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  • #10,141
  • Feb 27, 2017 4:59pm Feb 27, 2017 4:59pm
The scheme deployed by FXCM was complex and varied, utilizing aggressive and pervasive marketing and advertising campaigns, including television, internet, seminars, webinars, and other media, portraying FXCM as a foreign currency trading platform where investors could trade foreign currencies in a true market environment. The advertisements were specifically targeted to convey a sense of trust and transparency to potential FXCM customers and to gain the customers confidence in FXCMs trading platform. To further bolster customers confidence in its platform, FXCM enticed customers to use FXCMs practice or demo account (hereinafter, the Demo Account) to simulate an FXCM trading experience. But the Demo Account, just like the myriad advertisements, misled customers about the true nature, functionality, and performance of the platform. Once lured into opening an account, customers were subjected to a staggering array of stratagems and ploys, some using extremely sophisticated computer software based upon complex algorithms and high-speed computers, to deceive the customers into believing that their trading was being affected by normal market forces, while in reality FXCM traded against its own customers.
Quoting Jason Rogers
{quote} {quote} {quote} {quote} {quote} Hi Everyone, The case you're referring to was filed in February of 2011 and was dismissed in November of that same year. A quick search shows this was already pointed out in December of 2011: http://www.forexfactory.com/showthre...ed#post5234250
  • #10,142
  • Feb 27, 2017 5:07pm Feb 27, 2017 5:07pm
Defendant has modified its trading platform so that many of these dishonest trading practices are applied to a customers account by automated computerized algorithms. Through this association, Defendant has also modified its trading platform to include a sophisticated back-end administrative console which provides Defendant and its employees a series of system commands designed, each accessible through a drop down menu, to execute many of the dishonest trading practices described below. All of these software modifications have been implemented by Defendant to prevent customers from making money and to cause customers to lose money to Defendant
Quoting Jason Rogers
{quote} {quote} {quote} {quote} {quote} Hi Everyone, The case you're referring to was filed in February of 2011 and was dismissed in November of that same year. A quick search shows this was already pointed out in December of 2011: http://www.forexfactory.com/showthre...ed#post5234250
  • #10,143
  • Feb 27, 2017 11:06pm Feb 27, 2017 11:06pm
Quoting Jason Rogers
{quote} Hi Cyguy, Trading Station (Desktop, Mobile and Web) is FXCM's own proprietary trading platform. While you will no longer be able to place live trades through our platforms, now that your US account has been transferred to another broker, you should still be able to access your charts by logging into a demo account.
Actually, my old real account still works... just no money in it.
  • #10,144
  • Feb 27, 2017 11:27pm Feb 27, 2017 11:27pm
Quoting USATrader007
a. Slow Server Command: When a customer is engaged in profitable trading activity, Defendant routes the customers account to a slow server, causing trade execution to be slowed down, and allowing Defendant the time to hijack any potential profit in the trade by buying and selling in-between the customers order and the real market, with Defendants taking any profit and leaving the customer victimized with no money for his or her effort;
BS! In 8 years I've never noticed that. What has happened is the software would display "Price cannot be hit" when using a market order sometimes. The last time that happened was in october when the sterling crashed due to the newbie trader at Citi http://www.zerohedge.com/news/2016-1...nd-flash-crash

I had to use entry orders instead of market orders to buy near the bottom.

Other than that, I've never, ever noticed slow execution. Never.

Quote
b. False Error Messages: Defendant uses its administrative back-end software to prevent the customer from closing out a profitable trade and instead causes the trading system to generate any one of a series of error messages to the customer, blocking the customers efforts to finalize what would have been a profitable order;

The only error messages I noticed was the one described above.

Quote
c. Flash Trades: Defendant, in a practice known as stop hunting, manipulates the market price of the traded currency, including printing bogus flash trades which move the market to trigger the customers stop order for a given trade, essentially closing the customer out of that trade;

Yes, that was common.

Quote
d. Arbitrary Margin Rules: Defendant arbitrarily changes the margin rules on Fridays for an ensuing week without any notice to the customer, which results in the customers being deprived of any trading advantages or leverage opportunities they may have, and again causing the customers account to be closed out in favor of Defendant;

This was a problem in the last few months. It used to be that FXCM would announce margin changes well in advance, but then the margin would change on a whim and without notice... and usually right before I really needed that margin. Underhanded, yes. They knew lots of traders were hanging on by threads and had a way to capitalize on it, I'm sure. I would have complained, but figured it was futile.

