Does FXCM trade against it's client?

Question

I heard so many bad Dealers out there....Is FXCM one of them....Are they trade against their client's position?

When I place a buy order....Does it mean I buy from FXCM or I directly buy from Banks but via FXCM as the representative?

Could somebody please explaine....

Answer 1

Here is a thread from one of the more popular trader's forum on the internet. Members rate FXCM based from their experience with that firm: http://elitetrader.com/br/?action=view&R...

Here are different brokers that are also rated by the members: http://elitetrader.com/br/

It is true that fx brokers trade against their clients--meaning that they take the opposite end of the trade. When you are buying, they are selling. When you are selling they are buying. They base their rates from the prevailing market rates. Your orders cannot and will not go direct to the spot market as it is too small. Your broker, fxcm, acts as counterparty to all your trades.

Hope this helps!

Jim http://jsforex.blogspot.com

Answer 2

See buying a trading system is so much easier man. That's why I did it.

What you do (and what I did) is make sure the trading system has a 60 day money back guarantee first; then make sure you can use a demo account. A demo account let's you play the trading game with "play money" so you can see if you can profit from the trading system without investing your real cash.

Use the demo account for 59 days and if you see you can make profit you keep the system and invest your real cash. If there's no profit to be made you get a refund; there's literally no risk when buying one.

If you're interested I found reviews of the top 3 Forex trading systems: http://forex-tracer.the-perfect-solution...

Answer 3

There are two divisions of FXCM. Like many other FX dealers one of the divisions has a "trade desk". Trade desks are known for "stop" hunting. On the other-side the stop prices are usually guaranteed.

You can ASK for the "No Trade Desk" trading. It's cheaper but more dangerous. Unfortunately most of the new FX traders have no real trading experience. The brokers tend to make it look easy to be rich.  Even after reading a dozen books on FX... you still need to read more. Paper trading is helpful.... but it has little relationship on how you'll do with real money.

All FX brokers are bad.  Your job is to find the least bad for what you want.

Don't lose site of the fact that most new FX traders lose their accounts in the first 3 months. Most of the rest are gone after a year.

To be truly successful you'll need years of "technical analysis" experience.

Good luck,

[e-mail]

Answer 4

The FX companies that you see are not brokers.  They are dealers.  They make a market in currency by taking the other side of your trade.  They makie money by keeping the longs equal to the shorts and pocketing the spread between the bid and the ask.  If their own customers get out of balance, thay can protect themselves with an offsetting position with a bank.

You can't real directly with banks (except for the ones that have retail forex units).  The inter-bank market is wholesaler and they want million dollar deals.

Answer 5

I havent heard too many good things about FXCM but its prob better than some other bucket shops. In FX you arent actually interacting with the market, you are buying from FXCM the banks DONT care about orders less than a million. The two most reputable FX brokers out there are Oanda and Interactive Brokers. I use IB and I am very satisfied in terms of platform and executions. Also IB is mostly a stock, options, and futures broker so they wouldnt sacrifice their core business and reputation to scam a few grand from FX accounts.

There are legitimate brokers out there, but I dont think you can interact with the true liquidity of the FX market place without millions and a direct bank hook up with Goldman Sachs or some other high grade bank broker.