My broker is FXCM and for the most part my experience with them has been okay. When trading from home I use their charts, but when I'm away I use the iphoneforex.com website run by CMS for price data. Last night (March 18) I was trading on my phone. I called FXCM and I entered a long EUR/USD position at 1.5647 with a stop at 1.5615. This was done at 17:50EST. After a couple hours the trade was doing good (or so I thought) so I called FXCM to move my stop up. They informed me that my trade had been stopped out. This really confused me since, according to the CMS charts on my phone, the price never came close to my stop. I knew prices can sometimes differ by a little so I got onto a computer to check what FXCM's charts said. This is when I got even more confused. On the FXCM chart there was a very sharp 25-30 pip spike downward to 1.5612 at 18:37EST that did NOT show up on the CMS charts at all. So I called FXCM and talked to customer service. What they told me is about what I expected them to say. They said they get quotes from a large number of banks, they use the "best" price available (best for them?), and that the downward spike was valid since "orders were filled." I wasn't accepting the explanation so the guy looked up the spike on a tick chart. He told me that the market was trading around 1.5638, spiked down to 1.5612 for a couple of ticks, then back up to 1.5638 and continued to trade normally like nothing ever happened. I had the trade audited and the person I spoke to in their auditing department looked up the trade on his Bloomberg terminal. He said that, while there were "very few" banks that actually traded at 1.5612 (which means there were many that did not), the price was still valid and essentially that I'm SOL. Had this very strange spike never materialized, it would have been a very good trade (60-120 pips profit). Instead I took a 32-pip loss. And like I said, the only independent price feed I have (from CMS) doesn't show the spike at all. So now I'm left wondering what to do. I've been trading the EUR/USD cross exclusively for a couple years, and this strikes me as an extremely odd circumstance. I'm aware that forex dealers have bucketshop reputations, but this is the first time I've felt like I've personally encountered anything along these lines. I want to keep trading but don't feel like I can trust FXCM's price data. Where would you go from here? Futures is the obvious answer but being able to check prices on my iPhone and place trades over the phone is one of the reasons I'm trading the forex spot market. What does everyone else think? Open to any and all advice. Thanks!
Good post. Im new to trading and interested in trading Forex but the main thing that holds me back is the fact that a large majority of brokers are considered to be what many forex traders call Bucketshops. From what you said on your post i think a good idea (i might be wrong) would be to trade without stops and get quotes from another service that has nothing to do with making money in forex trades, it just feeds you the pure data. like i said i might be wrong (Im a noob to FX ATM) but what do you guys think?
What independent price feeds are available for the currency spot market? I've never looked into them but now that I smell a rat I'm very interested. Also, how much do they cost on a monthly basis?
Dont know if there's are independent price feeds. Im not sure but i think esignal has forex quotes but ill search around and post what i come up with. If i do decide to trade Forex i would definitely look into getting a independent price feed if there is any. if there aren't any independent price feeds for forex one thing you can do is have a small forex account with another broker just to compare there data on the event of a large spike. Like if you get a sharp spike on your actually broker and only a small spike or none at all with the back up broker that can be a red flag.
If it's any consolation this is a 15min MT4 chart and the low Bid was 1.5612 at that time, I don't think on this occasion they ran your stop. I wouldn't get too paranoid about it unless it happens on a regular basis but FXCM, as a marketmaker, quote prices at which they are prepared to deal and they don't always reflect other broker's quotes or the underlying market. That's not unique to FXCM, it's just the way retail forex works unfortunately. Conspiracy theorists will have other ideas and probably tell you it's the broker out to get your cash! Metatrader has a free mobile platform for PDA's and Win Mobile phones, AlertFX have a free price alert by SMS which is useful, plus there are others, all free.
Thanks for taking the time to reply. The spike I am referring to does not show up on your chart. I have attached a pic of the one that stopped me out of my trade. The fact that it does not show up on the MT4 chart just deepens my suspicions. Thanks, I am going to look into these.
Are you sure that's the right bar for that time, isn't it the two lows before that? I see what you mean about that spike though, was it cleaned up after or is it still on their chart?
In my original post I may have gotten the time wrong, since the FXCM charts, the CMS charts, and the "official" log of my trade are all using different time zones. But I bought on the bounce after the two previous lows at 1.5612, and it was the spike that I highlighted that stopped me out of my trade. http://www.dailyfx.com/charts/ChartStation.html The spike is still on their charts. If you visit the link above you'll be able to see it. What would be the smartest way to contest the trade with FXCM? In the FXCM reviews on this site, one person got FXCM to refund their trade after they proved that their stop was not hit on Bloomberg after FXCM had claimed that it was. Similar situation to mine. FXCM also claimed that the price was hit on Bloomberg, but I don't know how to get access to that feed. At this point I can't stay with FXCM. I feel like they're scammed me and I'm not about to give them a second chance. My only solace at this point was that it was a small position.