FXCM Review 2018

By John Jagerson  | January 5, 2018

FXCM has been a major player in the retail Forex market since its founding in 1999. While the firm has expanded its offerings to include indices and commodities CFDs, its primary focus and strengths are still in the Forex market.

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Overall Rating

3.6/
5.0
Products & Fees
3.1
Trust
2.8
Special Features
3.0
Desktop Experience
4.5
Mobile Experience
3.3
Customer Support
3.8
Research & Insights
5.0
Education
3.0

FXCM Fast Facts

FXCM has been in the Forex business for 18 years and more recently entered the CFD business with major stock indices and commodities. The company's focus on Forex enables it to provide high-quality Forex education and some of the lowest Forex spreads in the industry. FXCM also offers mini accounts, which makes it a great choice for clients who have smaller account sizes. FXCM is working on regaining some of the public trust it lost in early-2017 when the Commodity Futures Trading Commission (CFTC) barred the company from operating in the United States upon discovering the company misrepresented its relationship with, and the kickbacks it was receiving from, a market maker in its Non Dealing Desk (NDD) service.

pros

  • Extensive Forex Experience
    FXCM offers comprehensive Forex education, Forex apps and trading algorithms
  • Tight Forex Spreads
    FXCM's focus on Forex allows it to offer some of the lowest spreads in the industry
  • Mini Accounts
    Easy to get started with a small account balance

cons

  • Concerns Over Non Dealing Desk (NDD)
    FXCM is still working to recover from its NDD scandal in the U.S.
  • Access to Limited Number of Markets
    You cannot trade cryptocurrencies or single-stock CFDs through FXCM
  • No Emergency Stop Loss
    There is no way to automatically liquidate your positions once your account balance reaches a predetermined threshold
$3.5 Trillion
Retail Trading Volume
(For 2016)
4
Trading Platforms
(Trading Station, MetaTrader 4, ZuluTrade, and NinjaTrader)
130,000+
Active Accounts
(As of February 2017)

Products & Fees

3.1

FXCM provides access to a limited number of financial markets - only Forex, commodities and major stock indices - via spread betting and CFDs. FXCM provides some of the lowest Forex spreads in the industry. Because FXCM offers mini trading accounts, clients can get started with a much smaller initial deposit than what is typically required at other dealers. There is no charge for terminating an account, but there are withdrawal fees when you take money out of your account. Inactivity fees kick in after an account has been idle for one year.

  • EUR/USD**
    0.7 pips
  • GBP/USD***
    0.9 pips
  • USD/JPY****
    0.7 pips
  • S&P 500 CFD
    $0.50
  • Japan 225
    $7.00
  • Oil CFD
    $0.05
  • Gold
    $0.40

Trust

2.8

If there's one area where FXCM suffered in our ratings it was in the Trust category. FXCM no longer operates in the United States after being banned by the Commodity Futures Trading Commission (CFTC) in early-2017 for defrauding its customers by misrepresenting the association the company had with one of the market makers in its No Dealing Desk (NDD) service and accepting $77 million in rebates on NDD trades. FXCM also does not provide additional deposit insurance above and beyond what's required by regulators in the event of a default by FXCM. It does, however, take steps to ensure client funds are not comingled with corporate funds - ensuring that client money and assets are protected in the unlikely event that FXCM becomes insolvent - by holding those funds in segregated accounts at regulated banks.

GBP 50,000
Default Insurance (FXCM)
(If FXCM defaults, up to GBP 50,000 under the Financial Services Compensation Scheme (FSCS)).
GBP 85,000
Default Insurance (Failed Bank)
(If the custodian bank holding client funds goes into liquidation)

What you need to know

FXCM is regulated by the Financial Conduct Authority (FCA), registration number 217689, and follows the strict regulatory requirements known as the client money and client assets rules (found in the Client Assets Sourcebook - CASS) outlined by the FCA.

Special Features

3.0
Special Features

FXCM gives you the flexibility to automate your trading and even use your own, or a third party, trading platform to execute your trades. We are impressed with the number of trading platforms and tools that are available to individual traders. In fact, the company's only negative mark was that they require a minimum monthly notional trading volume of 500K per month for the previous three months to access its Virtual Private Servers (VPS) for free. (Traders often use a VPS to run automated trading algorithms.) Otherwise, access to the VPS costs account holders GBP 30 per month.

Programming Services
FXCM helps write the code for your customized EAs
Order Slicer
Split larger trades into multiple smaller ones for better fills
FXCM Apps
Customize your trading experience with apps
ZuluTrade
Subscribe to trading signals from other traders
(Peer-to-Peer Auto Trader)

What you need to know

Depending on the functionality you are looking for you may need to choose among different trading platforms. Most of the platforms are customizable and users can add small trading applications to the platforms from an app store. The Trading Station has the most available apps, followed by MT4. Ninja Trader has the fewest number of available apps, and ZuluTrade has none.

