This is all you need to know about [B][/B]FXCM
NFA levies $2,000,000 monetary sanction against FXCM and orders refunds to customers
The Ever Watchful VIPER
Hi Viper,
Friday’s action from the NFA primarily concerns positive slippage, and I would like to shed more light on how positive slippage with FXCM’s NDD forex execution system used to work prior to August 2010 and how it has worked since then.
FXCM’s platforms display the best bid/ask spread streamed from the firm’s liquidity providers plus FXCM’s mark-up. Every FXCM NDD forex trade is automatically offset in a two-step process, designed to ensure that FXCM does not profit from a trader’s losses. In the first step of the execution process, a trader clicks on the price and the order is sent to FXCM. In the second step, FXCM automatically sends the client’s order to one of its liquidity providers to offset the trade.
FXCM’s execution system prior to August 2010 only offered price improvements to clients in the first step of the process. If a better price became available on FXCM’s platform in the fraction of a second after the client submitted the order but before the order was received by FXCM, the client would benefit from the price improvement. However, FXCM’s previous execution system did not provide clients with price improvements in the second step of the execution process, even if FXCM was able to offset the order at a better price, excluding FXCM’s markup. FXCM enhanced the execution system in 2010 so that clients now benefit from price improvements in both steps of a transaction for all order types.
It is important to note: By the end of 2010 FXCM enhanced its execution system to offer price improvements on all trades. You may remember from my forum posts last August that I announced positive slippage for limit and limit entry orders on this thread. All orders now eligible to receive positive slippage, and all price improvements are subject to available liquidity.
The settlement amount and the client price improvement credit will have no negative impact on FXCM’s financial balance sheet because several founding partners of FXCM have reimbursed the company for the credit and the fines. As of June 30, 2011, FXCM Inc. had over $200 million in cash and no debt.
FXCM’s goal is to have a fair and transparent system, and we are proud to offer an execution system that passes on any price improvements. FXCM has compiled statistics from July 1, 2010 until now to display the percentage of orders positive slipped and negatively slipped, and which orders most frequently experience each. The percentage of orders between positive and negative slippage has been roughly equal.
And we have broken this down even further to display the number of orders on a monthly basis positively and negatively slipped:
Limit and limit entry orders are the most likely to experience positive slippage which is why we highlight using limit and limit entry orders in the execution center on our website. You can find even more data on slippage broken down per order type in the complete report here: Slippage Statistics
Please let me know if you have any additional questions. I will do my best to answer them as thoroughly as possible.
Jason
FXCM
All FXCM customers from Singapore have been notified that they will no longer be customers of FXCM. Instead they gave current FXCM customers from Singapore option to transfer their accounts to Kim Eng Singapore who is a local broker based in Singapore.
FXCM will transfer all funds and active trades to Kim Eng but they will be maintained in USD.
All this time i’ve only heard complaints about FXCM. What tha h**** is going on?
Hi, whats the difference between the "stop, limit, at best, market and entry orders (10.5% neg slip) and the 60% neg slip on stop and stop entry orders ?
Thanks
Dan
Hi Dan,
We broke down the slippage statistics per order type. On the FX Trading Station II platform, you can create market orders, stop loss orders, limit orders, etc. to open and close trades. The slippage statistics will detail the number of orders that experienced positive or negative slippage for each order type. All of this and more is listed in the slippage statistics report, and here’s the data taken directly from the report:
And the order type description is also located in the slippage statistics PDF report at the link above.
As you can see, the orders most likely to experience positive slippage are limit and limit entry orders. That’s why we highlight the use of limit and limit entry orders in the forex execution center on our website Forex Price Improvements | Positive Slippage | FXCM . Both positive slippage and negative slippage are dependent on available liquidity, so market volatility and liquidity will affect the slippage of your trades. Your orders on NDD forex execution are offset back to back with one of multiple liquidity providers where liquidity is available.
Let me know if you have any additional questions.
-Jason
Thanks for the reply Jason,
This might be a stupid question but whats the difference between a stop entry and limit entry orders ? and how do i choose limit and limit entry orders in marketscope 2 ? Are these done automatically when trading from the chart ?
Hi Dan89,
How’d the marketscope indicator work out for you? Hope it helped.
Whats the difference between a stop entry and limit entry orders?
Stop entry orders are waiting orders to get into the market at a less favorable price to the current market price. The logic behind stop entry orders is that markets tend to trend and you can use key price levels as confirmation that your bias is likely to play out.
For example, let’s say EUR/USD is currently trading at 1.4476(0) and we think EUR/USD will rally further if the price rallies above 1.4500(0). We can place an entry stop order to buy at 1.4500(0) expecting the price to rally further if the 1.4500(0) price level is reached.
Once we have our strategy down, then we can place a stop entry order from Marketscope by right clicking inside the chart , selecting, “Create Entry Order” from the drop-down, and then completing our order details. You can place stop loss/ limit orders (S/L) to manage your waiting order and I added a stop loss order at 1.4400(0) in the below example.
You can manage your orders from Marketscope from the horizontal lines that display.
Limit entry orders work the opposite way – they are waiting orders to get into the market at a more favorable price than the current market price. You can think of using limit entry orders for reversals where you think that a key price level will hold and that the price is changing direction.
For example, let’s say USD/CAD is trading at 0.9844(0) and we think the price will move lower to 0.9834(0) before rebounding to the upside.
We’d place an entry order to buy at 0.9834 and wait for our order to trigger.
how do i choose limit and limit entry orders in marketscope 2 ? Are these done automatically when trading from the chart?
You select “create an entry order” and the platform will know what type of entry order your placing based on the price you select – if your entry is at a better price compared to the current market price then it’s a limit entry and vice versa for stop entries.
Hope that helps!
- Jason
it is no bad but is good is fxsol and fxdd