Oanda versus FXCM

@evolutioncapital

Oanda has the best reputation of all the fx brokers, I think it's a bit short sighted and unfair to simply class them as a 'bucket shop, stay away'.

theHand posted:
@evolutioncapital

Oanda has the best reputation of all the fx brokers, I think it's a bit short sighted and unfair to simply class them as a 'bucket shop, stay away'.

I guess my comment was a little harsh. From a scalpers perspective, Oanda WILL take you to the woodshed. If you are a swing trader then Oanda's dealing desk isn't as much of an issue. There are better brokers IMO (FXCM, MBtrading.. etc).

jasonrogers posted:

evolutioncapital posted:
I like FXCM but their commission is quite expensive if you're a scalper.

@evolutioncapital below is a spread comparison of US brokers that includes commissions. Click here for the live table: https://www.myfxbook.com/forex-broker-spreads





As you can see above, even when you include commissions, FXCM's spreads are very competitive. Furthermore, on our No Dealing Desk (NDD) forex execution model, we make money off your trading volume, not your losses. This business model means that scalpers are some of our best clients because of the trading volume they generate. If your monthly volume exceeds 50M notional, you can qualify for discounts on commissions which mean even lower transaction costs than you see above.

If you would like to hear more about these commission discounts and other benefits available to active traders, please email [email protected]

The typical EURUSD spread when I'm trading with mbtrading is around 1.1 pips. There is a $.30 commission round trip per lot traded. They have a 'pay for limits' system that pays you for making limit orders which reduces the trading costs substantially. Even if I don't close an order in profit, I don't have to pay to close the trade. MBtrading also does not have FIFO.

I am also running a demo account now with FXCM with the same algorithm and there is a large difference between results with my mbtrading account. My algorithm itself is profitable with FXCM (using the exact same settings as my mbtrading algo) but the account balance is being eaten alive by the $.8 round trip. I am still tweaking my algo for FXCM to see if I can overcome the cost issues. Your costs are a bit better with other currencies than mbtrading but as for now, I am only working with EURUSD. There is a good chance that I will be opening an account with you guys in the future.

evolutioncapital posted:
I am also running a demo account now with FXCM with the same algorithm and there is a large difference between results with my mbtrading account. My algorithm itself is profitable with FXCM (using the exact same settings as my mbtrading algo) but the account balance is being eaten alive by the $.8 round trip. I am still tweaking my algo for FXCM to see if I can overcome the cost issues. Your costs are a bit better with other currencies than mbtrading but as for now, I am only working with EURUSD. There is a good chance that I will be opening an account with you guys in the future.

@evolutioncapital I'm not sure I understand your comment about being eaten alive by commissions. They are just one part of your total transaction costs along with the spread. You said your current broker has a 1.1 spread on EUR/USD and 30 cent round turn commission. That would add up to $1.40 in total transaction costs. FXCM's average EUR/USD spread is 0.2 pips which when combined with 80 cent round turn commissions adds up to $1.00 in total transaction costs. You can confirm this on the live spread table here on Myfxbook: https://www.myfxbook.com/forex-broker-spreads

evolutioncapital posted:


The typical EURUSD spread when I'm trading with mbtrading is around 1.1 pips. There is a $.30 commission round trip per lot traded. They have a 'pay for limits' system that pays you for making limit orders which reduces the trading costs substantially. Even if I don't close an order in profit, I don't have to pay to close the trade. MBtrading also does not have FIFO.

I am also running a demo account now with FXCM with the same algorithm and there is a large difference between results with my mbtrading account. My algorithm itself is profitable with FXCM (using the exact same settings as my mbtrading algo) but the account balance is being eaten alive by the $.8 round trip. I am still tweaking my algo for FXCM to see if I can overcome the cost issues. Your costs are a bit better with other currencies than mbtrading but as for now, I am only working with EURUSD. There is a good chance that I will be opening an account with you guys in the future.

Hi Evolutioncapital,
I'm curious why you are considering leaving MB trading, if it is going well there? I've dealt with them myself but didn't care for their CS, and their spreads went crazy during high volatility events compared to another broker I was also using.
Thanks
John

You are right if I was trading on the regular spread based account through mbtrading. However, the 'pay for limits' account works differently. For instance if I scalp 4 pips with 1 lot, I receive a $.70 reimbursement which then lowers the total cost to $.70 for that trade.

