Hello,
I was wondering if you think FXCM is really a no dealing desk-broker? I know all their marketing is about NDD,
but is it true? I’ve read a lot of comments on ForexPeaceArmy in which users reported about stop hunting and unfair trading conditions. And FXCM would make much more money by trading against newbies than with only
"the broker" between the liquidity providers.
Looking forward to comments…perhaps also from people who trade with FXCM or did so in the past.
Hello,
I cannot (won’t???) comment on your query above but I couldn’t help myself and NOT post this (‘just for fun’):
One of their new banner ads on this site has ‘got me going’ i.e. ‘Trade With A Credible Broker’ because they’re ‘now listed on the NYSE’. I seem to remember Enron, Lehman Brothers, and Bear Stearns being listed on the NYSE not??? LOL!!!
Sorry: no offense meant. I just thought it amusing is all!!! LOL!!!
Alright (on second thought): let me add something USEFUL here!!!
I believe forexpeacearmy.com to be the ‘de facto standard’ for broker ratings. Just be very wary when reading broker reviews. A LOT of the time a bad review has been posted about a broker by a trader who’s just lost their account because they were overtrading and not implementing proper risk / money management (or quite frankly just ‘didn’t know the ropes’) and of course needs SOMEBODY to blame (and the broker is USUALLY ‘first in line’). OR a bad review has been posted by a ‘virtual person’ who works for another broker and cannot stand the fact that their competition is getting better reviews and ratings than them overall. Nobody ever said this is a ‘clean business’ (and that applies, I guess, to ANYTHING where money and greed is involved). When reading broker reviews look for certain ‘common threads’ to emerge. THOSE are the GENUINE reviews and ratings. For example: I know of ONE broker where just about every single bad review (and there are MANY) is on the subject of almost ALWAYS not being able to close out a profitable position and having to wait MINUTES for the position to be closed out (normally when price has already gone against you and either your profit is WAY smaller than it would have been OR the position has now turned to a loss) but, of course, closing out a losing position happens ‘in the twinkling of an eye’ (and no it’s NOT FXCM). In this scenario it’s OBVIOUS that the broker is ‘pulling moves’ against traders (if 90% of about 100 bad reviews are of the same ‘flavour’). And as if THAT is not bad enough: this particular broker won ‘Broker of the Year 2010’ at the FOREXPO in Russia held last year!!! Go figure!!!
But also DO remember there are certain ‘basics’ to bear in mind (most of which most new traders believe are broker ‘moves’). A good example is this thing of ‘slippage’. Slippage is NORMAL in ANY market with ANY broker (alright WITHIN REASON that is of course). Stop hunting??? Always been a debatable point. Is it the BROKER than hunts the stops or the MARKET (the ‘big players’) that hunt stops??? Or is it the trader that just doesn’t know WHERE to place stops i.e. is placing them at levels where they’re almost GUARANTEED to get stopped out e.g. placing a stop RIGHT AT support or resistance levels???
Regarding your original query: quite frankly I couldn’t tell you.
Regards,
Dale.
Dealing desk or not is unimportant. If they have sort of a dealer plugin, e. g. an algo running, then they have no dealing desk but are doing the same as the dealing desk would do, just with computer algorithms.
Plus I agree with Dale. Slipping is a normal business. I’d rather look for reliable execution of your orders. If that is okay, spreads not too wide, etc. then the “tool” to not get slipped is to wait for the next trade. If however slipping becomes too extensive or you won’t get any orders filled or there are “issues”, it is time to look for another broker …
I can also suggest to look at fpa. If there are too many bad records … keep in mind that brokers are no charity organizations. None of them! 
FXCM uses No Dealing Desk forex execution and there are multiple ways you can verify our NDD model. The trading agreement you sign when opening an account with FXCM US specifies how orders are executed via NDD forex execution, it is disclosed in the documents we make available as a publicly traded company, and the execution model is described in detail on our website.
A dealing desk broker could possibly make more money by trading directly against their clients by going for more than the spread. From a business stand-point, this introduces more risk where you then have to be concerned with how they are managing their trading. If all of their traders begin to win, that could then result in larger losses for their business. With FXCM’s NDD forex execution model, we’re compensated through a pip mark-up on the spread which essentially acts as a commission. Therefore revenues with NDD forex execution are tied to our clients trading volume rather than client losses and taking the chance of a dealer managing a position properly. What I just described goes into the benefits from a business stand-point, not to mention the benefit of trading anonymously so that no single liquidity provider can single out a trader with re-quotes or dealer intervention.
FXCM has much more information on our website that goes over how our No Dealing Desk execution works Forex Execution Center | FXCM.
Hope this helps and if you have more questions, then let me know.
thanks,