Beware Of Fxcm No Dealing Desk Option

[fx-analytics]

Hello,

I had been recently testing the new NO DEALING DESK option with FXCM (Forex Capital Markets) as they advertised rapid execution even during news releases ie. macroeconomic reports. I wanted to test it on Non-Farm-Payrolls (November the 3rd, 2006) and found following:

1. FXCM filled me on my resting order even before the price in the streaming prices window displayed the price (rate) I wanted to have.

2. The stop/loss was not executed I had to manually exit the trade.

3. FXCM filled me on the highest ask priced noted on this day. (17 pips slippage)

4. FXCM executed the trade whole minute and displayed it after the market went down ca. 100 pips. I was unable to change the parameters of the order during that time.

Would you like to see it ? I had even recorded it live:

http://www.fx-analytics.com/videos/untitled/untitled.html

Please send the link to all your friends before they fall victim of FXCM.

 

[notouch]

FXCM don't offer any protection against slippage (like the limit order most decent brokers have or the bounds setting OANDA have). Also FXCM are FXCM. Only a fool would trade with them.

 

[SOCRATES]

Just as an experment....

Set up an accurate forex datafeed on one screen.

Then set up FXCM prices on another screen or even the same one.

Now examine carefully to see if there is any synchronicity of::

(a) direction.

(b) price action

(c) spreads

(d) synchonicity of tops.

(e) synchonicity of bottoms.

(f) synchronicity of volatitily

(g) synchronicity at all

If it were not so serious ...it would be funny.

Incidentally, while we are at it, the same applies to spreadbetting prices in general.

 

[the blades]

Just as an experment....

Set up an accurate forex datafeed on one screen.

Then set up FXCM prices on another screen or even the same one.

Now examine carefully to see if there is any synchronicity of::

(a) direction.

(b) price action

(c) spreads

(d) synchonicity of tops.

(e) synchonicity of bottoms.

(f) synchronicity of volatitily

(g) synchronicity at all

If it were not so serious ...it would be funny.

Incidentally, while we are at it, the same applies to spreadbetting prices in general.

I have an ongoing real life experiment with spreadbet prices, measuring these differences (for UK stocks only).

My findings suggest that your conclusion (re spreadbetting UK shares) is incorrect here. There's experimental error in the trial, but any differences are defiinitely insignificant compared to the costs of alternative methods.

UTB

 

[SOCRATES]

I have an ongoing real life experiment with spreadbet prices, measuring these differences (for UK stocks only).

My findings suggest that your conclusion (re spreadbetting UK shares) is incorrect here. There's experimental error in the trial, but any differences are defiinitely insignificant compared to the costs of alternative methods.

UTB

I was referring first of all to currencies.

The testing, which was done for one month, was alongside the live prices streaming from the datafeed for currencies used by the Bundesbank, so you cannot get more accurate or fast than that, for starters.

The currencies chosen were the 4 major pairs, with an addtional 2 secondaries.

In every case there was lagging, or out of sync, or volatity where none existed in the real market.

This testing was done on a demo account.

I should think the prices and spreads and progression of movement on both demo and funded accounts ought to be the same, otherwise there is no point in providing demo accounts at all would you not agree ?

My comments "in general" refer to fast instruments, and not to UK shares which in comparison to fast and highly liquid derivatives are, with respect, in comparison, like watching paint dry you must concur.

 

[the blades]

I was referring first of all to currencies.

The testing, which was done for one month, was alongside the live prices streaming from the datafeed for currencies used by the Bundesbank, so you cannot get more accurate or fast than that, for starters.

The currencies chosen were the 4 major pairs, with an addtional 2 secondaries.

In every case there was lagging, or out of sync, or volatity where none existed in the real market.

This testing was done on a demo account.

I should think the prices and spreads and progression of movement on both demo and funded accounts ought to be the same, otherwise there is no point in providing demo accounts at all would you not agree ?

My comments "in general" refer to fast instruments, and not to UK shares which in comparison to fast and highly liquid derivatives are, with respect, in comparison, like watching paint dry you must concur.

Soc

Yes, I agree with your point re "paint drying", and I suspect you're right (but aren't qualified to say) that they're a little out of line with fast moving instruments.

I do however suspect, from memory, that the demo prices are actually delayed for some reason. It may seem daft but I thick it is often so. But that's for someone else to answer. Maybe Simon of Capital Spreads will comment, if he sees this.

Apologies that I missed the gist of your point.

Cheers,
UTB

 

[capitalspreads]

Blades

as you have requested i will make a comment here about FX feeds in general. Banks will put their own prices into trading platforms and onto FX feeds whereas we do not. We use prices from various bank sources to create our own price. We have to use 'their prices' to make 'our prices' to put out on our platform. A sequence that may at times have a very slight lag. Remember Bank quotes are not always as perfect as you may believe either as one quoting bank at times of volatility may have a differing opinion to another. This is why highs and lows on FX charts are different depending on who you look at. We have e-signal, bloomberg, reuters and tenfore charts and it is rare when they agree on not just highs and lows but also on the exact tic price at any given moment. It benefits us not one jot to have a delayed price on our platform as this only gives clients the opportunity to try to get in on advantageous prices (which loses us money) or causes bad feeling when we are forced to reject the trades.

Our demo platform is live but is run on a less powerful system than the live platform. The feeds are also 'general feeds' not our more accurate live ones which may lead to blips etc. The demo platform is really there to teach people how to use trading platforms and to be able to try out trading strategies. It is not there to see whether you can scalp fx prices.

Simon

 

[oildaytrader]

They do not have a dealing desk anymore for minis.

Anybody with recent experience with FXCM?