FXCM Discussion

Oh, I agree 100%. That was my point. FXCM just recently has made the move to 100% NDD. A great move which made me actually consider using you guys. I was just stating that under your old model, this would be a way different scenario.

Fxcm's major fault was to specify that clients were not liable for losses greater than their account.
other than that, they would have been ok. Put losers into collection!

Then the plug would be automatically pulled after 100 pips or so amid this volatility. You should know this because when FXCM was a mm you always took care of a frozen platform at big news announcements.

Point is, you ECN brokers can´t do anything when you LP´s don´t provide quotes except from hoping and praying.

h guys , I'm new here . I just revived a call from FXCM informing me that the magin required for all pairs will be changes for example EUR/USD will be USD 2700 for standard lot etc ... but I can't see this advertised any where !! have anybody faced the same

you can expect them to be penalized by a heavy fine.

So, this is a part of an article posted here http://forexmagnates.com/fxcm-inc-sh...ances-pending/. Representatives of FXCM have not said anything yet so this is all just speculation but the article suggests clients with negative balances may be liable under the Force Majeure Event clause. Can they successfully argue that the removal of the floor was Force Majeure remains to be seen. Also their aggressive promotional campaign that often explicitly affirmed "no debit balance" policy further complicates the situation IMO

No Universal Approach Towards Negative Account Balances
According to information obtained by Forex Magnates reporters from sources close to the company, the firm is handling the negative account balances issue on a case-by-case basis, with FXCM’s trade audit team busy with examining the fills of every negative account balance.
Forex Magnates reporters have contacted the company enquiring about the way FXCM was handling negative account issues in the aftermath of the Swiss black swan, but at the time of publication the company hasn’t replied.
Following is an excerpt detailing the terms and conditions of FXCM related to negative account balances:
A number of the Company’s platforms are designed with safeguards to prevent the Client from incurring a negative balance due to trading activity. Still, those safeguards may fail making it possible for the Client to incur a negative balance while trading. If the Client incurs a negative balance through trading activity, the Client should inform the Company’s trade audit team. The Company will evaluate the inquiry and credit the Client’s Account with the amount of the negative balance where the debit was due to trading activity. The provisions of this clause 30.3 shall not apply:
(a) in the case of a Force Majeure Event provided for in clause 25 of these Terms;
(b) where the Company determines, in its sole and absolute discretion, that the negative balance is unrelated to the Client’s trading activity (for example, where the debit relates to any fees or charges owed by the Client to the Company under these Terms);
(c) where the negative balance is connected to or a result of, either direct or indirect, the Client’s breach of any provision within these Terms;
(d) if the Client is classified as an Eligible Counterparty;
(e) if the Client has entered into a white label or omnibus account relationship with the Company;
(f) where the Client deals with the Company through a credit arrangement provided by the Company;
(g) where the Company utilises assets held by it or its Nominee for the Client’s behalf as Margin; and/or
(h) to Transactions in Equities, Futures Contracts, Options Contracts, CFD Contracts where the Underlying Instrument is a Security, and/or any other products offered by the Company from time to time that are traded on a Market.
The “Force Majeure Event” clause doesn’t prevent clients from being asked to pay for their negative account balances. Every trader application contains data about the annual income and the net worth of the client. While no client is guaranteed to have entered the information in earnest, it gives the brokerage a point to start from.
Following is the above-mentioned Clause 25 from the terms and conditions agreement signed by every customer of the brokerage:
Force Majeure
25.1 Since the Company does not control signal power, its reception or routing via Internet, configuration of the Client’s equipment or reliability of its connections, the Company shall not be liable for any claims, losses, damages, costs or expenses, including attorney’s fees, caused directly or indirectly, by any breakdown or failure of any transmission or communication system or equipment or computer facility or trading software, whether belonging to the Company or its Associated Companies, the Client, any Market, or any settlement or clearing system when the Client trades online (via Internet) or for any cause preventing the Company from performing any or all its obligations, any act of God, war, terrorism, malicious damage, civil commotion, industrial acts, any Exceptional Market Event, or acts and regulations of any governmental or supra national bodies or authorities which in the Company’s opinion prevent an orderly market in relation to the Client’s Orders (a “Force Majeure Event”).
25.2 Upon the occurrence of a Force Majeure Event, the Company shall use commercially reasonable efforts to resume performance and it may give the Client written notice that a Force Majeure Event has occurred. Upon occurrence of a Force Majeure Event, all of the Company’s obligations under these Terms of Business shall be immediately suspended for the duration of such Force Majeure Event. Additionally, the Company may take any one or more of the following steps:
(a) alter normal trading times;
(b) alter the Margin Requirements;
(c) amend or vary these Terms and any Transaction contemplated by these Terms, insofar as it is impractical or impossible for the Company to comply with its obligations;
(d) close any or all Open Positions, cancel instructions and Orders as the Company deems to be appropriate in the circumstances; and/or
(e) take or omit to take all such other actions as the Company deems to be reasonably appropriate in the circumstances having regard to the Clients positions and those positions of the Company’s other customers.
- See more at: http://forexmagnates.com/fxcm-inc-sh....LiikIQp7.dpuf