Quote
e. Abuse of Slippage: Defendant, in a practice known as slipping a trade, takes advantage of slippage in a given trade. Slippage is the change in price between the time when a price is quoted and a market order is placed. It is customarily caused by market movement while the trade is being executed. The incidence of slippage should roughly be equal in favor of the customer and the broker. Defying all laws of probability, in almost every case, Defendants customers suffer losses as a result of slippage at grossly greater percentages than Defendant...

I never noticed that.

All in all, I'd crawl through a sewer of broken glass to get back to FXCM. Anyone with half a braincell could work around their tricks and the perks were well worth it.
  • #10,145
  • Feb 28, 2017 12:22am Feb 28, 2017 12:22am
Here are a couple screenshots illustrating the manipulation. I have at least a dozen of these shots. The bid and ask diverge for the purpose of triggering orders, but I can't tell if it's from FXCM or someone prior to them... though it seems only FXCM would have knowledge of my order. The date stamp is on the lower left corner.

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Attached Image (click to enlarge)
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The solution to this problem was to switch my orders around. Instead of selling low and buying high, I sold high and bought low. Using their manipulation against them worked just fine.
  • #10,146
  • Feb 28, 2017 1:42am Feb 28, 2017 1:42am
hello! i`m using FXCM already 2 years and i think all brokers have manipulation and this problem in all forex market? now only in FXCM!
  • #10,147
  • Mar 1, 2017 9:32am Mar 1, 2017 9:32am
Very satisfied with my new ECN broker. What a difference! No MM for me EVER!!
  • #10,148
  • Mar 1, 2017 9:41am Mar 1, 2017 9:41am
....................Also, I try to put Jason on my ignore list...Can someone help me to find the click button??
  • #10,149
  • Mar 1, 2017 11:17am Mar 1, 2017 11:17am
Quoting USATrader007
Very satisfied with my new ECN broker. What a difference! No MM for me EVER!!
Who?
  • #10,150
  • Mar 1, 2017 4:21pm Mar 1, 2017 4:21pm
Quoting FlyingTurtle
{quote} Actually, my old real account still works... just no money in it.
Thanks for point that out, FT
  • #10,151
  • Mar 1, 2017 4:40pm Mar 1, 2017 4:40pm
Quoting FlyingTurtle
{quote} BS! In 8 years I've never noticed that. What has happened is the software would display "Price cannot be hit" when using a market order sometimes. The last time that happened was in october when the sterling crashed due to the newbie trader at Citi http://www.zerohedge.com/news/2016-1...nd-flash-crash I had to use entry orders instead of market orders to buy near the bottom. Other than that, I've never, ever noticed slow execution. Never. {quote} The only error messages...
As I pointed out to USATrader007, the case he mentioned was dismissed in November of 2011: https://www.forexfactory.com/showthr...70#post9605470

While the nature of FXCM's settlement with the US regulators prohibits me from commenting on the specifics, I want you to know we continue to stand by the quality of our trade execution in general and our No Dealing Desk (NDD) forex pricing in particular.


Consider what happened on January 15, 2015 with the SNB flash crash:

The majority of retail forex traders were long EUR/CHF when the Swiss National Bank made their surprise announcement to abandon the 1.2000 exchange rate floor they had established for the pair. Had FXCM been on the other side of client trades, we would have made money when EUR/CHF dropped and retail traders took massive losses on their long positions.

The moved wiped out those clients' account equity as well as generated negative equity balances owed to FXCM of over $225 million. The caveat of our NDD model is that traders are offset one for one with a liquidity provider. When a client entered a EUR/CHF trade with FXCM, FXCM Inc. had an identical trade with our liquidity providers. During the historic move, liquidity became extremely scarce and shallow, which affected execution prices. This liquidity issue resulted in some clients having a negative balance.

While clients using NDD forex execution did not cover their margin call with us we still had to cover the same margin call with our liquidity providers. As a result, FXCM ended with a regulatory capital shortfall. Accordingly, FXCM needed to get a loan to cover this balance, which we did. For anyone that still thinks FXCM is running an FX dealing desk on our NDD model, the SNB event demonstrated that is not the case.


How does our NDD model work?

FXCM uses 16 liquidity providers to create a best bid best offer price stream for clients. LPs selected to price retail clients are forced to adhere to an extremely high standard of execution beyond just price including consistently low rejection rates, low latency, minimum quote sizes and high fill ratios even during market events.

