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FXCM's Profitability Report!!!

  • #41
  • Oct 18, 2010 4:50pm Oct 18, 2010 4:50pm
Quoting Platypus
Hey Jason...would you enlighten us about what was the criteria used to output "percentage profitability"?

Using round numbers, when you guys say that 30% make money and 70% don't ( out of a certain number of accounts)...... are you guys using individual physical accounts count or aggregated output?

Out...
lol what a crap is that
  • #42
  • Oct 18, 2010 5:38pm Oct 18, 2010 5:38pm
Quoting Jason Rogers
Well, US regulators have been somewhat ambiguous in how they expect everyone to calculate the figures, and from what I am aware, there was no official guidance posted. So I believe there could be some divergence between brokers in how they are calculated.

The probability percentages are based on the number of accounts (individual formula you mentioned). I wish I could post more specifics on the exact formula that was used, but I'm afraid I will only be able to do so once we have more official confirmation.

-Jason
Thanks for answering Jason.

Quote
Well, US regulators have been somewhat ambiguous in how they expect everyone to calculate the figures
Thats my point, if there are no specific guidelines what guaranties we have about some "esoteric" way of calculating percentages
  • #43
  • Oct 18, 2010 6:26pm Oct 18, 2010 6:26pm
Quoting Platypus
Thanks for answering Jason.

Thats my point, if there are no specific guidelines what guaranties we have about some "esoteric" way of calculating percentages
Also, even with guidelines, who is going to check the numbers? It does look like they are all using the same formula with the possible exception of Oanda.
  • #44
  • Oct 18, 2010 6:34pm Oct 18, 2010 6:34pm
Quoting A_3
lol what a crap is that
Just for your instruction my Oandanian friend behind an european proxy....


Brokers ( FXCM being one of them) already use this kind of trick to tell you half truths. I had a argument with Jason here a while ago because they use as a "propaganda" the idea that your individual order is routed directly to banks.

I challenged him to leave a statement about it and he couldn't because it was false.

As a aggregated order your position is indeed routed to the banks down the line, but individually your order stays in the bucket.

We saw in this crisis we are in, how "creative" people can be when greed kicks in.

Even using a "individual account" approach (as Jason said they do)they can still trick the output by doing it in a weighted way, where they shift the bigger losses to smaller accounts or something else.

The possibilities are limitless, if the CFTC does not establish a specific way of calculating it. I think the "regulators" left it dubious in purpose because they are in bed with the big guys anyways
  • #45
  • Oct 19, 2010 8:44am Oct 19, 2010 8:44am
Quoting Platypus
As a aggregated order your position is indeed routed to the banks down the line, but individually your order stays in the bucket.

We saw in this crisis we are in, how "creative" people can be when greed kicks in.
Your information is incorrect as before.

On NDD execution, each order is indivudally offset one to one with one of several bank market makers as outlined in the customer agreement traders sign and explained on the website http://www.fxcm.com/fxcm-forex-execution.jsp. If you have any questions, feel free to post in the FXCM Discussion thread.
  • #46
  • Oct 19, 2010 9:01am Oct 19, 2010 9:01am
Quoting Jason Rogers
Your information is incorrect as before.

On NDD execution, each order is indivudally offset one to one with one of several bank market makers as outlined in the customer agreement traders sign and explained on the website http://www.fxcm.com/fxcm-forex-execution.jsp. If you have any questions, feel free to post in the FXCM Discussion thread.
Whatever Jason....we went through this subject before. I worked for banks as a trader my whole life, and banks don't accept nothing less than full lots and acctually forex transactions 99.9% of times have double or more digits with a M at the end so stop talking non sense. Bucket shops deal with the 1000 bucks orders which they bundle up and send to the banks when they need.
  • #47
  • Oct 19, 2010 9:11am Oct 19, 2010 9:11am
Quoting shrike
The Oanda numbers dont make sense. I have nothing against them (i even have an account there), but i dont believe the average Oanda customer is 2x better than the avg customer of the others. A case of creative counting?

Cant find the report on the Oanda site too.

It makes sense to me. If nothing more, Oanda traders are smarter because:

- they can use any position size, which is the basis of a correct money management. This point alone can make all the difference.
- they use 50:1 leverage max

now that other brokers are forced to 50:1 leverage, you'll probably see also their profitability to rise.

Remember: this opninion may not be true on the individual level, but is 100% true on the mass level.
  • #48
  • Oct 19, 2010 9:55am Oct 19, 2010 9:55am
Quoting shrike
The Oanda numbers dont make sense. I have nothing against them (i even have an account there), but i dont believe the average Oanda customer is 2x better than the avg customer of the others. A case of creative counting?

