I’m FXCM’s representative here on BabyPips and would be happy to address the points you raised. Also, you mentioned that you’re thinking of opening an account with us, so please feel free to reach out to me with any questions in the Broker Aid Station.
On our No Dealing Desk (NDD) forex execution, FXCM makes money from your trading volume. That means scalpers are some of our best clients. In fact, all trading strategies are welcome on our NDD model.
On our NDD model, we don’t profit from your losses, or lose from your profits, because we offset each of your orders one-for-one with the best prices from competing liquidity providers. We make the same amount of money from your trading volume whether your stop loss gets hit, or you take a profit. Therefore, we have no reason to hunt your stops.
If the spreads widen on our platform, then it’s because the banks providing liquidity in the market have widened their spreads. This typically happens during times of high volatility (news events) or times of low liquidity (5pm trade rollover or the Sunday open).
Is it possible you’re not taking into account the bid/ask spread when you look at your chart?
By default, the chart will show you the bid or sell price in the market. However, if you are in a short position, then it’s the ask or buy price in the market that would trigger your stop loss order. The ask price is higher than the bid price you see on your chart due to the bid/ask spread.
FXCM’s Trading Station charts allow you to change views to see the ask price instead of the bid price when you prefer.
As I mentioned previously, FXCM makes the same amount of money from your trading volume whether you win or lose on your trade. If the spread widens on our platform, then it means that all the liquidity providers have widened their spreads due to prevailing market conditions.
There’s no sugar coating this. Slippage is one of the risks you assume when trading in any market whether it’s equities, futures or forex. However, unlike with some other brokers, slippage at FXCM works both ways. If you have a limit or take profit order, and the price gaps in favor of your trade, then you will get filled at the more favorable price which is trading in the market. This is called positive slippage or price improvement.
A study of over 43 million orders executed through FXCM over a 12-month period from September 2013 through August 2014 found that 52% of all stop and stop entry orders received negative slippage. However, the same study showed that over 58% of all limit and limit entry orders received positive slippage.
That’s due to the momentum of price movement when such order types are triggered. Stop orders are triggered when the price is moving against your trade, while limit orders are triggered when the price is moving in favor of your trade.
The year-long study of trades executed through FXCM also revealed the following:
[li]76.2% of all orders had no slippage.
[/li][li]13.5% of all orders received positive slippage.
[/li][li]10.2% of all orders received negative slippage.
Over the course of that year, FXCM clients benefited from over $21 million in positive slippage.
It’s worth noting that the Market Range feature on our Trading Station platform and the Enhanced* Maximum Deviation feature on our MT4 platform allow FXCM clients to limit the amount of negative slippage they receive, while still enjoying the full benefits of any positive slippage that’s available.
[I]* On the MT4 platforms of some other brokers, the Max Dev feature is unavailable, or if it is available, then it will limit both your negative slippage and your positive slippage equally. By contrast, FXCM enhanced how Max Dev works on our MT4 platform allowing you to limit your negative slippage while still enjoying the full benefits of any positive slippage.[/I]