So Jason what will FXCM be doing with clients who did not go negative but lost their whole account because of stop slippage. I lost 100% of my account on a 1% risk eur/chf trade.I realise this is not all your fault due to lack of liquidity but on the basis that clients rely on there stops and FXCM failed to put in place any protection for a major risk event then some blame must lie with FXCM.A nice gesture to clients would be to except some blame and cover at least half the loss.

Also if u do decide to zero negative balances then it will mean negative account clients have had to only cover a partial loss but those who happened to have excess money in the account will have to cover their full loss which is treating clients differently and a bit unfair don't u think?

I just receive my withdrawal, took 2 days. I had no problem with them in the last year but their situation is bad right know, you can't trade in peace.

and they also said if your balance does not cover the new margin requirements it will be a margin call ... I'm really surprise if such a major changes will happen in a few hours why they are not advertising it anywhere

If you're in the US, that is 50:1. Nothing has changed.

Are you going to answer my post above Jason or just ignore it?These vague responses from you are not filling us with confidence all the other brokers have confirmed what they are doing already why is FXCM leaving everyone hanging and making the situation even worse.Its nearly a week now since I placed my trade audit and I've had no response a decision ethier way would be nice so we can all move on with our lives.

"I lost 100% of my account on a 1% risk" - u see, it doesn't translate into anything other than 1% risk. how much of your buying power have you used, since 1% can be 7 pips, 20 pips, 100 pips, etc s/l? sorry this happened to you!
other than that, from the article posted above, it's quite clear that they are more than busy reviewing each negative account. probably jason does the same thing. when they'll reach a conclusion, probably we'll know and jason will be back.

The real risk is open-ended, not 1%, as has now been demonstrated. A S/L is a money management tool that cannot be relied on 100% when defining risk. At 100:1 leverage, you are borrowing $100 from the broker for every £1 in your account, as if you were given a $100,000 credit card for a $1000 deposit and are trading with that money at 1:1.

Under normal circumstances, when the market is liquid and moving 'normally', your stops will be honored so it never seems as if that 100:1 leverage is truly a risk. If you take into account slippage, then that 100:1 leverage becomes a big problem. No one can know how far the slippage goes, and a huge spread will add to this risk, so risk is very hard to define with high leverage.

Not even one week after the Swiss tsunami and we are already seeing things changing.

More changes to come as volatility picks up.

Regulators will start to have ideas.

Last Thursday changed forex forever!!

FXCM reduced its leverage to 50:1 worldwide, not just for US customers, but for all customers:

http://ir.fxcm.com/releasedetail.cfm?ReleaseID=892314


10:1 here we come....

I'm not a lawyer but it is common sense that FXCM is not claiming Force Majeure for the nature of the event itself, but rather for the magnitude of their loss.

I doubt a Central Bank decision could qualify for a Force Majeure (CBs intervene all the time), and although the move has been important, it was not unpredictable (some did forecast it), irresistible (some took measures to prevent losses) and it was clearly within their business field.

Hence I can't see a judge accepting the Force Majeure. Furthermore, I can't see how it could suddenly prevail on all FXCM's terms and advertising toward retail clients.

IMH FXCM has no other choice than to chase negative balances, but they won't ever get a penny through Courts. All they risk is further costs, penalties and bad publicity. Hope all the clients will find the strength to fight since FXCM clearly goes against it owns values and rights.

Law firm launches investigation on Fxcm.

Things are going from worse to worse by minutes:

Law firm launches investigation into FXCM : http://www.forexlive.com/blog/2015/0...ion-into-fxcm/



FXCM SHAREHOLDER ALERT: The Law Firm of Levi & Korsinsky, LLP Launches an Investigation into Possible Violations of Federal Securities Laws by the Board of Directors of FXCM Inc.

http://www.marketwatch.com/story/fxc...k=MW_news_stmp

It may be the end for them, that's too bad really!

I just received a call from FXCM regarding their new leverage rules. I appreciate that I receive a call at 4am in the morning (since I am in Asia), telling me that FXCM will reduce leverage and every customer has to increase his deposit by 8 times or he will receive a margin call and his positions will be closed.

I understand that FXCM is more than nervous after getting burned by SNB, but such a fundamental change, should be announced at least 48h in advance.