FXCM sets up shop locally

[James Austin]

Boston dont sound very firendly.

 

[Jason Rogers]

Boston dont sound very firendly.

Hi James,

The virtual dealer plugin created by Metaquotes is a legitimate concern for traders trading through a dealing desk which can profit off of trader losses. Traditionally MT4 was built to work with dealing desk execution where increasing slippage or delaying the execution of an order would be to the benefit of the dealing desk. It would be to the benefit of a dealing desk because a traders loss is their profit. As you can see, trading through a dealing desk would pose a large conflict of interest because it is in their best interest for you to lose.

By executing all orders on MT4 through no dealing desk (no requotes from dealers) execution, it takes away this conflict of interest since FXCM is not profiting from a trader losing money. It takes away the incentive to intentionally slip an order or delay execution on a trade.

Boston Technologies works with many brokers and can customize the MT4 setup to include Metaquote's virtual dealer plugin. FXCM's MT4 does not have this plugin and it would not make sense to use it to begin with. Whether a trade is executed at the requested price or experiences slippage, FXCM makes the same amount of revenue. Whether a trade is executed immediately or delayed, FXCM makes the same amount of revenue.

FXCM makes a portion of the spread off of each transaction. Whether the trader eventually profits or loses money doesn't have an impact on our bottom line. Naturally if a trader is profitable, that trader will probably trade for a longer time and in larger amounts. Therefore it is in our best interests for traders to be profitable. That's why we provide free education, research, trading signals, webinars, etc.

So the main point is: Are you trading on a level playing ground? With FXCM's MT4, we have removed that conflict of interest.

 

[James Austin]

Jason,

FXCM may not have a dealing desk, but why do you pretent there isnt one affiliated with FXCM.

Afterall, someone, somewhere, is managing FXCMs prices,
someone, somewhere, is taking on the risk,
someone, somewhere, is collecting traders' loss, . . . .
and that someone, in the end, no matter how you want to frame it, makes more money when the trader loses.

this is a conflict of interest . . . . wouldnt you say!!??

https://www.aussiestockforums.com/forums/showpost.php?p=472164&postcount=807

Hi James,

The virtual dealer plugin created by Metaquotes is a legitimate concern for traders trading through a dealing desk which can profit off of trader losses. Traditionally MT4 was built to work with dealing desk execution where increasing slippage or delaying the execution of an order would be to the benefit of the dealing desk. It would be to the benefit of a dealing desk because a traders loss is their profit. As you can see, trading through a dealing desk would pose a large conflict of interest because it is in their best interest for you to lose.

By executing all orders on MT4 through no dealing desk (no requotes from dealers) execution, it takes away this conflict of interest since FXCM is not profiting from a trader losing money. It takes away the incentive to intentionally slip an order or delay execution on a trade.

Boston Technologies works with many brokers and can customize the MT4 setup to include Metaquote's virtual dealer plugin. FXCM's MT4 does not have this plugin and it would not make sense to use it to begin with. Whether a trade is executed at the requested price or experiences slippage, FXCM makes the same amount of revenue. Whether a trade is executed immediately or delayed, FXCM makes the same amount of revenue.

FXCM makes a portion of the spread off of each transaction. Whether the trader eventually profits or loses money doesn't have an impact on our bottom line. Naturally if a trader is profitable, that trader will probably trade for a longer time and in larger amounts. Therefore it is in our best interests for traders to be profitable. That's why we provide free education, research, trading signals, webinars, etc.

So the main point is: Are you trading on a level playing ground? With FXCM's MT4, we have removed that conflict of interest.

 

[Jason Rogers]

Jason,

FXCM may not have a dealing desk, but why do you pretent there isnt one affiliated with FXCM.

Afterall, someone, somewhere, is making up FXCMs prices,
someone, somewhere, is taking on the risk,
someone, somewhere, is collecting traders' loss, . . . .
and that someone, in the end, no matter how you want to frame it, makes more money when the trader loses.

this is a conflict of interest . . . . wouldnt you say!!??

Yes, there is a market maker providing the pricing and taking on risk BUT there is a big difference between being able to trade anonymously with 10 banks versus trading directly against a single dealing desk which you are beholden to and decides the rules.

When you trade directly against a dealing desk, they decide what prices you can execute trades at, where the market moves, if your order gets requoted, how much slippage occurs, how much spreads widen, or if your order even gets executed at all. You're not on a level playing field when trading against one market maker that controls everything. There's incentive for you to lose. I would think that trading is challenging enough without having to worry about obstacles being thrown in front of you by your broker.

