FXCM Review

FXCM has won awards for the comprehensiveness and ease of use of its trading education , notably an award won in April 2012 recognizing FXCM the broker with the best Online Education Materials, which includes a unique set of materials, that help the novice and more experienced trader learn in a number of ways. They are:

• Free Forex Trading Guide: If you new to Forex trading then FXCM’s “New to Forex” guide is an excellent start to learn the basics of Forex trading.
• Trading Signals & Alerts: These are recommendations to buy and sell trade setups to help you place and manage trades from start to finish.
• Active Trader: This is FXCM’s own elite pricing tool & support
• Live Events: FXCM offers platform walkthroughs for new Forex traders as well as advanced strategies and techniques.
• DailyFX: An online paid service, which offers trading signals, education and a trading course in addition to introductory and advanced trading concepts which are covered via video lessons and live trading sessions.

FXCM implemented standards of customer support which you’d expect from a broker of their size; availability of advice during times at which trading is taking place, telephone and email support in a variety of languages, professional and knowledgeable staff. Response times to queries was recorded and answers were received within 1 – 2 hours. The Live Chat facility was almost instant and very professional.

In our honest opinion, no matter what media channels say or publicize, FXCM should always be respected due their size and transparency of their customer service, needless to mention regulatory authorities they are complied with. Unfortunately brokers of the size of FXCM come in for close scrutiny, and if the broker was good, he will certainly be fined, otherwise the broker will be forced to close down, or else indicate that the Authority investigating them is no good, for the obvious reason of launching an investigation against an entity for no reason other than rumors and gossip.

The outcome following the success of FXCM was a number of damaging lawsuits in the US which forced the company to become more transparent in its dealings with clients. Whilst the company is still saddled with the gossip and reputation from those lawsuits, they appear to have tried to clean up their act. That proves FXCM‘s capabilities from a financial point of view, as well as their seriousness regarding their business and it’s relationships. Most importantly though, FXCM‘s attempt to clean up their reputation perhaps proves that the slips were unintentional. From the legal point of view, of course, who is better than the biggest and most successful broker to lay rules and regulations upon. FXCM was a victim of the rapid natural development of any organization.

The bad news for FXCM was not only the “Self-Regulating” NFA; even the UK’s Financial Conduct Authority slated FXCM for being less than transparent during the investigation that took place in spring this year. Many traders have pointed out, that they can’t they trust a company that got investigated because of things they stated or guaranteed and their promises are still the same. What we can reply with is if the broker is investigated, fined and still making the same statements, then it should mean that the broker has complied with the regulatory body’s demands, as well as proving strength and compliance up to the authority’s satisfaction.

As for awards won, FXCM received quite a number of them, some of those awards, although true, are a little superficial such as ‘World’s Biggest Forex Broker‘. However, there are recent and ongoing issues with FXCM which are making traders loth trusting them and the statements they make.

FXCM‘s main registration for regulation is with the self-regulating National Futures Association- known as the (NFA). In the UK, they are regulated by the Financial Conduct Authority which has spared no efforts in bringing FXCM to account over their misconducts. That said, they have promised restitution to customers who have been mis-priced in their live trading. Their financial accounts are said to prove that they keep their clients and company funds separate, meaning that clients don’t fund the company’s exposure in the market.

FXCM developed their own in-house trading platform, the “Trading Station”, which is also available as a ‘White Label’ solution for institutional clients. The “Trading Station” is available in three forms; web, mobile and desktop to suit every possible way you trade. In addition to the “Trading Station”, they also offer third party platforms including the ubiquitous and user friendly MetaTrader4, MirrorTrader, ZuluTrader and NinjaTrader.

There are a handful of statement which everyone in the Forex world memorized over the years, one of those phrases is FXCM’s “No Dealing Desk” or “NDD“. FXCM’s “No Dealing Desk” trading is limited to 12 major pairs and spreads starts from 1.5 pips, which in our opinion invalidates the statement “No Dealing Desk“, since the spread can’t start from a predefined value as it is supposed to be in a real “No Dealing Desk” model.

Margin requirements are relatively high – between 1 and 2% and they offer a maximum of approximately 50:1 leverage on its Forex trading accounts. Leverage is offered up to a maximum of 1:50, Which is again too high.

What’s worth mentioning here is that FXCM created a tool called Smart Margin Watcher which will advise you when your trades come close to their margin, notifying you when you get to a margin call, so you can avoid losing your capital if you were able to top-up your trading account. Sharia compliant accounts are available through their Lebanese office, but this is not promoted on their website, primarily because of FXCM‘s large number of clients who will try to take advantage of a Swap Free condition. However, that said, the account offered from FXCM Lebanon, we believe is through an independent entity running as a white label, which also implement that FXCM in Lebanon is owned and managed by a independent entity.

Clients will find a couple of very useful tools for traders on FXCM‘s website, including access to free or subscription charting tools which can help making the entry and exit points more accurate. The access to watching a live trading room can also be useful if you want to see what the experts are doing and copy them.

FXCM guarantees no re-quotes but they have earned some criticism over slippage, which is something to watch out for since complaints about FXCM is very related to this point. They guarantee no restrictions on setting stop loss or take profit points, and, our favorite, they don’t discourage scalping like other brokers do. They’ll allow you to use Expert Advisers on all their platforms making trading more accurate and helping you to avoid emotional trades.

Spreads vary dependent on the account type. ECN trading has an extremely high spreads compared to any broker, which is starting from 2.5 pips on the EUR/USD pair, and rising even more for other majors.
Funds are acceptable from all major sources including credit cards and bank accounts. The company seems to be a little lax in its crediting policy as bank transfers takes some time to apply to your account.
Withdrawals are operated from an account dashboard called MyFXCM, which is a very useful tool. Bank transfers to the client account are a must and might take more than expected depending on where the client lives.

FXCM depends on their size and the advantage of trading with them over the long term in attracting business, and this might be why the client will not find special deals or trading competitions on FXCM’s website.

FXCM’s offering isn’t particularly exciting but it is a full package. Their help for new clients is excellent, it covers every angle a trader needs to be aware of, which means it’s suitable for all beginners. Their customer service has received good feedback, their Forex trading product is fair, and most importantly, the client will be 100% sure that his money is with a company that is in business intending to stay for the long term. Of course, there’s a concern  that the company’s failure might come as a result of the after effects of the litigation they faced following malpractices over the last few years. This is marring the perceptions of potential clients and until FXCM can fully satisfy them that the issues will not arise again, they are bound to discolor the company’s image.