FXCM?

Mar 24, 2015 at 03:38
1,157 Views
12 Replies
Member Since Jan 22, 2014   49 posts
Mar 24, 2015 at 03:38
Hi, I want to know if FXCM is safe to deposit and withdraw without problems today, after lower their actions.😞
Simple
Member Since Nov 14, 2014   46 posts
Mar 24, 2015 at 07:49
What do you mean by 'after lower their actions'?
Forex is about the journey not the destination...
Member Since Jan 24, 2015   3 posts
Mar 24, 2015 at 14:50
They are good ECN/STP brokers. They hide stops and order entries from bankers.
Member Since Aug 12, 2009   272 posts
Mar 24, 2015 at 17:57
Wivilson posted:
Hi, I want to know if FXCM is safe to deposit and withdraw without problems today, after lower their actions.😞

Hi Wivilson,

FXCM clients can deposit, withdraw, and trade as usual. FXCM is one of the few brokers to show you actual retail FX trading volume, and as you can see from EUR/USD, which is one of the most popular currency pairs, our clients EUR/USD trading volumes have hit the highest levels since 2012:



While our clients did experience losses due to the January 15 event, the $300 million financing FXCM received strengthened our balance sheet and gives us the opportunity to grow our core business.

Let me know if you have any questions.

Jason
Member Since Mar 16, 2015   2 posts
Apr 07, 2015 at 06:25
They arent a ecn broker.
Member Since Sep 06, 2013   137 posts
Apr 07, 2015 at 08:57
They are fine, but best suited to day traders, or long term traders, not scalpers - they experience higher slippage than most other live account brokers i have tried when things get volatile.

B
HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
Member Since Aug 12, 2009   272 posts
Apr 08, 2015 at 19:09
3xfx posted:
They arent a ecn broker.

FXCM offers traders No Dealing Desk (NDD) forex execution. That means we offset each of your orders one-for-one with the best available prices from competing liquidity providers: https://www.myfxbook.com/forex-broker-spreads

Since we don't take the market risk on the other side of your trades, we don't profit from your losses or lose from your profits. Instead, we make our money from your trading volume. Therefore, we want you to be profitable so you will continue trading with us.
Member Since Aug 12, 2009   272 posts
Apr 08, 2015 at 19:20 (edited Apr 08, 2015 at 19:23)
BenNathanFTA posted:
They are fine, but best suited to day traders, or long term traders, not scalpers - they experience higher slippage than most other live account brokers i have tried when things get volatile.

B

Hi Ben,

With FXCM, slippage can be either positive or negative.

It's important to note that to this day, some brokers may still not provide positive slippage to their clients, while others may provide positive slippage on some order types, but don't provide it on other order types. Still other brokers will re-quote their clients when the price moves in their clients' favor but fail to re-quote when the price moves against them.

By contrast, there are no re-quotes at FXCM, and our clients receive the full benefits of any positive slippage that's available. A one-year study of over 83 million orders executed through FXCM between September 1, 2013 and August 31, 2014 revealed the following:

- 76.2% of all orders had NO SLIPPAGE.
- 13.5% of all orders received positive slippage
- 10.2% of all orders received negative slippage
- More than 58% of all limit and limit entry orders received positive slippage
- 52% of all stop and stop entry orders received negative slippage.

Over the course of those twelve months, FXCM clients benefited from over $21 million in price improvements: https://bit.ly/P6lUzX

Notice how positive slippage is more common with limit orders, while negative slippage is more common with stop orders. That's due to the momentum of price movement when such order types are triggered. It's also worth noting that the Market Range feature on our Trading Station platform and the Enhanced* Maximum Deviation feature on our MT4 platform allow FXCM clients to limit the amount of negative slippage they receive, while still enjoying the full benefits of any positive slippage that's available.

* On the MT4 platforms of some other brokers, the Max Dev feature is unavailable, or if it is available, then it will limit both your negative slippage and your positive slippage equally. By contrast, FXCM enhanced how Max Dev works on our MT4 platform allowing you to limit your negative slippage while still enjoying the full benefits of any positive slippage.
nushakov
forex_trader_174049
Member Since Jan 28, 2014   9 posts
Apr 09, 2015 at 06:34
If you guys are NDD broker, how it happened that you experienced such huge losses due to Jan 15 ? As I guess it was possible if you played against your clients - their gain is your loss.
Member Since Aug 12, 2009   272 posts
Apr 09, 2015 at 23:10 (edited Apr 09, 2015 at 23:11)
nushakov posted:
If you guys are NDD broker, how it happened that you experienced such huge losses due to Jan 15 ? As I guess it was possible if you played against your clients - their gain is your loss.

Hi Nushakov,

Our clients, like most retail traders elsewhere, were net long EUR/CHF on January 15th. That means they lost money due to the SNB's surprise announcement which caused EUR/CHF drop 40% in seconds. If we traded against our clients like you suggest, then we would have made money from those losses, but we didn't.

If there were any doubts before, it should be pretty clear now that FXCM does not benefit when clients lose on our No Dealing Desk (NDD) forex execution. That's because we offset each of your orders one-for-one with the best prices from competing liquidity providers. That means we don't profit from your losses, or lose from your profits. Instead, we make money from your trading volume.

By contrast, when you trade with a dealing desk broker or maker maker, at the most basic level, when you lose, they win. Some of these market makers are now announcing record profits as a result of their clients' losses after the SNB event. If the market would have moved in favor of these traders, then we may have been looking at a much different scenario.

For this reason, FXCM believes that NDD remains the fairest pricing model for forex traders, because it eliminates the conflict of interest that is present when you trade with a dealing desk broker. We don't hunt stops, because we have nothing to gain from you losing on a trade. In fact, we want you to be profitable so you can continue trading with us.

