount. Whether your trade executes at the current price or is slipped 5 pips, FXCM makes the same amount.

Having traded myself, I would also find it concerning if my broker was using the plugin. In the end there is less conflict of interest when using no dealing desk execution and it puts our interests in line with our traders.

Jason