Cant find the report on the Oanda site too.
No, its the other way around... The average customer is 2x worse than the average oanda-customer.
this pig cannot be slaughtered for ever... or can it?
  • #49
  • Oct 19, 2010 10:12am Oct 19, 2010 10:12am
Quoting jagui
now that other brokers are forced to 50:1 leverage, you'll probably see also their profitability to rise.
Come to think of it, yes... there is nothing more dangerous than gambling with high leverage... and usage of higher leverage IS ALWAYS gambling at its best....

So what do I take out of this? Why didnt oanda ever allow more then 50:1? It sure makes me feel secure as one of their customers....
this pig cannot be slaughtered for ever... or can it?
  • #50
  • Oct 19, 2010 10:16am Oct 19, 2010 10:16am
Quoting Platypus
Whatever Jason....we went through this subject before. I worked for banks as a trader my whole life, and banks don't accept nothing less than full lots and acctually forex transactions 99.9% of times have double or more digits with a M at the end so stop talking non sense. Bucket shops deal with the 1000 bucks orders which they bundle up and send to the banks when they need.

Stop talking out of your aXX.
Banks trade on EBS and Reuters :



"Another factor contributing to lack of liquidity in FX is that this market not centralised. It does have at its hub two electronic brokers, EBS and Reuters. EBS is the larger of these market hubs, reporting average daily turnover of USD12bn. But impressive as this is, prices on its screens are often only for small amounts. According to the company, EBS's average deal size is just under USD3m."

http://www.exchange-handbook.co.uk/i...etail&id=60612





"The minimum transaction size of each unit that can be dealt on either platform tends to one million of the base currency. The average one-ticket transaction size tends to five million of the base currency."

http://www.investopedia.com/articles.../interbank.asp


99.9 % double digits M , single digits M, my friend

You , a ex-bank trader, LOL, thanks for the laughs, you are problably sitting in your mother's basement trading a $100 Oanda account LOL
  • #51
  • Oct 19, 2010 10:38am Oct 19, 2010 10:38am
Just FYI, EBS added support to 100K lots and 1/10 pip pricing recently (a few months ago).
  • #52
  • Edited 1:55pm Oct 19, 2010 1:44pm | Edited 1:55pm
Quoting jagui
now that other brokers are forced to 50:1 leverage, you'll probably see also their profitability to rise.
Viola, Magic! I'm gong to be rich!

Everything about why people "lose" was in Jason's response, and the tables show that 50:1 will make it harder. Since the less you have in the account the more you lose right?

Let's take AUD/USD as the rates make the margin more of a round number. Since that is near 10,000 for a mini lot. Let's do a mini, and all you need to do is add a zero for a standard. Unless of course, you're rich, which I know a lot or a few people are here, but this is about me not them.
197.36$ needed at 50/1.
This equals 493.40 at 20/1

or with rounded numbers. 200 dollars margin at 50:1 100 dollars at 100:1 or 25 dollars at 400:1. So the typical story might have been:
I have $250. I see an ad, I was always interested in finance, and trading seems awesome, plus it's a 24 hour market, so why not give it a shot. 250 isn't even a hotel room for a weekend and this could lead to something.
I trade a mini for 250, which costs 25 in margin. at $1/pip, I now have 225 points until My account gets liquidated. Well, no one will probably not panic and let that happen frankly to blow the account in one trade. But at least they have a lot of trades to learn their lessons. EG: "Tuition". Learning is lifelong, and If I learn 50 lessons in 20 trades, that is a good thing and a lot of experience.
Present day. I trade on a mini for 250 dollars. This cost me 200 dollars(I cannot trade most pairs today as I do not have the necessary margin for a mini account outside of NZD and AUD pairs I notice. EUR/USD is out(278 dollars per my broker). I can only do higher spread pairs.
I do one trade. I have only 50 points until my margin call. Of course every broker gives the call at different percentages, I'm doing 100% is it? Anyway, I trade overnight and sleeping, I gotta go to work in the mailroom tomorrow. I do trades on the daily so I need a big buffer. I was margin called at 50 points, and "blew" my accounts. I can't trade anymore I don't have the margin. The trade went in my favor after a 55pip retracement, but I didn't have the leverage to hang on. My trade would've went 150 points afterwards, 1.65 days pay I lost(I would have to work in the mailroom for 16 hours to make what I would've sleeping in one night), plus the ability to trade. I was so distressed at being pushed down, I lost my job now too at knowing I could've made more money sleeping, but alas...I learned nothing in my only one trade I was allowed to do except that this is a sham and not hate wall street. (then guess where I vote after that!)

You know why 50:1 will make the market seem more profitable? It will turn so many people off. They call this "barriers to entry". Less people to fail because less opportunity and less of a chance. Ain't that America for you and me... magic.