The caveat of our no dealing-desk execution system is that traders are offset one for one with a liquidity provider. When a client entered a EUR/CHF trade with FXCM, FXCM Inc. had an identical trade with our liquidity providers. During the historic move, liquidity became extremely scarce and shallow, which affected execution prices. This liquidity issue resulted in some clients having a negative balance.

While clients could not cover their margin call with us we still had to cover the same margin call with our banks. When a client profits in the trade FXCM gives the profits to the customer, however, when the client is not profitable on that trade FXCM Inc. ends up having to pay the liquidity provider.

FXCM ended with a regulatory capital shortfall. Accordingly, FXCM needed to get a loan to cover this balance, which it did. For anyone that still thinks FXCM is running an FX dealing desk, we have now demonstrated that such is not the case.

Since we are a publicly-traded company (NYSE ticker: FXCM) the details of our finances including the loan from Leucadia are well known. In fact, in our most recent quarterly earnings presentation, we clearly outlined how we plan to repay this debt. By contrast, most other forex brokers are privately-held companies, so it's hard to know how much debt they have on their books or the state of their finances.

Despite the events of January 15th that resulted from the Swiss Franc movements, FXCM today remains in a strong competitive position:

- $303 million in consolidated operating cash
- $1.0 billion in customer equity
- 195,000 active retail FX accounts
- Global regulatory capital of $252 million versus $93 million minimum requirements (an excess of $159 million)

Over the past few years, FXCM has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets. We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital.



In fact, just last week we announced this news: https://ir.fxcm.com/releasedetail.cfm?ReleaseID=903254

The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan. That's our goal. We have now repaid $66 million under the credit agreement, and as of April 1, 2015, the outstanding Leucadia loan balance is $244 million.

FXCM is pleased with how our debt reduction plan is proceeding. We are ahead of plan and the results of the FXCM Japan sale exceeded our expectations. With all the increased attention to our other properties, we are expecting robust and competitive auctions for the other non-core assets we have targeted to sell. We anticipate making an additional repayment of approximately $12 million towards the credit facility in the coming weeks.
Member Since Oct 03, 2014   1 posts
Apr 12, 2015 at 06:58
FXCM, what does your recent announcement mean in practical terms? You state clients are now liable for any losses, as opposed to before when clients were liable up to the funds in their accounts. Does this mean you will pursue clients in the future if a similar event to the recent USDCHF happens?

I quote:

'There are a few changes made to the Agreement. The key change is, based on CFTC Regulation 5.16 no Retail Foreign Exchange Dealer, Futures Commission Merchant or Introducing Broker may in any way represent that it will guarantee against losses. We hope you'll take a moment to see what's new by reading the entire agreement located here, however the key change to highlight is:

Negative Balance Policy - Traders shall at all times be liable to FXCM for any negative balance or debit balance in Trader’s account(s).'
Perdurabo
Member Since Aug 12, 2009   272 posts
Apr 13, 2015 at 17:52 (edited Apr 13, 2015 at 17:53)
necromage posted:
FXCM, what does your recent announcement mean in practical terms? You state clients are now liable for any losses, as opposed to before when clients were liable up to the funds in their accounts. Does this mean you will pursue clients in the future if a similar event to the recent USDCHF happens?

I quote:

'There are a few changes made to the Agreement. The key change is, based on CFTC Regulation 5.16 no Retail Foreign Exchange Dealer, Futures Commission Merchant or Introducing Broker may in any way represent that it will guarantee against losses. We hope you'll take a moment to see what's new by reading the entire agreement located here, however the key change to highlight is:

Negative Balance Policy - Traders shall at all times be liable to FXCM for any negative balance or debit balance in Trader’s account(s).'

Hi Andy,

In the United States, CFTC Regulation 5.16 applies to all US forex trading accounts regardless of the broker. Therefore, no broker may in any way represent that it will guarantee against losses in a US forex trading account. That means, in the future if a similar event to the January 15th SNB announcement happens, US forex traders shall at all times be liable to their broker for any negative balance or debit balance in their accounts. Your forum profile mentions that you live in the US, so this CFTC regulation would apply to you.

For FXCM clients who live outside the US, it's worth noting that both FXCM UK and FXCM Australia (regulated by the FCA and ASIC respectively) offer traders a Negative Balance Policy as follows: Clients subject to the Negative Balance Policy who incur negative balances in excess of US $50,000 (determined by aggregating all of the client's negative balances across all accounts held by FXCM and any of its affiliate(s), incurred over a 24 hour period of time) will be responsible for and owe FXCM the value of the total negative balance above US $50,000, regardless of market conditions. Subject to certain exceptions, FXCM will waive the first US $50,000 of a client's total negative balance (determined by aggregating all of the client's negative balances across all accounts held by the FXCM group, incurred over a 24 hour period of time). This policy will apply to negative balances incurred during all market conditions, including exceptional market movements.

Specific Exceptions: Each client's master trading agreement will detail all of the specific exceptions to the Negative Balance Policy. Some of the key exceptions to this policy include the following: negative balances incurred by legal entities, omnibus relationships, white label relationships, Eligible Contract Participants, Eligible Counterparties and/or Professional Clients (as defined in the client's master trading agreement) and/or negative balances incurred on share CFD positions or products traded on an exchange.
Sign In / Sign Up to comment
You must be connected to Myfxbook in order to leave a comment
*Commercial use and spam will not be tolerated, and may result in account termination.
Tip: Posting an image/youtube url will automatically embed it in your post!
Tip: Type the @ sign to auto complete a username participating in this discussion.