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Fxcm
- Thread starter EugenB
- Start date
Quote from buzz buzz:
spreads are much better also at oanda and IB (about 1.5 for eur/usd). They are both large, credible companies. IB is actually very big.
I am a representative of FXCM.
When considering spreads, there are two other things I'd recommend you take into consideration. They both have to do with the nature of the spread you receive and therefore the quality of the execution you will get.
One is whether the spread you're trading off of is fixed or variable. Many firms advertise tighter spreads, and show tighter spreads on their platforms the vast majority of the time, yet when markets are volatile or illiquid, widen their spreads substantially, in some cases up to 10 pips on the majors. Thus, while your transaction costs seem to be lower on most trades, you have to accept that this means you may have to pay much higher transaction costs when getting into our out of the market at volatile/illiquid times. FXCM's policy has been to create a marketplace where spreads are fixed under normal market conditions, and would only be widened under extraordinarily volatile market conditions. This is actually NOT available in the "real" marketplace, but FXCM's size has allowed it to offer spreads that allow clients to have certainty about the transaction costs they receive on each trade.
Size is an important issue, as larger firms do more business with key banks in the interbank market and therefore have better credit relationships with those banks. The more business a firm does with a bank, the better prices a firm will get from banks in general, and the better execution/pricing it can pass on to its clients.
The other, more subtle issue, deals with a practice known as price shading. Where a market maker places its spread is just as important as how wide it is and whether it is fixed. If the market is moving up rapidly because everyone is buying, and the market maker places its spread slightly above the true market price, then traders dealing with that firm end up paying a higher transaction cost to enter a trade despite the fact that the spread they see on their screen at a given time is tighter than at other firms. There is little I can say to demonstrate or prove that shading is not a practice followed by FXCM, but I would encourage you to carefully observe the prices you can trade at on demo and if possible real platforms of various market makers, to ensure that the execution you receive will be of the highest quality.
Eugen,
First, don't believe this guy. FXCM is one of many brokers that I would avoid at all costs. Their fixed spreads are too high. During major news announcements (ie extraordinarily volatile market conditions) either their spreads will widen considerably or you'll have major fill problems such as delays or platform freezing.....although, assuming your new to forex, I wouldn't recomend you trade major news announcements anyway.
There are even more significant issuse with FXCM like stop hunting and price shading. There are many posts both here and on moneytec that detail the above problems with FXCM and other bucket shops.
I agree that IB and Oanda are your best options.
Again, assuming you're completely new to forex, Oanda is probably your best bet.
IB accounts are insured up to 500k. Oanda, although very solid and reputable, does not offer insured accounts.
IB is best suited to experienced traders who daytrade/scalp forex and place trades of 100k or more (using 50:1 leverage). You also have the option of trading currency futures with IB. Other types of traders are probably better off with Oanda.
First, don't believe this guy. FXCM is one of many brokers that I would avoid at all costs. Their fixed spreads are too high. During major news announcements (ie extraordinarily volatile market conditions) either their spreads will widen considerably or you'll have major fill problems such as delays or platform freezing.....although, assuming your new to forex, I wouldn't recomend you trade major news announcements anyway.
There are even more significant issuse with FXCM like stop hunting and price shading. There are many posts both here and on moneytec that detail the above problems with FXCM and other bucket shops.
I agree that IB and Oanda are your best options.
Again, assuming you're completely new to forex, Oanda is probably your best bet.
IB accounts are insured up to 500k. Oanda, although very solid and reputable, does not offer insured accounts.
IB is best suited to experienced traders who daytrade/scalp forex and place trades of 100k or more (using 50:1 leverage). You also have the option of trading currency futures with IB. Other types of traders are probably better off with Oanda.
Quote from FXCMFXCM:
I am a representative of FXCM.
When considering spreads, there are two other things I'd recommend you take into consideration. They both have to do with the nature of the spread you receive and therefore the quality of the execution you will get.
One is whether the spread you're trading off of is fixed or variable. Many firms advertise tighter spreads, and show tighter spreads on their platforms the vast majority of the time, yet when markets are volatile or illiquid, widen their spreads substantially, in some cases up to 10 pips on the majors. Thus, while your transaction costs seem to be lower on most trades, you have to accept that this means you may have to pay much higher transaction costs when getting into our out of the market at volatile/illiquid times. FXCM's policy has been to create a marketplace where spreads are fixed under normal market conditions, and would only be widened under extraordinarily volatile market conditions. This is actually NOT available in the "real" marketplace, but FXCM's size has allowed it to offer spreads that allow clients to have certainty about the transaction costs they receive on each trade.
Size is an important issue, as larger firms do more business with key banks in the interbank market and therefore have better credit relationships with those banks. The more business a firm does with a bank, the better prices a firm will get from banks in general, and the better execution/pricing it can pass on to its clients.
The other, more subtle issue, deals with a practice known as price shading. Where a market maker places its spread is just as important as how wide it is and whether it is fixed. If the market is moving up rapidly because everyone is buying, and the market maker places its spread slightly above the true market price, then traders dealing with that firm end up paying a higher transaction cost to enter a trade despite the fact that the spread they see on their screen at a given time is tighter than at other firms. There is little I can say to demonstrate or prove that shading is not a practice followed by FXCM, but I would encourage you to carefully observe the prices you can trade at on demo and if possible real platforms of various market makers, to ensure that the execution you receive will be of the highest quality.
Quote from FXCMFXCM:
I am a representative of FXCM.
When considering spreads, there are two other things I'd recommend you take into consideration. They both have to do with the nature of the spread you receive and therefore the quality of the execution you will get.
One is whether the spread you're trading off of is fixed or variable. Many firms advertise tighter spreads, and show tighter spreads on their platforms the vast majority of the time, yet when markets are volatile or illiquid, widen their spreads substantially, in some cases up to 10 pips on the majors. Thus, while your transaction costs seem to be lower on most trades, you have to accept that this means you may have to pay much higher transaction costs when getting into our out of the market at volatile/illiquid times. FXCM's policy has been to create a marketplace where spreads are fixed under normal market conditions, and would only be widened under extraordinarily volatile market conditions. This is actually NOT available in the "real" marketplace, but FXCM's size has allowed it to offer spreads that allow clients to have certainty about the transaction costs they receive on each trade.
Size is an important issue, as larger firms do more business with key banks in the interbank market and therefore have better credit relationships with those banks. The more business a firm does with a bank, the better prices a firm will get from banks in general, and the better execution/pricing it can pass on to its clients.
The other, more subtle issue, deals with a practice known as price shading. Where a market maker places its spread is just as important as how wide it is and whether it is fixed. If the market is moving up rapidly because everyone is buying, and the market maker places its spread slightly above the true market price, then traders dealing with that firm end up paying a higher transaction cost to enter a trade despite the fact that the spread they see on their screen at a given time is tighter than at other firms. There is little I can say to demonstrate or prove that shading is not a practice followed by FXCM, but I would encourage you to carefully observe the prices you can trade at on demo and if possible real platforms of various market makers, to ensure that the execution you receive will be of the highest quality.
I love how FXCM always has a message sent to the platform "Speed of execution can not be guaranteed"....
haha, wtf are they doing then?
FXCM are a bunch of loosers.