FXCM Execution

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1

I am trader but am new to forex. It is my observation that when a security rises in price it is because buying is occuring at the ask price, inversely for the price dropping at the bid.

Im demoing a account with fxcm and one thing that i’m noticing is that the price of the securities are rising at the bid level. I see no option to buy at the bid, as far as I understand I can only buy at the ask level.

If this is the case, than who is able to buy at the bid level?

The reason i’m concerned is because I am often getting filled at prices that are above where the market is trading.

I’m not sure if this is true for the entire fx market or just particular to fxcm.

Thanks for any feedback.

2

I think what you are refering to is the spread. Spread is what brokers use to charge commission. For EUR/USD the standard spread is 2 pips if you go long you buy at the lower price and are instantly negative the spread, in this case two pips. If you sell you sell at the highest price and are instantly negative the spread, 2 pips. Once you recover the spread then the trades goes to 0 and every pip after that is profit. When you close the trade the broker gets the spread, 2 pips, and you get your profit. Hope this helps

3

I understand the spread. I’m a little confused on the price action. For example take the EUR/USD, hypothetically let’s say its uptrending. So the price action is as follows … 1.05 1.06 1.07 etc.

I decide to buy at the high so I put in an order when the high is 1.07, but I get executed at 1.09 because thats the ask price. So in essence, the pair was rising at the bid level.

Which is confusing to me, because I don’t have a option to put in a limit order to buy at the bid or anywhere other than the ask. I’m confused as to how the pair is rising at the respective bid price.

I apologize if i’m still not making sense to you, or if its a pointless question.

4

There are always two prices, the BID and the ASK. You can watch one, or the other, or both, depending on your preference.

Most traders watch the BID price, and that’s what you’re doing as well. On your FXCM platform, you can switch back and forth between BID and ASK charts, and it can be very instructive to do so. Scroll across the buttons on the upper left of your platform until you find the buttons for BID prices and ASK prices. Flip back and forth between the two, and watch what your chart does.

Here’s what “BID” and “ASK” mean:

[ul]
[li]the BID price is the price at which your broker will buy from you, if you want to sell.
[/li]

[li]the ASK price is the price at which your broker will sell to you, if you want to buy.
[/li][/ul]

The ASK price is always higher than the BID price. You’ve probably heard the saying, “Buy low, Sell high.” Well, only your broker gets to do that. You have to do the opposite: you have to buy high, and sell low.

Learn this phrase: “Buy the ASK, sell the BID”. Make that part of your brain, just like your phone number, or your date of birth.

Sometimes prices are quoted in pairs, such as 1.5126/29. Whenever you see a quote like that, you know you are seeing both the BID and ASK quoted together. In this case, the BID price is 1.5126 and the ASK price is 1.5129. The spread is 3 pips (the difference between the BID and the ASK). If you were reading that quote out loud, you would say, “1.5126 by 29”.

If you continue to use BID charts, and most of us do, then just be aware that you can sell at the price you see on you chart (that is, at the BID price). And you can buy at the price you see on your chart PLUS THE SPREAD (that is, at the ASK price).

Hope that helps.

5

I see, thats different from equities. FX charts show bid/ask while equities show last transaction price.

Would it make sense if you want to go long, to look at the chart at the ask level? If you want to go short look at the chart at the bid level?

Why do you mostly use the charts at bid level?

6

It depends on the broker, and the platform.

My live account is with a broker that has bid, ask, and last showing in boxes, and the chart is compiled off of the “last” number.

MetaTrader’s charts are compiled off of the bid only.

Don’t know much about FXCM’s other platforms, but they do offer MetaTrader which would let you see both the bid and ask lines. It would also let you set up a pending order, so that as price moves, you get in at your chosen number instead of a market buy or sell.

7

Hi V.

To add to the other posts…

Yes, the charting for forex trading will be different from equities in that it’s recording the prices quoted rather than the last transaction price completed.

Most forex charts are standardized to show only the bid price. The Marketscope chart inside the FX Trading Station has the option to show either bid or ask, and Clint provided a great explanation.

In the retail forex market, you’re a price taker. The bid price needs to touch your sell price in order for it to go into execution, or the ask price needs to touch your buy price for the order to go into execution.

Hope that helps!

Jason
FXCM

8

Hi Jason,

What kind of support FXCM will provide for a INDIAN Resident.

9

Sorry of not responding sooner, Vinoth. I was out of the office for Christmas and New Year’s and only returned to the office today.

