Has anybody had any major problems with FXCM or any other brokers

[onepipatatime]

I just started an account with FXCM and being new to trading forex, I became quite alarmed with some of the things that they were disclosing in the trading agreements.

They were saying that all trades are not traded on an exchange and that when a trade is placed, they take a trade on the opposite side (which I take is pretty typical and what most companies do). So obviously I’m thinking to myself, “how am I ever going to make any money, because why would they allow me to make money when they’re going to lose money (assuming that I would make successful trades)?”

Now I know the statistics are that people usually sell at the bottom of the market and buy at the top, so maybe they’re banking on that. Yet still, the way the agreement was written, it basically gives them the right to refuse any trade that is not in their best interests, and not honor stop limits.

Is this what a lot of the agreements say, and can these brokers be trusted at all?

Thanks.

[Clint]

I just started an account with FXCM and being new to trading forex, I became quite alarmed with some of the things that they were disclosing in the trading agreements.

All broker agreements are worded that way. Just hold your nose, and sign it.

I have been with FXCM for almost 5 years, and have had no problems. The first 4 years I traded with FXCM (US). Then, when the NFA started to impose rules on U.S. forex brokers which interfered with my trading, I moved my accounts to FXCM (UK) in London. That move was seamless; I’m glad to be out from under the thumb of the NFA; and I continue to be satisfied with FXCM.

By the way, if you think the FXCM (US) customer agreement is scary, you should read the (UK) agreement.

They were saying that all trades are not traded on an exchange…

That’s simply a description of the forex market. It’s an over-the-counter (OTC) market, as opposed to an exchange-traded market.

…and that when a trade is placed, they take a trade on the opposite side (which I take is pretty typical and what most companies do).

That’s what a market-maker does: he is the seller (at his ASK price) when you buy, and he is the buyer (at his BID price) when you sell. It’s really nothing to be afraid of.

So obviously I’m thinking to myself, “how am I ever going to make any money, because why would they allow me to make money when they’re going to lose money (assuming that I would make successful trades)?”

You’re worrying unnecessarily. If you search the internet, you can find all sorts of horror stories about market-maker brokers abusing their customers; but, from my experience, it happens very seldom, if at all.

Now I know the statistics are that people usually sell at the bottom of the market and buy at the top, so maybe they’re banking on that.

Not a factor.

Yet still, the way the agreement was written, it basically gives them the right to refuse any trade that is not in their best interests, and not honor stop limits.

Is this what a lot of the agreements say, and can these brokers be trusted at all?

It’s standard legalese. As I said, hold your nose, and sign it.

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Thanks.

You’re welcome.

Clint

[onepipatatime]

Well thanks Clint, that helps out a lot. Out of curiosity, how did the NFA’s new rules interfere with your trading?

[Clint]

Out of curiosity, how did the NFA’s new rules interfere with your trading?

Here are couple of forum posts from last summer, which will answer your question.

301 Moved Permanently — the first paragraph outlines the problem

301 Moved Permanently — this post describes how different brokers were impacted differently by the new rules