With no dealing desk, there's competition and anonymity amongst 10 banks to take your orders. You see the best bid/ask price streamed through onto the platform so there's no manipulation of where prices are moving by one market maker. There are no re-quotes since the banks can't single out individual traders. The banks see all orders as coming from FXCM. Yes, the banks want to win as well; however, competition means that one entity cannot intentionally manipulate the market against you.

 

[Wysiwyg]

I could have sworn I spotted a post today advertising a competition coming up.
The "reveal your money making EA to us comp." Just joking. Loll.

 

[Jason Rogers]

:

I could have sworn I spotted a post today advertising a competition coming up.
The "reveal your money making EA to us comp." Just joking. Loll.

Hey, that was supposed to be a secret... :

We actually will be sponsoring an EA competition in January. Details forthcoming in December.

 

[FXCM PR]

FXCM Sponsors the CNBC Australia Currency Challenge
Aussie’s trade currencies to win an Alfa Romeo

Sydney Australia -22, September 2009-FXCM Australia Ltd joins with CNBC to bring Australia the CNBC.com Currency Challenge. Beginning officially on October 6th, 2009, contestants can register throughout the duration of the contest to play.

Today begins the practice session that will last until the weekend leading up to October 6th. Contestants can become familiar with the contest platform, practice trading, and create a winning strategy.

In this virtual trading competition of currency trading, competitors will be allocated with 1,000,000 virtual dollars known as “CNBC Bucks” to trade on a platform powered by FXCM, one of the foremost currency trading firms. For ten weeks, traders will compete for the grand prize, an Alfa Romeo. In addition, a weekly prize will be awarded to the trader with the highest percentage of weekly growth in the form of a $1000 AUD live forex trading account with FXCM Australia.

FXCM, the exclusive sponsor of the event and one of the world’s largest forex brokers will provide free forex trading education resources to all contestants, including the option for every registered player to receive a free FX Power Course, FXCM’s premier 8 day online trading course.

SPECIAL CONTEST PROMO
Anyone who opens a live FXCM AU forex trading account with a minimum of $300 AUD within the duration of the contest will have the opportunity to get a $100 AUD bonus deposited into their account

For complete contest rules, and to register for CNBC.com’s Currency Challenge, please visit the CNBC Australian web site

Resources for Contestants:

Forex News: go to DailyFX, FXCM's free news and research site


FXCM Holdings, LLC Facts
As of June 2009
• FXCM Holdings LLC has over $100 million in capital
• More than 150,000 live accounts are traded on platforms offered by FXCM
• An average of $365 billion in notional volume is traded each month on platforms offered by FXCM
• More than $600 million in customer funds trading on platforms offered by FXCM

Trading FX, CFDs and Spread Betting on margin carries a high level of risk, and may not be suitable for all investors.

 

[>Apocalypto<]

FXCM makes a portion of the spread off of each transaction. Whether the trader eventually profits or loses money doesn't have an impact on our bottom line. Naturally if a trader is profitable, that trader will probably trade for a longer time and in larger amounts. Therefore it is in our best interests for traders to be profitable. That's why we provide free education, research, trading signals, webinars, etc.

LOL crap,

so you FXCM hedges 100% of all the trades down to each mini and micro lot?

they profit off your losses, that just depends how much they hedge.

 

[Stormin_Norman]

theyd hedge their exposure after matching trades.

i think australian brokers cant trade against clients. jason; can you confirm this?

 

[Jason Rogers]

LOL crap,

so you FXCM hedges 100% of all the trades down to each mini and micro lot?

they profit off your losses, that just depends how much they hedge.

All orders on no dealing desk execution are hedged back to back with a global bank. The best spreads available to FXCM are streamed to you with a small markup, which is generally one pip or less for major currency pairs.

You can find our execution practices are disclosed in the product disclosure statement here http://www.forextrading.com.au/docs_pdfs/product-disclusore-statement-parts1_2.pdf . See page 9.

For FXCM Micro, the FXCM trading desk manages the risk for micro trades as disclosed on the micro website. Out of the 10 banks that stream us prices only 2 will accept micro lots via no dealing desk execution. Micro lot execution and spreads would suffer if only two banks were executing trades for micro accounts. We are negotiating with the other 8 banks to accept micro lots and anticipate having NDD available on micro accounts eventually.

Micro accounts are currently not offered through FXCM Australia. We have standard 10k, MT4, and Active Trader accounts available. All of which use no dealing desk execution.

 

[Jason Rogers]

theyd hedge their exposure after matching trades.

i think australian brokers cant trade against clients. jason; can you confirm this?

