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FXCM Discussion

  • #3,941
  • Sep 4, 2013 1:08pm Sep 4, 2013 1:08pm
Quoting Slackjawed
Mrs Rogers I would like to ask you a question. What is the logic behind a tighter spread on the DD fxcm structure?
Hi Slackjawed,

While FXCM believes that No Dealing Desk (NDD) forex execution provides our best all-around trading experience, we also offer dealing desk execution as an alternative for traders whose primary concern is low spreads.

There are two main reasons why we can offer a lower spread on the DD model than on the NDD model:

Reason #1: On the DD model, we can often offset opposing client orders internally without having to share any profits from the spread with our liquidity providers. For example, on the DD model if the bid and ask prices for USD/JPY are at 99.540/99.552, we can make the entire 1.2 pip spread when one client sells at 99.540 and another client buys at 99.552. On the other hand, with the NDD model, if the bid and ask are at 99.535/99.557, then even though the spread is 2.2 pips, we only make a fraction of this, since each client order is offset one-for-one with our liquidity providers.


Reason #2: On the DD model, we may actively be taking a position in the market, which exposes the firm to market risk. When you are long, the Dealing Desk may be short. When you are short, the Dealing Desk may be long. So your losses can equate to the Dealing Desk's profit. Alternatively, your profits can equate to the Dealing Desk's loss.



Quoting Slackjawed
I understand that on the DD model, fxcm takes the other side of my trade but I don't see how based on this point alone fxcm can make money enough to justify tighter spreads. Now if DD means terrible slippages, platform freezing, re cotes etc Than it would make sense. Would you enlighten me on this matter please? Thanks.
I appreciate your concerns. Dealing Desk execution is used by many brokers in the forex industry, and to better manage their market risk, some Dealing Desk firms actively intervene in their clients' trading by re-quoting orders, delaying execution, skewing prices, or widening spreads.

What makes FXCM different is that we offer both Dealing Desk and NDD execution. If you are trading on Dealing Desk execution and your trading style exposes us to more risk than we're comfortable with, FXCM may, at our sole discretion and at any time, change your execution type to NDD. This is how FXCM can comfortably offer both options without having to resort to some of the common "dealer intervention" practices you listed above which take place at many forex brokers. That means there are no re-quotes with FXCM’s Dealing Desk execution and no restrictions on stops and limits.

The table below provides more information on the two forex execution models we offer to our clients.

Click to enlarge

http://imageshack.us/a/img16/2977/8kg.png



Welcome to the forum

Jason
  • #3,942
  • Sep 4, 2013 2:35pm Sep 4, 2013 2:35pm
Thanks for the answer, Mr Rogers.

Very good answer by the way. Nice to see a broker been honest about offsetting
positions internally and taking the other side of their customer trades.

You guys structure makes perfect sense now. I will consider doing business with you guys in the future.

Thanks again.
  • #3,943
  • Sep 5, 2013 1:45pm Sep 5, 2013 1:45pm
6 months of 'long vacation', and now back to trading world with fxcm uk. I wish they offer year end promotion like deposit $10,000 this week, and enjoy all active traders benefit. A Special promotion... :-). I missed my friend's AT account...

Cheers
  • #3,944
  • Sep 5, 2013 2:13pm Sep 5, 2013 2:13pm
Quoting zam4ever
6 months of 'long vacation', and now back to trading world with fxcm uk. I wish they offer year end promotion like deposit $10,000 this week, and enjoy all active traders benefit. A Special promotion... :-). I missed my friend's AT account... Cheers
Welcome back, Zam!

Not sure if you already knew this but aside from a 25k balance, you can also qualify for Active Trader pricing if your notional trading volume is at least 10M per month. Shoot me a private message if you'd like me to ask one of my colleagues in the Active Trader department follow up with you to discuss your options.

