FXCM cfd brokers in general?

Broker Discussion
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Hi everyone…(anyone)

I know how to read a market chart from time spent trading Bitcoin, which I got out of never to venture into ever again, after I got two exchange accounts robbed (by the exchanges themselves imo) in as many weeks, just prior to the $500 - $20K ramp (yeah…I know).

Recently decided to check out a cfd broker as a platform to trade on. FXCM is FCA regulated so I guess they can’t just rob you blind, and then tell u; “Fk U, ur account got hacked, now fk off!”

Fortunately, I am only using a demo account for the time being, and just executed a BTC short trade.

The ‘spread’ when I opened the trade was ‘25’. I am totally add odds with what all the terms are and what the numbers actually mean, quite some departure from 0.1% trade fee, 0.25% margin cost, etc. But I took ‘spread’ to be the difference between the spot price and the price the broker will sell a ‘lot’ to you for. So I assume the cost of selling 1 BTC was $25 USD…‘Fair enough’ I suppose. On Bitstamp it would cost around $20 to make a 1 BTC trade…but then I came across this:

( Spread ) x ( Pip Cost ) x ( Number of Lots Traded ) = Total Cost

WTF!? Could anyone who understands this tell me what the fk this means?

Might this explain why after Bitcoin dropping some $200 from my paper trade Stop Sell order point, that my BTC short trade was only $20 in profit? I sold 30 lots (30K worth of BTC) and was actually expecting therefore to see around $700 in profit. At this point, I noticed that FXCM had increased the spread from 25, to 65, which is fkn insane!

…and then…as my short trade was approaching it’s target. FXCM stopped trading. Like I said, this is only a demo account, but had it been a real trade, could I expect to wake up the next morning, to find my short target had been hit, and Bitcoin had bounced whilst FXCM was offline, taking out my Stop Loss order, thus turning a successful trade into a nasty financial hit?

Is this why all these cfd’s are made to advertise things like 76% of all cfd accounts lose money? Or is there something I just aint understanding here? Who in their right mind would actually trade under these conditions?

Pricing structure that requires a calculus equation to estimate?
Broker moving goalposts regarding how much your exit trade is going to cost?
Broker suspending trading even though they advertise Mon-Fri 24 hours?

Had this been a real trade, I would be in knots chewing furniture…

…are there any good cfd alternatives where the rules are made clear and the goalposts don’t shift, or do I need to find some other trading outlet?

1 Like
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Interesting (and entertaining) post!!! LOL!!!

The calculus equation that you refer to is not quite that complicated though. It’s merely the spread i.e. the difference between the bid and the ask price and which (theoretically anyway) is the broker’s fee is all. And because nowadays it’s not easy to get fixed spreads the spread will vary on the fly for a variety of reasons: some legit while others not so. Suffice to say you got it right i.e. the variable spread is the reason you’re not seeing what you expected to see.

Not that I have ever traded with FXCM but I would be pretty disappointed to find out that they were pulling moves like that. They’ve been around a while and are supposedly well regulated.

Where are you resident and what nationality are you??? I only ask because the answers to those two questions kinda simplifies your choice of brokers i.e. possibly kinda narrows it down a tad.

I don’t trade Bitcoin though and I cannot even fathom how it became a tradeable instrument in the first place. But that’s just me.

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@MatDerKater, Enough said…

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That is disappointing to read.

One of the reasons they’ve been on my mind of late is because they’re shoved down my throat all day because of an ad. on this site and I couldn’t help noticing that they’re registered with our FSB. But in the last few days and having looked up one or two other shady brokers in an effort to help one or two forum members here it’s sure looking to me now that the South African regulator will take anybody nowadays too. Damn. The hoops and nonsense that we had to go through years ago to get registered here. It just wasn’t funny. But it was a feather in your cap. Nowadays it certainly appears to have become a free-for-all.

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do not touch fxcm, the brokers capital base is as thin as ice in the carribean, the stock is worth less than pennies and even that exceeds then intrinsic value of the company.

fxcm is since years on the verge of total collapse. im pretty sure the next crisis will wipe them out completeley.

check for financially stable brokers like plus500, IG and if you got 20k to invest try Interactive Brokers.

edit: FXCM has been bought by jefferies financial group, which should/could stabilize their capital base. The company has lost 99% of its value at the NYSE from 2015 and the mother company (Global Brokerage Inc.) has filed for bancruptcy in early 2018.

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You crack me up!!! LOL!!!