It is possible for Australian brokers to trade against their clients. The product disclosure statement for each broker should detail the execution the method for offsetting trades. I know from reading through some myself that some brokers list themselves as a market maker and not as an agency.

On our NDD execution, each order is hedged individually.

 

[caribean]

If you are on wrong side of market it doesn't really matter who's on the other side of your trade, your own broker, or Joe from down the street, it is the
"funny" games you don't want to see happening, like, phantom orders appearing when you knew you canceled them, spread widening when no other broker's has, price/platform freezing when at the least convenience to you on regular basis, price totally out of range, etc.
In any case, if proven stuff like that happens it should spread like wild fire through forums like this in a relatively small market place here in Australia.

 

[CFD]

Micro accounts are currently not offered through FXCM Australia. We have standard 10k, MT4, and Active Trader accounts available. All of which use no dealing desk execution.

"Quote:
Originally Posted by >Apocalypto< View Post
LOL crap,"

Sorry, what was that Apocalypto, I couldn't hear you !!

 

[>Apocalypto<]

All orders on no dealing desk execution are hedged back to back with a global bank. The best spreads available to FXCM are streamed to you with a small markup, which is generally one pip or less for major currency pairs.

You can find our execution practices are disclosed in the product disclosure statement here http://www.forextrading.com.au/docs_pdfs/product-disclusore-statement-parts1_2.pdf . See page 9.

For FXCM Micro, the FXCM trading desk manages the risk for micro trades as disclosed on the micro website. Out of the 10 banks that stream us prices only 2 will accept micro lots via no dealing desk execution. Micro lot execution and spreads would suffer if only two banks were executing trades for micro accounts. We are negotiating with the other 8 banks to accept micro lots and anticipate having NDD available on micro accounts eventually.

Micro accounts are currently not offered through FXCM Australia. We have standard 10k, MT4, and Active Trader accounts available. All of which use no dealing desk execution.

you're a market maker, you profit from losses and as Norm noted match differences.

STP yeh yeh, fancy marketing for we're different. (if I am wrong please correct me)

one thing I will note, the feed FXCM fire off to ATC is really excellent.

Jason the following is from the FXCM website. I see no difference in you and any other market maker.

DISCLOSURE
THE FOREIGN CURRENCY TRADING YOU ARE ENTERING INTO IS NOT CONDUCTED ON AN EXCHANGE. FXCM IS ACTING AS A COUNTERPARTY IN THESE TRANSACTIONS AND, THEREFORE, ACTS AS THE BUYER WHEN YOU SELL AND THE SELLER WHEN YOU BUY. AS A RESULT, FXCM'S INTERESTS MAY BE IN CONFLICT WITH YOURS. UNLESS OTHERWISE SPECIFIED IN YOUR WRITTEN AGREEMENT OR OTHER WRITTEN DOCUMENTS FXCM ESTABLISHES THE PRICES AT WHICH IT OFFERS TO TRADE WITH YOU. THE PRICES FXCM OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE AND FXCM MAY OFFER DIFFERENT PRICES TO DIFFERENT CUSTOMERS. IF FXCM ELECTS NOT TO COVER ITS OWN TRADING EXPOSURE, THEN YOU SHOULD BE AWARE THAT FXCM MAY MAKE MORE MONEY IF THE MARKET GOES AGAINST YOU. ADDITIONALLY, SINCE FXCM ACTS AS THE BUYER OR SELLER IN THE TRANSACTION, YOU SHOULD CAREFULLY EVALUATE ANY TRADE RECOMMENDATIONS YOU RECEIVE FROM FXCM OR ANY OF FXCM'S REFERRING BROKERS. FXCM ITSELF DOES NOT PROVIDE INDIVIDUALIZED CLIENT TRADE RECOMMENDATIONS.

Cheers

 

[>Apocalypto<]

"Quote:
Originally Posted by >Apocalypto< View Post
LOL crap,"

Sorry, what was that Apocalypto, I couldn't hear you !!

cant hear me?

read a few posts above then

 

[Wysiwyg]

you're a market maker, you profit from losses and as Norm noted match differences.

STP yeh yeh, fancy marketing for we're different. (if I am wrong please correct me)

one thing I will note, the feed FXCM fire off to ATC is really excellent.

Apoc .... is ATC still ECN with comm. + spread?

 

[>Apocalypto<]

Apoc .... is ATC still ECN with comm. + spread?

yeh, but sad news Aussies can only get a demo ATM , they need to register here to be able to take on clients.

their main business in the states is futures broking, so idea if it will ever happen.