Jason
  • #3,945
  • Sep 9, 2013 7:56am Sep 9, 2013 7:56am
Jason
strange thinghappens with my fxcm tablet platform..

i had 90% margin available on my demo...with one 200k eur/dol in open position with profit..now as i tried buy 1mln units of eur/dol platform closed my other 200k ! this happened several times befire too..
why this haooened??? why oisitions get closed automatically when all margin stuff are oll good???
always draw trendlines
  • #3,946
  • Sep 9, 2013 10:21am Sep 9, 2013 10:21am
Quoting tk5
Jason strange thinghappens with my fxcm tablet platform.. i had 90% margin available on my demo...with one 200k eur/dol in open position with profit..now as i tried buy 1mln units of eur/dol platform closed my other 200k ! this happened several times befire too.. why this haooened??? why oisitions get closed automatically when all margin stuff are oll good???
Was your 200k EUR/USD trade a short (sell) position? If so, then your order to buy 1M EUR/USD might have closed the short position out, if hedging is not enabled on your demo account. If you registered your demo account on the FXCM.com website, then it would have been set up to comply with US regulations which do not allow hedging.

Your forum profile mentions that you live in the Solomon Islands. That means you can open an account with FXCM Australia instead of FXCM US. Australian regulations do not prohibit hedging. With hedging enabled, you can hold a long position and a short position on the same currency pair in your account simultaneously. Here's a link where you can sign up for a demo account with hedging enabled.
  • #3,947
  • Sep 9, 2013 11:57am Sep 9, 2013 11:57am
200k was buy, 1mln is sell...hmm so it seems because of hedging thing...i feel sorry for american clients..how can one go without having buu.short simultaneously.


- so i will register another demo from UK to make sure
- what other countries dont allow this?


you should indica this hedging thing more obviously on fxcm.com...
always draw trendlines
  • #3,948
  • Sep 9, 2013 3:04pm Sep 9, 2013 3:04pm
Quoting tk5
200k was buy, 1mln is sell...hmm so it seems because of hedging thing...i feel sorry for american clients..how can one go without having buu.short simultaneously. - so i will register another demo from UK to make sure - what other countries dont allow this? you should indica this hedging thing more obviously on fxcm.com...
Only FXCM US clients are prohibited from hedging due to US regulations. Non-US residents trading with FXCM UK or FXCM Australia have the ability to hedge and trade CFDs for oil, metals and stock indices. I'll pass on your suggestion to our website developers for FXCM.com to see if they can make information regarding hedging more prominent on the site.
  • #3,949
  • Sep 10, 2013 8:21am Sep 10, 2013 8:21am
Jason, where can i read about this US hedging regulation thing, official source?
always draw trendlines
  • #3,950
  • Sep 10, 2013 9:29am Sep 10, 2013 9:29am
Quoting tk5
Jason, where can i read about this US hedging regulation thing, official source?
This article has more details on the US regulations prohibiting hedging with links to the relevant CFTC documents. As I mentioned previously though, if you live outside the US, then you can trade through FXCM UK or FXCM Australia where hedging is allowed. CFTC regulations only require that US residents trade through a US-regulated broker.
  • #3,951
  • Sep 10, 2013 10:46am Sep 10, 2013 10:46am
Hi Jason. Could you tell me how wide was the spread on usdjpy, friday at nfp? I am not a client of FXCM, but I consider to become one. Thank you.
  • #3,952
  • Sep 10, 2013 12:18pm Sep 10, 2013 12:18pm
Quoting dak
Hi Jason. Could you tell me how wide was the spread on usdjpy, friday at nfp? I am not a client of FXCM, but I consider to become one. Thank you.
Welcome to the forum, Dak

The FXCM Trading Station allows you to see both the bid price and the ask price, so you can view the spread at anytime. During the NFP announcement last Friday, the USD/JPY spread got as wide as 21.1 pips at 08:30:01 EDT. To put this in perspective, the price dropped over 60 pips in less than a second due to the negative employment data.

http://img62.imageshack.us/img62/9295/58cs.png


Since you are interested in trading during news events, you might like to know about the FXCM platform features that can help you maximize price improvements and minimize negative slippage. Please let me know if you have further questions.
  • #3,953
  • Sep 11, 2013 2:36am Sep 11, 2013 2:36am
Jason Can I Open An Account With FXCM PRO with $100,000
  • #3,954
  • Sep 11, 2013 9:50am Sep 11, 2013 9:50am
Hi jason,