Attached Image (click to enlarge)
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We discuss in our UK execution study the criteria we use to rank our liquidity providers which you can see listed in question 13 of the FAQ. FXCM's liquidity providers are ranked based on compliance to these standards which we identify as providing the best customer experience possible. Being a top ranked liquidity provider is important. Liquidity providers with the best pricing according to these rules may gain an advantage over other liquidity providers which could result in a large increase in orders captured. Poorly performing liquidity providers are ranked lower for order flow and ultimately could be removed from our platform until they return to compliance.

Also, the results of this study show FXCM UK retail client order prices to be better for FX than futures prices (74.97% of the time) and interbank prices(91.56% of the time).*

_________________________________

* The study does not in away way attempt to represent that FXCM maintains a particular capacity or performance level. The figures in this study are provided for information purposes only, and are not intended for trading purposes or advice. FXCM is not liable for any information errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Past results are not indicative of future performance.

Material Assumptions
FXCM's Retail Clients are defined as individual, joint, and corporate accounts trading on our retail price stream.

The comparison to each of the Futures and Interbank data is made at the time that the FXCM client order is executed. Normal market slippage and slippage due to rejections by liquidity providers are already included by the time the FXCM client order is executed. However, there is an assumption that there is no slippage on the Futures or Interbank market data.

In order to maintain consistency, Futures Market data and Interbank data used the same acceptable ranges in market trades. The summary of findings is based on the assumption that the maximum acceptable difference between the FXCM price and the Interbank/Futures market price is 5 pips in either direction.
Fees that a participant would pay on the Futures or Interbank market, such as CME Exchange Fees, NFA Fees, FCM Fees, Clearing Fees, and other commissions, were excluded from the study. Similarly, FXCM Commissions are excluded from the study.
  • #10,152
  • Mar 1, 2017 4:42pm Mar 1, 2017 4:42pm
Quoting FlyingTurtle
Here are a couple screenshots illustrating the manipulation. I have at least a dozen of these shots. The bid and ask diverge for the purpose of triggering orders, but I can't tell if it's from FXCM or someone prior to them... though it seems only FXCM would have knowledge of my order. The date stamp is on the lower left corner. {image} {image} The solution to this problem was to switch my orders around. Instead of selling low and buying high, I sold high and bought low. Using their manipulation against them worked just fine.
On our NDD model, we profit from client trading volume. FXCM wants clients to be profitable, so they can trade more. I'm glad you found a strategy that worked well for the market conditions you observed.

In regards to the spread widening you mentioned, this is due the prices from our liquidity providers changing. Even with price variations our NDD model takes the best bid and ask prices from competing liquidity providers as shown in my previous post. Note that the specific example of spread changes you circled on your chart show normal spread variations as prices update. The EUR/USD spread goes as low as 0.1 pip and doesn't get wider than 0.4 pips in the section of the chart you highlighted. This shows FXCM spreads are competitive: https://www.forexfactory.com/brokers.php#spreads
  • #10,153
  • Edited 8:28pm Mar 1, 2017 6:11pm | Edited 8:28pm
Quoting Jason Rogers
{quote} On our NDD model, we profit from client trading volume. FXCM wants clients to be profitable, so they can trade more. I'm glad you found a strategy that worked well for the market conditions you observed. In regards to the spread widening you mentioned, this is due the prices from our liquidity providers changing. Even with price variations our NDD model takes the best bid and ask prices from competing liquidity providers as shown in my previous post. Note that the specific example of spread changes you circled on your chart show normal spread variations as prices update. The EUR/USD spread goes as low as 0.1 pip and doesn't get wider than 0.4 pips in the section of the chart you highlighted. This shows FXCM spreads are competitive: https://www.forexfactory.com/brokers.php#spreads
Why is this Jason clown not banned yet?
Every idiot on this planet knows by now that FXCM and all the other crap broker in the link are bucket shops.
  • #10,154
  • Mar 2, 2017 5:07am Mar 2, 2017 5:07am
Quoting The-Flipper
{quote} Why is this Jason clown not banned yet? Every idiot on this planet knows by now that FXCM and all the other crap broker in the link are bucket shops.
Why do you want to be mean like that? Do you think Jason is being unethical or something?

Customer service was top notch at FXCM. I complained about the forced-switch to the commission model a couple years ago, so they lowered my commissions. Why would they volunteer to take less of my money if they are trying to take my money?

Like Jason, they were exceedingly professional and articulate whether on the phone or email. FXCM may have some problems, but if the staff are not genuine, then I don't mind being fooled so well.
  • #10,155
  • Mar 2, 2017 5:22am Mar 2, 2017 5:22am
Thanks for replying, Jason.