FXCM offers live customer support 24 hours a day, 7 days a week by phone, and you can call us toll-free in India by dialing 00 800 2233 4466.

In addition, here on the forums, I’m available to answer your questions on weekdays during US daytime hours. Please feel free to post any questions here that you have about our services.

10

Hi Jason,

Do you have Indian customers in FXCM? As there is some restriction for INDIA, I just wanted to know how they do transactions.

11


Within the FXCM Trading Station platform, you can toggle the view from Bid to Ask with the buttons pictured. If you are looking to buy or close a short position, look at the ASK view. If you are looking to sell or close a long position, look at the BID view.

My assumption is that you are scalping. Traders looking to capture primary moves (hundreds of pips over days or weeks or months) don’t get too concerned about the tiny spread. Scalpers looking to trim 5 pips out of the noise on a 5 minute chart get concerned about the spread and even make the error of placing a sell order on an ask chart and getting filled a couple of pips away from where they thought they were placing their order. FXCM’s newer lower spread structure reduces this effect a lot, but it can still be an issue for those scalping with a microscope.

12

Hi Vinoth,

We do have clients in India, and they can transfer funds to and from their trading accounts via debit card, credit card or bank wire transfer.

13

Hi Jason,

I have opened the LIVE account in FXCM. Really I am not satisfied with your teams customer service.
I am in touch with <[email protected]> This guy guided me only till I deposit my initialamount. When I asked query regarding commissions after my first trade. He is not ready to guide me in anyway. Really disappointed with his responses.
As we are trading from abroad on what basis can we expect your service. I believe this is a crucial thing to taken care.

Is your customer service only till we deposit the initial amount?

I don’t think this is the not the best way to deal. Let me know what is the solution for this. Can you give me any email id to proceed further.

15

I’m sorry you did not get a good response to your questions from my colleague. I’ve followed up on this matter with him. Our customer service team is available to you 24/7 by phone (00 800 2233 4466) and email ([email protected]). Furthermore, I myself am available to you here on the forum on weekdays.

What is your question about commissions? I would be happy to respond. Also, you may find this FAQ helpful: 301 Moved Permanently

16

Commisions.jpg700×110 15.4 KB

Hi Jason,

Thanks for your assurance.

As we are doing trading from remote location where your physical office is not available. We expect some sort of guidance from your team to understand things.

In the attached file I wanted to know why there are 2 commissions. When I check this with your collegue(Suprathim), he says it is swap charges. Trade is in play only for 45 minutes.

Can you please clarify why we are getting swap charges. I have done 3 trades yesterday. For all my trades i have noticed this deductions.

This is the information i have taken from account history.
Start Trade: 2015.01.06 18:20:22
End Trade: 2015.01.06 18:58:22
Commssion: 21538915 -0.06
Commssion: 21538915 -0.06

17

Hi Jason,

I tried to call to this number: 00 800 2233 4466. It looks this number doesn’t work. I faced some serious issue in my Platform. One trade automatically closed. Apart from me no one is accessing this account. It looks strange. Can you please look in to this ASAP.

18

The 2 commissions you see are for entering and exiting your trade. They have nothing to do with swap which would only apply if a trade was held open through 5pm New York Time when trade rollover occurs.

19

Please log into MyFXCM.com with your MT4 login details. From there you can click on Account Statement to view a report for the time in question. In that report, please tell me what letter(s) you see in the Condition column. If possible, please post a screenshot of that section of the report hiding any personal details such as your account number. That will tell us the reason why your trade was closed.

Thanks,
Jason

PS: You said our Universal International Freephone Number did not work for you. You mentioned previously that you’re trading from a remote location. Do you know if you are able to dial toll-free numbers from that location? If not, you might still be able to make a toll call to us at 00 1 212 897 7660.

20

Statementerror.jpg700×164 17.3 KB

Hi Jason,

I have highlighted that in the attachment. It says ‘MC’. Waiting for your reply.

21

MC stands for Margin Call. That means your trade was automatically closed out as a safety measure by the Margin Watch feature of the system. This safety mechanism ensures that you are only ever risking money that you have in your account. We have a No Debit Balance Policy which means you can never owe FXCM money due to trading losses, even if your account balance goes negative.

To avoid an automatic margin call, you must maintain enough equity in your account to meet the minimum margin requirement (MMR) for all your open positions. On an FXCM US account, the MMR for 0.01 lots (AKA one micro lot) of GBP/JPY is $36. (source: Forex Margin Requirements - FXCM)