 

[Wysiwyg]

THE PRICES FXCM OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE AND FXCM MAY OFFER DIFFERENT PRICES TO DIFFERENT CUSTOMERS.

Right there is a place ASIC can clean up. Forex brokers are exploiting every hole in the system and Australia is "good business" for the influx of FX brokers coming on line. Like I said before, they (FX brokers) are a law unto themselves.

 

[Jason Rogers]

you're a market maker, you profit from losses and as Norm noted match differences.

STP yeh yeh, fancy marketing for we're different. (if I am wrong please correct me)

one thing I will note, the feed FXCM fire off to ATC is really excellent.

Jason the following is from the FXCM website. I see no difference in you and any other market maker.

DISCLOSURE
THE FOREIGN CURRENCY TRADING YOU ARE ENTERING INTO IS NOT CONDUCTED ON AN EXCHANGE. FXCM IS ACTING AS A COUNTERPARTY IN THESE TRANSACTIONS AND, THEREFORE, ACTS AS THE BUYER WHEN YOU SELL AND THE SELLER WHEN YOU BUY. AS A RESULT, FXCM'S INTERESTS MAY BE IN CONFLICT WITH YOURS. UNLESS OTHERWISE SPECIFIED IN YOUR WRITTEN AGREEMENT OR OTHER WRITTEN DOCUMENTS FXCM ESTABLISHES THE PRICES AT WHICH IT OFFERS TO TRADE WITH YOU. THE PRICES FXCM OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE AND FXCM MAY OFFER DIFFERENT PRICES TO DIFFERENT CUSTOMERS. IF FXCM ELECTS NOT TO COVER ITS OWN TRADING EXPOSURE, THEN YOU SHOULD BE AWARE THAT FXCM MAY MAKE MORE MONEY IF THE MARKET GOES AGAINST YOU. ADDITIONALLY, SINCE FXCM ACTS AS THE BUYER OR SELLER IN THE TRANSACTION, YOU SHOULD CAREFULLY EVALUATE ANY TRADE RECOMMENDATIONS YOU RECEIVE FROM FXCM OR ANY OF FXCM'S REFERRING BROKERS. FXCM ITSELF DOES NOT PROVIDE INDIVIDUALIZED CLIENT TRADE RECOMMENDATIONS.

Cheers

Hi Apocalypto,

Taking portions of the website out of context is misleading.

As explained in previous posts FXCM Micro trades are managed through the FXCM trading desk which is what the paragraph you listed describes. If you would have copied the entire page or listed the website, then this would have been apparent as to what the paragraph applies to. I'm guessing you took this from the US trading agreement in which case the second paragraph also goes on to mention that accounts on the no dealing desk feed are executed back to back with a bank and therefore the outcome of the trade has no impact on FXCM's profit or loss.

You can read FXCM's execution policy for no dealing desk execution in the product disclosure statement http://www.forextrading.com.au/docs_pdfs/product-disclusore-statement-parts1_2.pdf on page 9:

FXCM offers No Dealing Desk (NDD) execution. With NDD, FXCM does not take a market position, which eliminates a major conflict of interest between broker and trader. Every trade is hedged back to back with FXCM LLC who in turn hedges with some of the world's premier banks or financial institutions, which compete to provide FXCM with bid and ask prices. These price providers (banks and financial institutions) do not see your stops, limits, and entry orders, The best spreads available to FXCM are streamed to you with a small markup. There is no dealer confirmation.​

 

[>Apocalypto<]

Hi Apocalypto,

Taking portions of the website out of context is misleading.

As explained in previous posts FXCM Micro trades are managed through the FXCM trading desk which is what the paragraph you listed describes. If you would have copied the entire page or listed the website, then this would have been apparent as to what the paragraph applies to. I'm guessing you took this from the US trading agreement in which case the second paragraph also goes on to mention that accounts on the no dealing desk feed are executed back to back with a bank and therefore the outcome of the trade has no impact on FXCM's profit or loss.

You can read FXCM's execution policy for no dealing desk execution in the product disclosure statement http://www.forextrading.com.au/docs_pdfs/product-disclusore-statement-parts1_2.pdf on page 9:

FXCM offers No Dealing Desk (NDD) execution. With NDD, FXCM does not take a market position, which eliminates a major conflict of interest between broker and trader. Every trade is hedged back to back with FXCM LLC who in turn hedges with some of the world's premier banks or financial institutions, which compete to provide FXCM with bid and ask prices. These price providers (banks and financial institutions) do not see your stops, limits, and entry orders, The best spreads available to FXCM are streamed to you with a small markup. There is no dealer confirmation.​

thanks for clearing that up