FXCM reviews – Is FXCM regulated?

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What is FXCM?

FXCM is perhaps the best-known forex broker in the world and one of the most important, being founded back in 1999.

However, this broker nearly broke the forex black Thursday on January 15, 2015, with the unexpected and devastating move in the Swiss franc.

FXCM suffered huge losses and I had to be rescued at the last minute by Leucadia, a large financial group to which the Jeffereis group belongs.

Despite such a fateful day, FXCM has been able to continue serving its clients, although we do not know how it will have affected its global portfolio and whether it will continue to be the largest retail broker in the West and third in the world.

Before January 15, FXCM was the world’s third largest forex broker, behind only the Japanese giants GMO and DMM.

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FXCM is one of the first forex brokers to hit the market in the United States in 1999, and one of the few that managed to survive independently and ultimately achieve world leadership.

Open account with FXCM

Opening an account with this broker is really easy because we will only have to enter our personal information on its website and wait for the confirmation email to be sent to us.

Once we confirm this email we can proceed to download the platform and with the next verification step: prove our identity and residence. To do this, simply send copies of our electricity, water, telephone or bank statements and our identity document.

Then we can proceed to make the deposit.

We can open a Metatrader 4 account from $ 50.

FXCM services and resources

FXCM offers a wealth of educational and informational services.

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Among them:

  • Regular online seminars
  • Trading guides: «New to Forex», «Characteristics of successful traders», «From stocks to FX»
  • Video library with various videos on trading and Forex

The resources are: 

  • Daily charts
  • Market Scanner
  • Daily technical levels
  • Market news
  • Economic calendar
  • FXCM Plus, where we will have trading signals and technical analyzer

FXCM markets, platforms and commissions

The platforms that FXCM offers are the FXCM Trading Station, The Metatrader 4,  the Ninja Trader, and the Mirror Trader.

This brokerage offers trading in forex and CFDs on indices and commodities.

Despite its large size, the company does not offer CFDs on stocks, having preferred to focus on its favorite forex market.

FXCM offers trading as a market maker for its retail accounts in the form of no money table intermediation. This ensures that FXCM will not manipulate prices in any way.

To make this happen, the American NFA strictly monitors the brokers that are under its regulation, including FXCM.

Therefore, the FXCM spreads on its offer without a money table are a little higher than the market average, but in return we will have peace of mind that there will be no strange things.

The leverage for European traders is as follows:

productsNew leverage
Main Forex pairs30: 1 or 3.33% margin
Main indices, gold and minor Forex pairs20: 1 or 5% margin
Lower indices, commodities and exotic Forex pairs10: 1 or 10% margin
Actions5: 1 or 20% margin
Cryptocurrencies2: 1 or 50% margin

For traders from outside Europe, other margin levels may be applied.

FXCM also offers the possibility of trading a professional account in its Active Trader model, in which we will be able to trade with much better spreads and under real market conditions (ECN). In this plan, FXCM will apply an initial commission of 8 USD round turn, or 4 USD per traded lot.

In order to operate in this model, you must open an account with more than 25,000 USD or trade more than 10 million nominal dollars a month.

How are the commissions at FXCM, the Forex broker that was once the most popular in the world?

This is a broker that I know well and with whom we have had an account on several occasions.

What I can say is that the commissions have not changed much over the years.

Nor is it that we can find much information about them or the spreads on the FXCM website.

Years ago the broker had more information about it.

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Risk warning

It is only through the use of FXCM accounts that we can learn about commissions.

On the web they only have the data of the ActiveTrader account, for high volume traders, who also no longer have commissions as before, but only the cost of the spread.

FXCM spreads

Let’s look at the spreads (commissions) of the standard and Active Trader accounts at the end of 2018:

Standard AccountActive Trader
EURUSD2.10.4
GBPUSD2.51.1
AUDUSD3.40.6
USDJPY2.10.5
GBPJPY5.82
EURGBP4.10.7
EURJPY3.81.1
AUDJPY4.30.9

As we can see the differences are substantial between the two accounts.

In my opinion, they are too large to continue offering a competitive service in the standard account.

The Active Trader account is fine, but not everyone has more than $ 20,000 to open Forex or CFDs.

