The breakdown,
FXCM - taken from Wiki:
Like most market makers, FXCM's revenues come from five main sources:
- The Spread - The difference between the spread FXCM quotes to clients and the spread FXCM receives from the banks they offset from. If FXCM is unable to match a buyer and seller internally, FXCM will, after the positions become sufficiently large, offset with larger banks that quote them cheaper spreads.
- Internal matching of client trades - If the spread is 3 pips, and FXCM is able to match a buyer and a seller internally, they collect 3 pips.
- Interest on client deposits (like most online brokers, such as E*TRADE, these are a dependable and large source of income)
- The firm's own speculative positions in the market.
- Losses on clients' trades that were never offset.
Not all of the above apply to FXCM's "no-dealing-desk" trading option. In this set-up, trades are routed to other interbank market participants. FXCM then may not derive income from source two through five. This allows clients direct access to bank liquidity. However, all trades are still cleared through a dealing desk of some type as all banks have dealing desks.
Please note though that FXCM's "no-dealing-desk" still owns the platform that locks up, disconnects and breaksdown out of nowhere when news, and high volume is going through the market.
Advanced Currency Markets....need I say anymore? A Bonnie and Clyde operation where even Bonnie and Clyde themselves would say "we got the cash now, you want it back?"
What really put ACM on my scam list was when ACM just a few weeks ago stated on their homepage.
"New! Extended trading hours! Benefit from new extended trading hours with ACM From Sunday 23h00 CET to Friday 23h00 CET"
If that doesn't say scam (hasn't the real market always been open from these times on a norm?), well I can list a few more things....
"No request for quote (RFQ). Users click on a live streaming price feed, no requotes whatsoever even in fast markets, no timers and no dealer intervention, the only broker in the world offering pure one-click dealing." and
"Guaranteed fills on both limit and stop orders."
The true interbank market still does quote requests. NO true interbank broker can guarantee stops and limits.....you can if you are trading within your own book/market. If a broker guarantees your orders that only means one thing, they are taking the loss for your slippage, what type of business model is this? a broker accepting losses for clients? that only means one thing, they are gonna screw you out of your money either way. I recorded a live and demo account of ACM's platform, and I must say it is rather scary, both feeds had a spread widening of over 40+ pips on EUR/USD and +70 on GBP/USD this spread widening lasted for a little over 7 mins. I spoke to several banks and real ECN brokers about this and they stated that is rather riduclous, if a true interbank broker was to do this, then no one would trade with them and thier won't be an FX market, just do to the fact that realizing a true profit or loss on a 40+ spread is outrageous by current standards. ACM has a poor explanation on their site of saying that their spread are fixed 99.999% of the time. This is rubbish as it dances in their favor even in the simpliest of news, did anyone thing that productivity of France would be that colorful of a reaction in the FX market...well not to the rest of the market, but on ACM's market it is.
If you make money, you will lose money at ACM, thats the underlying motto. Your platform freezes up when you for 8 minutes before and after news. Even randomly when your placing orders on the market, limit or stop. Once your in the green they do get mean.