Now I know a lot of people here can afford more money to use part time and all. But isn't it funny how the democrats always talk about leveling the playing field, and it always ends up being what Thatcher warned about, the poor doesn't get elevated, everyone else is pushed down. Which should include everyone with initiative.
But I'm a dreamer.
  • #53
  • Oct 19, 2010 2:28pm Oct 19, 2010 2:28pm
Quoting Cocoflanel
Stop talking out of your aXX.
Banks trade on EBS and Reuters :



"Another factor contributing to lack of liquidity in FX is that this...
Behold.... the oracle from Neverland..and his investopedia education......
  • #54
  • Edited 9:33am Oct 22, 2010 9:23am | Edited 9:33am
Quoting Trader KGB
Thanks Jason.

If you're willing to report them, I'm curious on the figures for the ATG group. I thought MBT would be higher since the ECN market tends to attract a more sophisticated trader, was rather surprised to see them fall right in the line with the rest.
To follow up on previous discussion from Monday, here's the profitability by account equity range broken down on a quarterly basis (as opposed to previous monthly figures).

http://img840.imageshack.us/img840/2...itabilityb.png


Not sure about the figures on the ATG group but will take it into consideration with the other data we're compiling.
  • #55
  • Oct 22, 2010 9:45am Oct 22, 2010 9:45am
I see that Oanda is winning this time. Maybe it is because a lot of greedy brokers have killed their clients accounts a lot eariler than usual

I heard that FXCM has 150,000 clients, but it truned out to be a fake talk.

I remember last few months they were trying to get me back again to deal with them calling 3 times a week, but no way.

Stay away from FXCM and you will definitely survive in the FX market.

Best wishes,

SF
  • #56
  • Oct 22, 2010 10:08am Oct 22, 2010 10:08am
Quoting scarface9
I see that Oanda is winning this time. Maybe it is because a lot of greedy brokers have killed their clients accounts a lot eariler than usual

I heard that FXCM has 150,000 clients, but it truned out to be a fake talk.

I remember last few months they were trying to get me back again to deal with them calling 3 times a week, but no way.

Stay away from FXCM and you will definitely survive in the FX market.

Best wishes,

SF

Hi Scarface,

FYI, the numbers disclosed for each broker are for actively traded accounts with CFTC regulated entities. FXCM is an international firm so accounts with other entities such as FXCM UK, FXCM Australia, etc. are not included in this figure. There are over 165,000 tradeable accounts on platforms offered by FXCM.

In the weeks ahead we will be releasing more details on profitability broken down even further, for example by currency pair, to give you more insight into trader profitability.

-Jason
  • #57
  • Oct 22, 2010 10:25am Oct 22, 2010 10:25am
Quoting Jason Rogers
Hi Scarface,

There are over 165,000 tradeable accounts on platforms offered by FXCM.
Wow... so only ~10% of your base is USA?

When you say platforms offered by FXCM, I take it this number includes dbfx?
  • #58
  • Oct 22, 2010 9:56pm Oct 22, 2010 9:56pm
1) The distribution of winning traders vs. losing traders over time is a random distribution. Within such distribution, consistently winning traders will always be a small percentage. This is not a "myth".

2) This data doesn't really mean much for reasons already mentioned in this thread (i.e. lack of information on the data). Be aware that it does NOT describe long-term performance of traders. Unlike what the self-promoting bröker may want the newbie to believe, just because it had 50% profitable accounts in such report does NOT mean 50% of its traders are consistent winners. Far from it.

3) Low spreads + no commissions + interest on dormant accounts + large number of accounts are all factors that definitely give Oanda an edge over other brökers as far as those stats are concerned (and no, the 50:1 leverage isn't one of them).
  • #59
  • Oct 23, 2010 10:45pm Oct 23, 2010 10:45pm
Quoting shrike
The Oanda numbers dont make sense. I have nothing against them (i even have an account there), but i dont believe the average Oanda customer is 2x better than the avg customer of the others. A case of creative counting?

Cant find the report on the Oanda site too.
It must be that proprietary trading platform. ahaha.

The question that I have: "Is sub accounts accounted for". I know memebers on MFB that have a hand full of sub accounts under their primary account. So in respect to the sub accounts, maybe they have an equal number at IBFX and FXCM.
  • #60
  • Oct 23, 2010 10:54pm Oct 23, 2010 10:54pm
Quoting Patience
I did do a comparison once of Oanda vs. FXCM's sentiment index over a couple of weeks. Nothing really deep - just a quick squiz of the numbers, but I did come to the conclusion that Oanda's clients were better traders than FXCM's clients i.e. more of FXCM's clients were on the wrong side most of the time. So I prefer to look at FXCM's sentiment index.
Also we must believe the marketing efforts from Fxcm are 10fold of Oanda. resulting in a much higher amount of beginner traders on FXCM opposed to Oanda. My first account was IBFX in 2007, then FXCM from 2008-2010. I finally ditched FXCM in early 2010 and I tested out Oanda about 2 months ago. I would say that marketing effort plays a big rule in these statistics. The more experienced traders feel at home with Oanda, while fxcm leaves a soar taste in our mouth.
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