The standard account is the one that serves to compete in the international broker market and it leaves a lot to be desired.

Of course with these spreads it is not possible to make successful scalping strategies.

You have to do medium-term trading or swing trading, which is not bad because it is a better style for traders.

FXCM indices commissions

Index trading will also have no extra commissions but only the spread will be paid as a trading expense, which is the effective commission that FXCM charges.

Let’s look at their spreads:

Spread
Dow Jones2.18
SP 5000.48
Nasdaq0.9
DAX 301.11
UK 1001.09
CAC 401.14
IBEX 357.65
Nikkei 22511.16

Index spreads are more competitive but still far from those of competitors.

For example, today we can find 5 points in the IBEX 35 brokers as Admiral Markets , XTB or Dukascopy .

As for the DAX, it is closer to the competition but it still needs to be one of the best brokers in the German index .

But the worst thing is not this but the problem of the constant expansions of spread that we can observe in the real accounts.

For example, the 0.90 spread on the Nasdaq widens to 4 or 5 steadily, making the effective cost of trading to be that.

With these conditions, we cannot recommend trading in this broker, since most international brokers offer a constant spread and without variations, or at least not of the magnitude of those we see in FXCM.

FXCM raw material commissions

Spreads
Copper00.3
Gold0.36
Silver0.043
WTI Oil0.05
Brent Oil0.05
Natural gas0.01
Soy0.79

In raw materials, things are also closer to what we can expect from this broker, but they are still far from the best brokes on the market.

They are better than those of brokers like eToro or Ayondo , but in these cases these brokers offer other resources and services that make them much better options than FXCM.

FXCM Bitcoin spread

The bitcoin spread today is 30.

In this case we are facing the best market that FXCM offers, since its spread is no longer much worse than that of other CFD brokers in the sector.

In fact, as I am seeing it right now, the spread is close to 25.

FXCM reviews

This is one of the brokers with the highest number of opinions on the net, which is not surprising as it is one of the oldest and largest brokers in the world Forex market.

We can find disparate opinions of all kinds in various national and international sites such as rankia , trading united , x trader, forex factory , elite trader , etc.

This is one of those Forex brokers that we can trust. With FXCM we are never going to hear problems that they do not return our money or things like that you can hear from other brokers.

FXCM was heavily fined in its day by the American CFTC and NFA for some practices of applying negative slippage to clients, but not positive slippage.

After the first years of the sector in the United States, and due to these practices, the sector has become quite professional, being in that country, where forex brokers have more strict surveillance.

So we can trust that when we choose an American broker like FXCM, we will have guarantees that the level of fraud will be lower than in any other case.

Although this does not avoid the risk of bankruptcy, to which it is subject like any other company.

In fact, the events of that fateful January 15 prove us that FXCM was operating in a rather diaphanous way, since its losses came related in its professional platform Active Trader and FXCM Pro, where many traders were short in the Swiss franc, having that the company assumes part of the losses that they had.

This is so because FXCM had to respond to its counterparties on those professional platforms.

In other words, FXCM was operating in the market and not as a market maker for those accounts. Curious question, because in this “Black Swan” of the franc, market makers were the best unemployed.

Today if we lose money with FXCM it will be due to our bad trading or because the broker breaks one day, as it was about to happen on January 15.

Hopefully it will recover soon and return to lead the sector in western markets.

The 2017 FCTC setback has not helped the broker much lately.

FXCM reviews

the broker is still active in international forums, such as the Forex Factory, where the broker’s thread is one of the most active, with constant participation by broker representatives who answer all the questions that are asked.

 

My opinion of FXCM

FXCM has certainly lost a lot of ground in recent years.

First the terrible episode of 2015 that almost made him disappear.

And then the CFTC issue, the accusations of bad practices and the march of the North American market.

Regarding the conditions and trading products, the broker has undoubtedly lagged a bit behind as it cannot compete with the best brokers on the international market.

For example, the last spreads that I saw of gold, at 0.45 USD, is much more expensive than that of the vast majority of world brokers.

Other high spreads are found in the standard accounts, such as 3.4 pips for AUDUSD or 4.1 for EURGBP, something that seems too much to compete in the world market.

As a positive point of recent times is the inclusion of the Ninja Trader platform.

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