This conversation actually made me realize a problem with my algorithm when it is trading on the FXCM account. I need to adjust some calculations to take the tighter spread into account. It is opening long trades later than it should because the ask doesn't reach the target price as quickly as mbtrading due to mbtradings larger spread. I will make the adjustment and hopefully the performance will be much better.

jasonrogers posted:

evolutioncapital posted:
I am also running a demo account now with FXCM with the same algorithm and there is a large difference between results with my mbtrading account. My algorithm itself is profitable with FXCM (using the exact same settings as my mbtrading algo) but the account balance is being eaten alive by the $.8 round trip. I am still tweaking my algo for FXCM to see if I can overcome the cost issues. Your costs are a bit better with other currencies than mbtrading but as for now, I am only working with EURUSD. There is a good chance that I will be opening an account with you guys in the future.

@evolutioncapital I'm not sure I understand your comment about being eaten alive by commissions. They are just one part of your total transaction costs along with the spread. You said your current broker has a 1.1 spread on EUR/USD and 30 cent round turn commission. That would add up to $1.40 in total transaction costs. FXCM's average EUR/USD spread is 0.2 pips which when combined with 80 cent round turn commissions adds up to $1.00 in total transaction costs. You can confirm this on the live spread table here on Myfxbook: https://www.myfxbook.com/forex-broker-spreads

You are right if I was trading on the regular spread based account through mbtrading. However, the 'pay for limits' account works differently. For instance if I scalp 4 pips with 1 lot, I receive a $.70 reimbursement which then lowers the total cost to $.70 for that trade.

This conversation actually made me realize a problem with my algorithm when it is trading on the FXCM account. I need to adjust some calculations to take the tighter spread into account. It is opening long trades later than it should because the ask doesn't reach the target price as quickly as mbtrading due to mbtradings larger spread. I will make the adjustment and hopefully the performance will be much better.

evolutioncapital posted:
This conversation actually made me realize a problem with my algorithm when it is trading on the FXCM account. I need to adjust some calculations to take the tighter spread into account. It is opening long trades later than it should because the ask doesn't reach the target price as quickly as mbtrading due to mbtradings larger spread. I will make the adjustment and hopefully the performance will be much better.

Thanks for the clarification. Here's hoping those adjustments do the trick for you!

Hi Evolutioncapital,
I'm curious why you are considering leaving MB trading, if it is going well there? I've dealt with them myself but didn't care for their CS, and their spreads went crazy during high volatility events compared to another broker I was also using.
Thanks
John
It is the instability of the spread during high volatility that I am having trouble with when using MBtrading. FXCM appears to have a better execution speed and is more liquid. Which other broker are you referring to?

OANDA

Pros:
- They allow you to trade in exactly the amount of units that you want, not being forced to trade in lots, minilots or microlots.
- They offer MT4 and fxTrade, which is not a bad platform. However fxTrade's grids sometimes are not clear enough to see in one sight all the details of the trade.
- As they offer MT4 you can monitor and have open as many charts as you want.

Cons:
- Don't close daily candles with NY session close, which is a big problem at least for me.

FXCM

Pros:
- They offer NY session close for daily bars.
- Trading Station II looks like a nice platform, I'm doing chart analysis there and quite good. Please note that I use Price Action so I don't need too many and complex indicators, just channels, support, resistance, SMA and ATR, I think.

Cons:
- You can't trade the exact amounts of units that you want. The smaller piece of units is a microlot (1000 units).
- By default you can only monitor a maximum of 18 pairs. In a standard live account (more than $2K) you can ask them to change this, but in the demo one you can't.
- In the demo account you are given $50K and a leverage of 200:1, which is completely unrealistic. You can't change this by yourself, you have to ask them to do it, but even that, the minimum leverage that you can have is 30:1

fx_book posted:
FXCM

Pros:
- They offer NY session close for daily bars.
- Trading Station II looks like a nice platform, I'm doing chart analysis there and quite good. Please note that I use Price Action so I don't need too many and complex indicators, just channels, support, resistance, SMA and ATR, I think.

Cons:
- You can't trade the exact amounts of units that you want. The smaller piece of units is a microlot (1000 units).
- By default you can only monitor a maximum of 18 pairs. In a standard live account (more than $2K) you can ask them to change this, but in the demo one you can't.
- In the demo account you are given $50K and a leverage of 200:1, which is completely unrealistic. You can't change this by yourself, you have to ask them to do it, but even that, the minimum leverage that you can have is 30:1

@fx_book I'm glad you like FXCM's Trading Station platform and charts. 😄

It's worth noting that the reason our minimum trade size is 1 micro lot (about 10 cents per pip) is because that's the smallest order that can be offset using No Dealing Desk (NDD) forex execution. While dealing desk brokers can accept smaller order sizes, it's because they take the market risk on the other side of your trades. That means a loss for your could mean a profit for them, or that a profit for you could mean a loss for them.

On the NDD model, FXCM does not take a market position, eliminating a major trading conflict of interest. Dealing desk brokers may actively trade against your positions. They can profit when you lose. Alternatively, they may lose when you profit. Because of this, dealing desk brokers are incentivized to manipulate your orders. They may for example place restrictions on stops and limits or re-quote your orders.