How about them historical charts for the indexes ? I see FXCM does updates every week but still no historical data ? Also does FXCM have any plans to add major indices to the instruments, example the indices traded in the S&p500 ? Just asking since most pro traders know that for day trading the odds are stacked against you, jsut pull up the numbers and throw them in a spread sheet, of course I'm sure u know that but..... conflict of interest and such . So before committing serious money to my account I'd like to know more about that.
Thanks
Enter Signature
  • #3,955
  • Sep 11, 2013 2:57pm Sep 11, 2013 2:57pm
Quoting Kevingreene
Jason Can I Open An Account With FXCM PRO with $100,000
Hi Kevin,

FXCM Pro clients are larger institutions and hedge funds trading currency for delivery with a prime broker. A better fit for you might be an Active Trader account. These accounts have a spread plus commission pricing structure. The combined transaction costs should be substantially lower than a standard FXCM trading account that uses No Dealing Desk execution.

http://img713.imageshack.us/img713/2949/rlte.png


The pricing structure is designed to reward those who trade large amounts of currency at FXCM by having commission fees reduce as trading volumes rise. If you'd like to speak with an Active Trader specialist for details regarding pricing, I can have one of my colleagues follow up with you. Just send me a private message with your contact details.

Jason
  • #3,956
  • Sep 11, 2013 3:18pm Sep 11, 2013 3:18pm
no disrespect i rather go with your IB ATC BROKERS for lower spreads from my understanding active trader is spread mark up and comm
  • #3,957
  • Sep 11, 2013 3:30pm Sep 11, 2013 3:30pm
Quoting johninthai
Hi jason, How about them historical charts for the indexes ? I see FXCM does updates every week but still no historical data ?
Hi John,

We plan to increase the amount of historical data available on Trading Station in the next major update we release for the platform. While you may notice some minor updates that we perform as part of routine maintenance on weekends, that is not the same as the major platform updates that we release a few times per year. I will post about it here on the forum when the next major update is released which will add more historical data to Trading Station.

Quoting johninthai
Also does FXCM have any plans to add major indices to the instruments, example the indices traded in the S&p500 ? Just asking since most pro traders know that for day trading the odds are stacked against you, jsut pull up the numbers and throw them in a spread sheet, of course I'm sure u know that but..... conflict of interest and such . So before committing serious money to my account I'd like to know more about that. Thanks
I'm not sure I understand your question about adding major indices to the instruments. As I believe you're already aware, in addition to currencies FXCM offers trading in CFDs (not available to US residents) for oil, metals and stock indices. For example, the SPX500 allows you to speculate on the value of the S&P 500.

http://img829.imageshack.us/img829/9522/0q66.png



Please tell me a bit more about what indices you would like to see added.

Thanks,
Jason
  • #3,958
  • Edited Sep 12, 2013 8:33am Sep 11, 2013 11:22pm | Edited Sep 12, 2013 8:33am
Hi Jason,

I mean the actual stocks that make up the SPX500. and I can only open 20 symbols so slightly annoying, gotta choose between the indexes, oil,... or the currencies
Enter Signature
  • #3,959
  • Sep 12, 2013 2:00pm Sep 12, 2013 2:00pm
Quoting johninthai
Hi Jason, I mean the actual stocks that make up the SPX500.
Hi John,

That's something we may offer in the future, but I have no specifics at this time regarding when it might happen.

Quoting johninthai
and I can only open 20 symbols so slightly annoying, gotta choose between the indexes, oil,... or the currencies

You can remove the 20-symbol restriction on Trading Station. Simply email a request to [email protected] referencing your account number, and our Operations department will do that for you. Just note that if you have a slower internet connection, it might be best to limit the amount of pairs you have enabled to 20, so less information has to be transferred.


Jason
  • #3,960
  • Sep 13, 2013 3:09am Sep 13, 2013 3:09am
Ok, Jason thanks for teh heads up and I hope soon FXCM will offer the stocks on the SPX500, because that is what I want to trade, we all know if we calculate daily ATR and ditribition odds that day trading is a perfect way to lose your account. So I hope soon they'll offer this otherwise I'll have to add my funds to Saxo bank.
Thanks
J.
Enter Signature
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