FXCM Micro becoming No Dealing Desk | Forex Factory

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FXCM Micro becoming No Dealing Desk

  • #1
  • First Post: Mar 3, 2010 5:29pm Mar 3, 2010 5:29pm
Just got an email saying that FXCM Micro will be switching over to a No Dealing Desk format. The spreads will now be the same as the Standard accounts. The $5000 balance limit is gone. Apparently this all happens sometime at the end of this month. I wonder if this is a good thing.
  • #2
  • Mar 3, 2010 8:14pm Mar 3, 2010 8:14pm
It sucks if you scalp, which is already hard enough to do with 1.5 pip spreads. Now its 2.3, and this the last straw for me. Not that I'm a big trader that will mean much at all to them, but now it just makes more sense to trade the EURUSD futures. Futures spreads on EURUSD are about 1 pip plus commissions which will be under $5 RT.
  • #3
  • Mar 3, 2010 8:44pm Mar 3, 2010 8:44pm
Quoting bebop
It sucks if you scalp, which is already hard enough to do with 1.5 pip spreads. Now its 2.3, and this the last straw for me. Not that I'm a big trader that will mean much at all to them, but now it just makes more sense to trade the EURUSD futures. Futures spreads on EURUSD are about 1 pip plus commissions which will be under $5 RT.
yes, but with FXCM UK Micro you have about 200:1 real margin (400:1 on some currencies like USD/CHF or USD/JPY)

what's the margin on futures ?
  • #4
  • Mar 3, 2010 8:48pm Mar 3, 2010 8:48pm
Quoting m78
yes, but with FXCM UK Micro you have about 200:1 real margin (400:1 on some currencies like USD/CHF or USD/JPY)

what's the margin on futures ?
The broker I'm going to use has a $500 day trading margin on euro futures, and that's for the big one ($12.5/pip). This is perfect for me since I've given up trying to figure out what the hell the market's going to do beyond the next 5-10 minutes.
  • #5
  • Mar 3, 2010 8:53pm Mar 3, 2010 8:53pm
Quoting bebop
The broker I'm going to use has a $500 day trading margin on euro futures, and that's for the big one ($12.5/pip). This is perfect for me since I've given up trying to figure out what the hell the market's going to do beyond the next 5-10 minutes.
what does it mean "$500 day trading margin" ???

If I have $10K in my account how much of the euro futures can I buy before they liquidate my contract ?

Eg: with 400:1 fxcm uk I can buy $10K/$2.5 = 4MIL of USD/JPY (40 x 100,000) ... and
$10K/3.75 = 2.66 (26x 100,000) MIL of EUR/USD ...

I'm asking since I'm usually averaging my positions so they build up and I prefer to know how far I can go
  • #6
  • Mar 3, 2010 9:10pm Mar 3, 2010 9:10pm
Quoting m78
what does it mean "$500 day trading margin" ???

If I have $10K in my account how much of the euro futures can I buy before they liquidate my contract ?

Eg: with 400:1 fxcm uk I can buy $10K/$2.5 = 4MIL of USD/JPY (40 x 100,000) ... and
$10K/3.75 = 2.66 (26x 100,000) MIL of EUR/USD ...

I'm asking since I'm usually averaging my positions so they build up and I prefer to know how far I can go

If you've got 10k and you buy 1 contract($12.5/pip), you'll have 760 pips until liqiudation(760 x 12.5 = 9500). Buy 2 contracts and you'll have 360. Got it?
  • #7
  • Mar 3, 2010 9:23pm Mar 3, 2010 9:23pm
Quoting bebop
If you've got 10k and you buy 1 contract($12.5/pip), you'll have 760 pips until liqiudation(760 x 12.5 = 9500). ...
that $500 is this the deposit/margin for opening 1 contract ?
  • #8
  • Mar 4, 2010 5:44am Mar 4, 2010 5:44am
Great!! A no dealing desk mini account. I like it!
  • #9
  • Mar 4, 2010 8:13am Mar 4, 2010 8:13am
Can't they simply reduce the minimum lot size in the current STP accounts to 0.01 lots (1K of base currency)? They can simply get rid of the "Micro" division.
  • #10
  • Mar 4, 2010 8:19am Mar 4, 2010 8:19am
This sucks for traders. After you remove all the fluff, it just means we will be paying higher spread costs.
  • #11
  • Mar 4, 2010 8:48am Mar 4, 2010 8:48am
And maybe even more slippage since the orders will be going directly to the banks. But I hope I'm wrong.
  • #12
  • Mar 4, 2010 10:02am Mar 4, 2010 10:02am
Quoting sonicpunk32
And maybe even more slippage since the orders will be going directly to the banks. But I hope I'm wrong.
Hi sonicpunk,

Thanks for your post. Here is my reply on the FXCM Discussion thread:

Quoting Jason Rogers
It should be comparable to what you experienced on FXCM Micro's current setup.

On the topic of slippage, I know this ranks as a top concern for NDD/STP execution models since your order is being filled according to available liquidity. What you can do is continue to use the order management tools you use for market orders such as At Best or Market Range to control the amount of slippage you are willing to accept on market orders. And this is an ongoing concern for us as well as we are always looking for new ways to improve order execution and...
  • #13
  • Mar 4, 2010 10:06am Mar 4, 2010 10:06am
Quoting FX-Petra
This sucks for traders. After you remove all the fluff, it just means we will be paying higher spread costs.
To bebop and FX-Petra,

This has been a cause of concern for traders about FXCM Micro upgrading to No Dealing Desk execution, and I would like to address it with my reply from another post in the FXCM Discussion thread.

All of our forex execution needs to be No Dealing Desk. We understand this does not suit everyone and we apologize for this due to the change in spreads. However, the new regulatory environment necessitates it because the new operating environment will raise business costs. Capital requirements are going up in most Asian and European jurisdictions, and margin requirements are going up in Asia and possibly in the United States if the proposal passes. If we are to keep doing business from well regulated jurisdictions and not offshore islands, we have no choice.

Spreads on micro accounts are going to be matching standard 10k accounts because of this, but the execution method will eliminate a conflict of interest for micro traders. Traders with an account balance of $10,000 or greater at the close of trading on March 18 will automatically have a 1 pip reduction from FXCM's standard spreads, and traders also have the option to deposit additional funds to take advantage of the offer.

Our intention from the start of launching FXCM Micro was to have No Dealing Desk execution, but the banks were not willing to accept it at the time. FXCM Micro will continue as an entry option for traders to start with as little as $25 and move on to a standard account with additional services and the possibility for reduced spreads as trading volume increases.

-Jason
  • #14
  • Mar 4, 2010 10:08am Mar 4, 2010 10:08am
Quoting racedesign
Great!! A no dealing desk mini account. I like it!
Thanks for the feedback!
  • #15
  • Mar 5, 2010 5:26am Mar 5, 2010 5:26am
HI,
why dont u make a rebate on the volume of trading, i scalp about 200k a day on my micro account so this no dealing desk thing has more negative effects for me as i can see now.
  • #16
  • Last Post: Mar 5, 2010 10:30am Mar 5, 2010 10:30am
Jason, is it possible now to reduce the minimum trade size on MetaTrader STP accounts to a micro lot (1000 of base currency)?
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