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I am in the UK…so cfd are totally ‘free n easy’ here…I contacted FXCM support and they pointed out that BTC trading was scheduled to shut down between 8pm and 10pm that day…bit fishy that this just so happened to be the time where a Fib Ext based bottom was put in and BTC started to bounce back up again…as for the moving spreads…totally fkn prohibitive and throws all risk management out the window if you have no guarantee how much it gonna cost to get out…

The fact that BTC and other crypto’s are tradeable, proves to me one thing…If there were strong enough hands in the market, capable of ramping and supporting dog turd IOUs, people would trade them.

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Yeah…

I thought that cfd’s had to mirror the action on the actual exchange they are supposed to be mirroring, but at least FXCM doesn’t seem to…lots of little FU heads and wicks especially on the very LTFs, which I guess are the dwelling places of many Forex traders with their *500 margin.

Read bad reviews about Plus500 regarding moving spreads…will check out IG…

…Also had a look at FXTM, but find MT4 utterly horrendous to use…FXCMs trading station is a bit better, but neither are as good as Web Browser based TradingView…strange since the likes of MT4 is meant to be the ‘gold standard’ of trader platforms.

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Hello.

Nah. You just need a bit of hand holding here is all. Spreads are just a part of the business. Broker has to make money somewhere (an HONEST broker that is). UNLESS of course you’re intending to try trade these things short term (anything shorter than a day is short term to me) in which case I cannot help you I’m afraid.

And if you’re in the UK then you’re in a good place. Trust me. Maybe this post of mine will help (for a decent broker that is and that offers Bitcoin in various currencies):

BUT let me ALSO say: not something I’d touch with a barge pole (cryptos.). But happy to help with platforms and trading in general.

Regards,

Dale.

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trsdingview is best by far.

i recommend anyone to never use the charting tool of your broker. always use an external one. trading view has several of sources of data income which makes it very reliable. (for retail clients of course. pro clients have better sources)

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Will check out ETX also…

…biggest thing with crypto’s are the exchanges…

I have been robbed blind of 100% of my Kraken account, had 36% of my account on Bitfinex wiped as part of their self appointed ‘bail-in’ plan after they were, cough plutter, ahem…‘hacked’ for $95 Million worth of BTC. MtGox famously went down with around 1 million units of it’s user’s BTC. BTC-e done the same but with a much smaller amount after interpol nailed them for money laundering…and there has been more…

…it is the wild west for sure, but one thing I would say about crypto, is that it isn’t going away anytime soon. Even if BTC implodes in on itself one day, going forward crytpo will be a part of how the modern world operates. There are even governments talking about launching their own crypto currencies now…Sweden perhaps being the most notable example.

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Isn’t that the truth.

You’d be surprised though at things that are INDEED tradeable on the Futures Markets. I seem to recall from years back that you could bet on the WEATHER at one point.

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weather derivatives are dating from very old days. they have a good reason to exist. they are a insurance policy for big farmers groups that their business continues stable even in the event of bad weather for the crop year.

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I will admit that I didn’t know the reason nor did I know that they date back. I think I saw it once on Bloomberg and thought WTF??? LOL!!!

You live and learn!!! Very interesting. You and I should chat more.

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[quote=“dpaterso, post:14, topic:221376, full:true”] You and I should chat more.
[/quote]

we definitely should. the first post i saw from you was something like “you trade in the daily chart, that makes your chances to succeed much higher” (i cant remember the very exact wording) and there i saw; ok that guy is a veteran :smiley:

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Yeah…the higher the time frame, the more truthful the charts are…but trade the Daily charts, then wait weeks on ur trade, Trade the Weekly Chart, then wait for Months.

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nothing of value is ever beeing created over night. you want to grow your account to millions, then bring time :smiley:

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Hey bro

One of the major advantages of trading btc via CFD contracts is shorting without coverage. And after that advantages end. I used bitcoin CFDs at Hotforex extensively when there was major sell-off on BTC and reaped decent money. FX brokers offer only price at your disposal no market depth, etc. Less information means less accurate analysis so make your own conclusions.

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I also note FXCM’s habit of ceasing trading on all non-forex assets for a couple of hours every evening…seems like a pretty good way of traders having their positions liquidated and big chunks ripped out of their deposits in order to cover, when trading resumes and/or being pushed into only making day trades…i.e. higher leverage, smaller moves, more erratic chart behaviour.

Not good.

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You mean they don’t allow to transfer positions over night? Why traders have to force close their positions?

I think you meant something different because all CFD brokers operate in similar way and Hotforex allows to keep position as long as you have enough margin. This is only requirement.