Quoting Jason Rogers
{quote} On our NDD model, we profit from client trading volume. FXCM wants clients to be profitable, so they can trade more.
Yes, I always believed that. It makes sense. If your client goes broke, he can't make you money.

Quote
In regards to the spread widening you mentioned, this is due the prices from our liquidity providers changing. Even with price variations our NDD model takes the best bid and ask prices from competing liquidity providers as shown in my previous post.

Is there any way the competing liquidity providers could know about my entry orders?

If not, then do you believe it was simply an algorithm "reaching" in places where there are likely to be stops and entries? It sure seems to me that action is sentient and not random. If you look again at my charts, you'll see the ask price reach higher at the tops and the bid will reach lower on the bottoms.
  • #10,156
  • Mar 2, 2017 5:34am Mar 2, 2017 5:34am
Quoting Jason Rogers
For anyone that still thinks FXCM is running an FX dealing desk on our NDD model, the SNB event demonstrated that is not the case.
What about after the SNB event?

My theory is they got a little desperate for cash and could have taken some liberties. I didn't like how the margin requirements changed seemingly randomly and on a whim about this past year. Before that (but after SNB), I was notified well in advance. As time went on, it's like they said "Oh heck, let's just do what we want." That suspicion is what allows me to believe some other shenanigans. I'm not saying FXCM is a bad broker, but just that the SNB event hurt them pretty bad.
  • #10,157
  • Mar 2, 2017 7:07am Mar 2, 2017 7:07am
Quoting FlyingTurtle
{quote} What about after the SNB event? My theory is they got a little desperate for cash and could have taken some liberties. I didn't like how the margin requirements changed seemingly randomly and on a whim about this past year. Before that (but after SNB), I was notified well in advance. As time went on, it's like they said "Oh heck, let's just do what we want." That suspicion is what allows me to believe some other shenanigans. I'm not saying FXCM is a bad broker, but just that the SNB event hurt them pretty bad.
The SNB event did hurt them pretty badly. In the end of the day, even after they sold off their assets to Gain Capital for $142 million and has generally paid off $238 million, FXCM still owes Leucadia another $155 million. Furthermore, the lender expects to receive up to 65% of future FXCM cash distributions after principal and interest are fully repaid.
  • #10,158
  • Mar 2, 2017 7:21am Mar 2, 2017 7:21am
Quoting FlyingTurtle
{quote} Why do you want to be mean like that? Do you think Jason is being unethical or something? Customer service was top notch at FXCM. I complained about the forced-switch to the commission model a couple years ago, so they lowered my commissions. Why would they volunteer to take less of my money if they are trying to take my money? Like Jason, they were exceedingly professional and articulate whether on the phone or email. FXCM may have some problems, but if the staff are not genuine, then I don't mind being fooled so well.
It seems like you're a bit out of touch with what FXCM actually is. Jason knew long ago the dirty tricks FXCM uses to scam retail traders, and yet he's continually posting wrong/misleading information about FXCM, trying to lure newbies into his bucket shop. Is that ethical? I don't think so.

But as said before, if you're happy being scammed, then continue with them. They need desperately clients as they're going down, and hopefully out of business soon.
  • #10,159
  • Mar 2, 2017 9:43am Mar 2, 2017 9:43am
What's the point of Jason? For real what's the point of Jason being on this forum? He will always be positively biased towards FXCM, will always speak good about it, will never say anything bad despite the overwhelming evidence...If an FXCM executive resigns and tells the public of all the illegal activities FXCM did, Jason will ignore that fact as if it never happened and will continue with his agenda. Do you see him saying that FXCM is a NDD despite the overwhelming evidence from the government that it is not. I suggest everybody completely ignores every single word Jason says because it's pure garbage. He will never ever give a true unbiased answer! Once he quits working at FXCM I would love for him to come back here and tell us the truth. Until then, forget about it.
  • #10,160
  • Mar 2, 2017 5:04pm Mar 2, 2017 5:04pm
Quoting FlyingTurtle
{quote} Why do you want to be mean like that? Do you think Jason is being unethical or something? Customer service was top notch at FXCM. I complained about the forced-switch to the commission model a couple years ago, so they lowered my commissions. Why would they volunteer to take less of my money if they are trying to take my money? Like Jason, they were exceedingly professional and articulate whether on the phone or email. FXCM may have some problems, but if the staff are not genuine, then I don't mind being fooled so well.
Thanks for the feedback, FT

I'm glad you were pleased with the service we provided for your FXCM US account.
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