FXCM Group, which stands for Forex Capital Markets, is a financial company founded in the United States and one of brokers with a long history providing online trading for forex, indices and commodities.
The group claims to hold offices at the major financial world centers and to have more than 132,000 active accounts worldwide as of beginning of 2017. The US broker is regulated by financial authorities in many countries.
FXCM offers 4 trading platforms including Metatrader 4 (MT4) and their own developments.
There are three categories of accounts:
- Mini account requires a minimum deposit of GBP50 and provides minimum deal size of 1,000 and maximum leverage of 1:200. There are 21 currency pairs and 18 index/commodity instruments available for trade. The typical spread for EUR/USD is 1.5 pips and all orders are executed via a dealing desk;
- Standard account requires a minimum deposit of GBP5,000 and provides minimum deal size of 1,000 and maximum leverage of 1:100 for currency pairs. There are 39 currency pairs and 18 index/commodity instruments available for trade. The typical spread for EUR/USD is 0.5 pips but clients pay some commission for every deal. Forex orders are No Dealing Desk (NDD) executed;
- Active Trader account is intended for high-volume traders. It requires a minimum deposit of GBP25,000 and provides minimum deal size of 1,000 and maximum leverage of 1:100 for currency pairs. There are 39 currency pairs and 18 index/commodity instruments available for trade. The typical spread for EUR/USD is 0.5 pips and commissions are reduced up to 50% of those in Standard account. All forex deals are NDD executed.
FXCM describes in its Execution Risks document that orders may be subject to slippage due to an increase of volatility. The broker offers the Market Range (or Market Deviation) feature on its platforms. The market price must be within the range defined by the customer, otherwise market order won’t be executed. Additionally, stop loss orders are not guaranteed and if there is a gap, they will be executed at the first available price. Moreover, this broker doesn’t provide negative balance protection and if margin calls are triggered, the account balance could become negative and clients would owe money to the company.
FXCM has suffered huge regulatory problems recently. The broker received a significant loss two years ago, when the Swiss National Bank (SNB) surprisingly removed the minimum exchange rate of the EUR/CHF pair, and the Swiss franc jumped rapidly. At the beginning of February 2017, the company was fined on charges from US Commodity Futures Trading Commission (CFTC). The group was forced to pull out its registration from CFTC and agreed not to register again. Thus, the company was forbidden to trade in the USA. After these events, traders will probably be more careful when opening accounts with this broker.