Trades aren't executed "back to back with a global bank or financial institution", they're executed with FXCM as counterparty. FXCM make up the prices on which they are prepared to deal, and as stated those prices might not be the best prices avaliable. What they do with a trade or their nett exposure after that is immaterial. You're counterparty. You decide by how much the quotes you receive from your liquidity provider(s) should be adjusted before reaching the clients platform, in other words it's FXCM who decide the prices which traders can trade on. FXCM's agreement clearly states "THE PRICES FXCM OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE" The impression you're trying to give here is misleading (nothing new for FXCM if you consider their NFA regulatory action history!) If you're here to assist existing customers then great, but if you're here to solicit new clients then you probably need to be aware of 2-36 ("....initiates, spreads, or condones statements that convey false information..."), I understand you're already on thin ice after your FIFO fiasco regarding stops and limits! That's assuming you are actually an FXCM representative!
Fair enough, Jason. The platform chosen should reflect ones intentions, regarding commission/spread structure. Are you a short or long-term trader?
Personally, I'm a long term trader. I traded short term when I first started out but have changed to long term as my trading strategy (and time constraints have changed) over the years.
FXCM doesn't make up the price on the no dealing desk accounts. It's not as though the price feed is aggregated with one dealable price sent out on the other side. If Bank A is quoting the best bid, that is the price you see on the bid, plus a pip markup which is how FXCM is making profit. If Bank B then has the best bid, then the bid will get replaced with Bank B plus a pip markup.
According to the FXCM agreement your statements here are incorrect and misleading.... Apart from that, you're contradicting yourself.... "FXCM doesn't make up the price on the no dealing desk accounts", and then you say quotes are "plus a pip markup which is how FXCM is making profit." In order to add a pip to the spread you need to adjust quotes, therefore it's FXCM who are ultimately deciding the quotes which traders can trade on. That's leaves the opportunity to adjust quotes according to your book and they may only loosely reflect your liquidity providers quotes. On top of that you reserve the right to offer different quotes to different clients! Same crap just packaged differently.
If you're picking out individual paragraphs and taking it out of context then you're misleading the forum. This is exactly why I'm here on the forum because the way you single out one paragraph does not explain FXCM's execution and does a disservice for someone looking for factual information. The trading agreement explains that FXCM is the counterparty for each individual trade and then explains that each order is immediately offset 1-for-1 with the banks. Whenever you place a trade, the bank does not recognize the position coming from "cabletrader" and will not contact you to perform on that contract. The bank does not recognize yourself individually as the counterparty on a trade. That is why in the end, FXCM has to be the counterparty acting on your behalf to get into the trade since you do not have direct relationships with the bank. Plus this makes you anonymous since the banks see all trades as coming from FXCM. Orders cannot be singled out. Being the counterparty does not mean that FXCM is profiting when you lose. The trading agreement is very clear on this and explains why. Different prices can be offered to different clients based on how you have the spread/commission structure setup. And the commission is negotiable for our active trader clients, since we reward higher volume traders. Jason
I didn't suggest they did. Bottom line is FXCM make up the quotes they display, and those quotes might not be the best prices available. It's your company's agreement, it's all there in black and white. You're counterparty. You decide by how much the quotes you receive from your liquidity provider(s) should be adjusted before reaching the clients platform, in other words it's FXCM who decide the prices which traders can trade on. FXCM's agreement clearly states "THE PRICES FXCM OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE" End of discussion basically, as always 'caveat emptor', don't be misled by a rep posting on trading forums
Anyone know how their newer offering the "institutional" price feed of their Active TRader is performing? At first I heard it was only for large account but now I hear that any size and any lot size is open for trading on it...so I have to wonder if its still a institutional spread