Desktop Experience

4.5
Desktop Platform Experience

FXCM scored very well in the Desktop Experience category because they have all of the features most active traders are looking for in a trading platform. Traders will find customizable charts with a large assortment of indicators and drawing tools and studies, news feeds and conditional order windows. However, the platform itself is built on Adobe Flash, not HTML5 like so many of the newer, more efficient desktop platforms. And the layout and styling don't seem to have been updated in quite some time. The rigidity of the layout limits where and how you can display the information. Some traders may gravitate toward FXCM's MT4 charting package or one of the other advanced charting packages for the special features they offer.

Pros

The dynamic charts in the Trading Station are fully customizable. Traders can add things like Fibonacci drawing tools and chart overlays. They can also view tick charts alongside daily charts. Forex, indices and commodities can be traded within the same platform. Trade execution is improved by customizing a set of default trading settings so traders don't have to spend additional time entering the same information for every trade.

Cons

The Trading Station is built on Adobe's Flash, making it slightly less responsive and subject to annoying Flash updates and support issues. The platform does not provide trading alerts. When you click the "Research" button, it takes you to a web page outside of the trading platform, forcing users to toggle back and forth between the two instead of integrating the research within the platform.

Mobile Experience

3.3
Mobile Platform Experience

The FXCM mobile app includes most of the functionality available in the desktop application. Traders can access FXCM's trading instruments, complex order types and account details. Charting is available (complete with trading indicators and drawing tools) on both the Android and iPhone apps. The app also includes a news feed and an economic calendar. Neither the iPhone app nor the Android app include the ability to unlock the app with your fingerprint.

Pros

The mobile app includes all of the same functionality clients can use in the desktop version to analyze and research trading opportunities. Clients can use advanced order types and track their accounts. The dynamic charts can also be expanded to full screen to provide better clarity during the technical analysis process. Clients can even deposit funds through the mobile app.

Cons

The app does not include fingerprint security and there is no added security beyond the login password. We would like to see the app include customizable, automatic sign-out and verification of login from another device.

Customer Support

3.8

FXCM customer support provides multiple ways for clients to get answers to their questions. Clients can contact customer support via phone, email or live chat. Clients can also call the trading desk directly with trade-related questions if for whatever reason they are unable to access their trading account online. The company also maintains a robust FAQ database. No in-person support is available.

What you need to know

Customer service is available 24 hours a day from Sunday to Friday. The trading desk opens on Sundays at 5pm and closes on Fridays at 4:55pm. In our experience, response times via each of these customer service channels was prompt, knowledgeable and courteous. The FAQ section covers a wide variety of topics and has an excellent search engine.

Research & Insights

5.0

FXCM scored relatively high in the research category. The platform includes real-time news feeds, calendars, and advanced data analytics. Along with its proprietary technical analysis tools, it also provides specific, real-time trading signals.

Grid Sight Index
Pattern recognition and price projection tool.
Market Data Signals
Proprietary technical indicators like the Speculative Sentiment Index (SSI).
FXCM Plus Trading Signals
Trade ideas on 15 currency pairs.
Before the Bell
Daily email with news and analysis.
Trading Analytics
Manage your risk by analyzing your past trading performance.
Trading Signals
Real-time buy and sell signals with stops and limits.

Pros

FXCM provides a wide range of analytics, research and tools. We especially liked the Grid Sight Index and the Trading Signals. The economic calendar was easy to use and included expectations, actual results, currencies affected, and historical data. Research from FXCM's analysts was timely and informative.

Cons

The only information source within the newsfeed is Investing.com. While Investing.com certainly provides good information, it is difficult to think that one news source is going to provide anywhere close to comprehensive news coverage required by active traders.

Education

3.0

FXCM offers a robust Forex education via its FXCM University, trading guides, video library, seminars and live classroom. However, the company provides little to no education for trading CFDs on indices or commodities. The ongoing webinars and commentary incorporate the trading platform, which will help investors to become more proficient with its use.

Online Live Classroom
Participate with Instructors in Webinars
(Learn, discuss, and apply trading concepts)
FXCM University
Master Various Trading Concepts
(Collection of predefined courses)
Forex Trading Guides
Take a Deep Dive into Trading
(Downloadable guides covering specific trading topics)

What you need to know

FXCM University and the other educational offerings provide a lot of useful information for beginning and advanced Forex traders alike. The main drawback of FXCM's educational offerings is they don't provide a lot of information for those who are looking to trade CFDs, and they don't include a glossary.

Bottom Line

FXCM scored high marks in some of the areas of our analysis while missing expectations in others, especially trust, as it continues to recover and move on from its banishment from U.S. markets. As the company name implies, FXCM is heavily skewed toward trading Forex - whether you are looking at the contracts that can be traded or the educational offerings that are provided. FXCM offers a broad array of trading platforms, including desktop, browser-based and mobile applications that we felt would appeal to many traders. New traders will find the tools and educational opportunities necessary to get started in Forex trading. Seasoned Forex traders will appreciate the flexible, customizable trading platforms. We would have preferred at least the option to talk to a representative in person, but otherwise their customer support was professional and courteous. The firm's selection of research, news and analytics was notable.

John Jagerson
Reviewed by John Jagerson

John Jagerson has worked in the capital markets and private equity for most of his career, including investing, writing and money management. He currently manages a registered CTA and contributes to Learning Markets, the companion site to the book "Profiting With Forex" by John Jagerson and S. Wade Hansen.

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