FXCM's NDD execution model does none of this. Your orders automatically fill from the NDD price feed, which is the best available bid and best ask prices from all of our liquidity providers. Additionally, your orders are anonymous to the liquidity providers. They cannot see your stops, limits, or entry orders; they only see market orders coming from FXCM.

In addition, you mentioned that you liked using the MT4 platform. FXCM offers this too. With an FXCM MT4 demo account you can view information for more than 20 currency pairs at the same time. Simply right-click on the Market Watch window and select Show All. Furthermore, the leverage is not limited to 30:1 unless you're using an Canadian demo, and that's to comply with Canadian regulations. If you wish to trade with higher leverage, you can set up an MT4 demo by following the steps below.

1. Download the free FXCM MT4 platform: https://download.fxcorporate.com/FXCM-MT4Install.exe
2. On your MT4 platform, go to File > Open an Account.
3. Select the trading server FXCM-USDDemo01 and hit Next.
4. Select New demo account and hit Next.
5. When filling in your details, please select UK for your Account Type.

Mmmm...


You guys do know this debate got settled by CHF ?

FXCM took $250 000 000 bath on that and for all practical purposes is insolvent. They had to borrow $300 000 000 just to keep going and is up for sale. It will take them years to pay back that loan in a best case scenario. Next time there's an event like that, which is very likely in current market conditions, they're gone.

So the bucket shop came out smelling like roses while the listed ECN behemoth barely scraped trough.

I wouldn't touch FXCM with a bargepole right now. The sharks are circling already.

No offense @jasonrogers, I know you're just doing your job, but the facts are the facts. FXCM is in a very deep pile of poop.

Just to put things into perspective and admittedly this is the first link that comes up when I google FXCM's profit, there might be more up to date info, non the less....:

'Overall, FXCM reported earnings of $2.1 million, or five cents a share, down from $6.9 million, or 24 cents a share, a year earlier.'

https://www.marketwatch.com/story/fxcm-profit-down-70-as-trading-revenue-falls-2014-05-08

This is the revenue from a company that had to make a $300 000 000 loan to meet their legal obligations...

interesting thanks for the contributions

jasonrogers posted:

Hi Jason,
Could you comment on the recent Euro slams effects at FXCM and what FXCM has done to prevent a repeat. Specifically the concern is for USA clients who are victims of the over leveraged off-shore higher leveraged accounts at FXCM.
I realized FXCM bailed out many of it's clients after it occurred, but that in itself also concerns me. Because what then will stop them from doing it again? If they didn't have to pay for their margin call's or even get one, then why wouldn't they do it again?

I noticed after the event the 'Active Trader' minimum at FXCM went from $5,000 to open an account up to $25,000.
 Any further info you can share on the changes and causes, would be appreciated.
Thanks
John

theHand posted:
Mmmm...


You guys do know this debate got settled by CHF ?

FXCM took $250 000 000 bath on that and for all practical purposes is insolvent. They had to borrow $300 000 000 just to keep going and is up for sale. It will take them years to pay back that loan in a best case scenario. Next time there's an event like that, which is very likely in current market conditions, they're gone.

So the bucket shop came out smelling like roses while the listed ECN behemoth barely scraped trough.

I wouldn't touch FXCM with a bargepole right now. The sharks are circling already.

No offense @jasonrogers, I know you're just doing your job, but the facts are the facts. FXCM is in a very deep pile of poop.

I believe it's non-core assets their selling. Not the retail side.
the bucketshops did come out like a rose, but at the expense of their clients, I think that stinks even worse than a pile of poop.

They profited from their clients losses, and direct conflict of interest which should be offered back in rebates imo.

@moneycoder

At what expense to their clients ?

They didn't go after the negative deposits and the guys who made money kept it. Clients won both ways mate. Rumor is O also made a loss, something like $10 mil....

It's really simple, FXCM is in the dwang, O isn't, doesn't really matter why.

If I had to chose a broker right now, considering the markets that are coming, Greexit, US arming Ukraine etc. I'd take the broker that didn't dig themselves into a $300 mil hole on what was a relatively small event. The big events are just around the corner.

IMHO, the CHF travesty was a major event. Directional volatility was up over 1000% on CHF pairs. You'd be hard pressed to find another event like that in the last 10 years.

250mio is a lot of money to lose, but it does prove a few things :
1. they are NOT a bucket-shop
2. they are a business worth saving, and it took less than 72 hours for investors to decide
3. even in the thick of it, clients were able to move 5-6 figure amounts out without hassle

Disclosure : I have multiple client and accounts at FXCM, which I use only for execution.