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Am I crazy or is FXCM crooked?
- Thread starter cking74
- Start date
Quote from cking74:
Thanks to everyone for the constructive comments. I have to admit my embrassment to find out that I have not been buying and selling actual positions but have only been bidding against fxcm.
Upon calling fxcm and complaining they have offered a service called Prop FX. Which they claim actually allows me to enter real positions directly with the interbanks. Anyone have experience with this?
Still, a conflict of interest exists. While they use multiple banks as liquidity providers as all ECN style brokers do such as Currenex. Hotspot FXi, IB, MB Trading , etc, (which Prop FX is nearly claiming to be like), they (Prop FX) charge no fees or commissions (which all ECNs do) but instead get rebated back from the banks feeding the platform based on the volume and currency pairs traded.
Another curious thing is that FXCM is indifferent about whether a client choses to trade on their retail platform or on their Prop platform. Now why would that be? (The only difference is account opening sizes.)
I don't think Prop FX get's rebated by
the banks, they just mark-up the spread
so that they get 1 pip RT commission
per trade
the banks, they just mark-up the spread
so that they get 1 pip RT commission
per trade
Quote from NickBarings:
I don't think Prop FX get's rebated by
the banks, they just mark-up the spread
so that they get 1 pip RT commission
per trade
They actually do get rebated. And they'll tell you as much if you ask. But even if you didn't know for sure, if you look at their platform, it would not be possible to shade prices. It's similiar to Currenex's platform in some respects. The only reasonable conclusion since they don't charge a commission like every other Spot Forex ECN, and have a low minimum deal size of 50,000, is that they make money via rebates. AKA, kickbacks... to put a more villianous twist to the term rebate.
why not just avoid the company altogether and trade through one of the "ecns"?
the avoidance of commish in forex trading really does a lot of damage in the long run. The commish is really low at most ecns, usually less than the extra spread, and more importantly, no requotes or unfilled orders.
the avoidance of commish in forex trading really does a lot of damage in the long run. The commish is really low at most ecns, usually less than the extra spread, and more importantly, no requotes or unfilled orders.
Quote from ddunbar:
Extra spread? As in price shading? I haven't seen their platform lately but if they aren't offering 1/2 pip quote increments, then there may yet be the possibility of price shading with PropFX division.
"Extra spread" refers to the 1-pip markup of the spread by FXCM's PropFX division, as pointed out above by NickBarings. It does not refer to price shading.