Monday, April 8, 2013

FXCM Review

Today we will take a look at a broker which is listed on the New York Stock Exchange or NYSE. It is a very rare move for a forex broker to go through an initial public offering or IPO. FXCM decided to go the unusual route and went public. FXCM is the only broker we are currently aware of which has an active as well as successful listing, while we have heard rumors that PaxForex may play around with the idea and list on the NYSE as well (PaxForexplans to list on NYSE?).

Let’s take a closer look at FXCM and see what all the hype is about:
  1. FXCM is a well-establish and mature broker, trusted by plenty of forex traders. The company was founded in 1999 and has close to 15 years of operating history which in today’s online broker world means they stood the test of time.
  2. FXCM is listed on the NYSE and may offer the best amount of transparency in comparison to other online brokerages. New forex trader’s should be aware that the extra regulation FXCM needs to subscribe to in order to maintain its listing comes from the SEC and this does not necessarily translate into additional security for traders. Just be careful when it comes to this.
  3. FXCM is regulated. This is worse than plenty may think since so many scream and yell and live by regulation. The bad news is that this broker is regulated in the U.S. and the changes to regulation which ranges from leverage to hedging may be the one thing that many traders love, but could cause a rather huge outflow of clients who seek to move offshore where they are not forced to accept idiotic regulatory rules.
  4. FXCM offers their own trading platform which is a nice change away from the standard MT4 platform, they do offer the MT4 as well, which is also available as a web application.
  5. FXCM offers a great amount of currency pairs to traders which allows currency traders to create different strategies with a wide range of assets.
  6. FXCM is an ECN broker and has no dealing desk which is the best solution for professional traders as well as serious retail traders.
  7. FXCM offers programming services which allows traders to have their strategy coded and gives them their own expert adviser  This may be the best service FXCM has to offer, besides their ECN service, and is a true standout in the broker industry.

Now let’s take a look at the negative aspects of FXCM
  • They are regulated in the U.S. which is a big reason to avoid this broker. Regulation does not guarantee your safety as traders found out the hard way in recent history with MF Global as well as PFG Best to name two high profile cases. Flashback: The financial crisis started in the most regulated part of the U.S. financial system while the only unregulated part was the one and only outlet which functioned like it was supposed to.
  • They had a class action lawsuit against them for fraud as well as racketeering due to unfair trading practices.
  • FXCM settled a $2 Million fine with the NFA for slippage malpractice and a $6 Million fine from the CFTC as it did not pass on positive slippage to forex traders and basically robbed them of profits.
  • FXCM pushes their worthless demo accounts too much which is rather sad for a seasoned forex broker.
  • FXCM does publish daily trading signals, but sadly they are delivered through their affiliate DailyFX which is a major setback.


FXCM is a season forex broker which is listed on the NYSE which is a great move on behalf of them. They are an ECN broker and their best feature is the programming service. They also offer their own trading platform.

They have a known history of treating forex traders unfair, despite being regulated. This is a red flag and shows that despite regulation they have found ways to manipulate their forex traders which is enough reason for The Last Bear to recommend traders to stay away from this forex broker. On top of that they are abused by the U.S. regulatory system which puts idiotic limits on everything from leverage to hedging. Two thumbs down, The Last Bear has roared!


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