Caught FXCM Cheating Virtually 15 Minutes Ago

Trader333 said:
In my view they are not a true DMA broker in the same way that IB are unless things have changed. If they were then they would be unable to manipulate quotes because the nature of DMA means there is no middle man and all quotes come from the exchange.


Paul
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Hi Paul,

With NDD forex execution, the pricing engine automatically displays the best bid/ask price from 10+ liquidity providers and pricing is updating constantly as the stream of prices come in. FXCM adds a pip mark-up onto the best/bid offer spread as compensation and that's what you see on the platform. The video mentioned in the previous post located on our website Forex Execution, No Dealing Desk | FXCM gives a step by step overview of how the process works and simplifies it with only 2 liquidity providers. If you view the tick history in the Marketescope chart using Table mode, you'll get a better sense of the level of price competition occurring between the liquidity providers, and I've seen the quotes update upwards of 10 times per second as the best/bid offer changes between liquidity providers.

Jason
 
safvan said:
Jason

Thanks for the clarification but please define the term corrected.

1. Are the trades that were not triggered but were triggered due to this cancelled?

2. If the trade was open and was in profit what happens?

3. If the trade was open and was in loss what happens?

These are very important questions because it makes an impact on profits and losses.
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Hi safvan,

No problem at all.

By corrected, the trade will be adjusted so that it doesn't impact your account, regardless of whether it ended at a profit or a loss. You should be no better and no worse off due to the bad tick. If the execution was incorrect, it was incorrect. Every possible scenario will be corrected such as whether you had a trade closed by stop/limit incorrectly, a new position was opened by entry order but shouldn't have, maybe the entry order should have opened later, etc.

Jason
 
Jason Rogers said:
By corrected, the trade will be adjusted so that it doesn't impact your account, regardless of whether it ended at a profit or a loss. You should be no better and no worse off due to the bad tick. If the execution was incorrect, it was incorrect. Every possible scenario will be corrected such as whether you had a trade closed by stop/limit incorrectly, a new position was opened by entry order but shouldn't have, maybe the entry order should have opened later, etc.

Jason
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I think this raises as many questions as it answers...let's say you were stopped out due to a bad tick, then market then moves strongly into your favour to where you may have closed part or all of your position or where you may have moved or trailed a stop, then goes back to where the stop originally was, are you going to compensate for potential profits? Or just say that the market hit your stop 'at a later time or date' so 'no compensation is payable'. Or let's say that at the time of the complaint the stop level was not again touched except by the bad tick, does that mean the original position is re-opened? This could get really complex. And is the compensation at FXCM's expense or do FXCM's liquidity providers have any involvement?
 
Barramundi said:
I think this raises as many questions as it answers...let's say you were stopped out due to a bad tick, then market then moves strongly into your favour to where you may have closed part or all of your position or where you may have moved or trailed a stop, then goes back to where the stop originally was, are you going to compensate for potential profits? Or just say that the market hit your stop 'at a later time or date' so 'no compensation is payable'. Or let's say that at the time of the complaint the stop level was not again touched except by the bad tick, does that mean the original position is re-opened? This could get really complex. And is the compensation at FXCM's expense or do FXCM's liquidity providers have any involvement?[/B]
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The ones in the bold are the questions I would like the answer to especially the last one. Where does the compensation come from if FXCM is just a middle man?

A frank solution would be to cancel the trades all together but if the liquidity is provided by the third parties this tick's losses must be born by FXCM.

You see its so fishy it cannot be easily explained.
 
safvan said:
The ones in the bold are the questions I would like the answer to especially the last one. Where does the compensation come from if FXCM is just a middle man?

A frank solution would be to cancel the trades all together but if the liquidity is provided by the third parties this tick's losses must be born by FXCM.

You see its so fishy it cannot be easily explained.
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I don't understand what you are going on and on about. Jason answered your questions very directly and straightforward. What didn't you understand about this quote from him?
By corrected, the trade will be adjusted so that it doesn't impact your account, regardless of whether it ended at a profit or a loss. You should be no better and no worse off due to the bad tick. If the execution was incorrect, it was incorrect. Every possible scenario will be corrected...
Click to expand...

If he is incorrect, or you are calling him a liar, or someone can demonstrate that did not happen with their live account then that would be an issue. Other than that what's the problem? You want an answer to a hypothetical situation where you might have "potential profits"? That doesn't even make sense and can't be answered.

Another thing, why would it matter to you where the money came from? If you were out money due to an error and FXCM (or any broker) makes it whole would you give the money back because it came from some source other than FXCM or the broker??

Honestly, I don't know what some of you people are smoking these days.

Peter
 
wackypete2 said:
You want an answer to a hypothetical situation where you might have "potential profits"? That doesn't even make sense and can't be answered.
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This thread started because safvan alleged that FXCM engaged in "stop hunting", which as you would be aware is aimed at stopping traders out of what would likely become potentially profitable trades. I only say potentially profitable to suggest that after being stopped out the market moved in favour, giving an opportunity to take profits, but that FXCM can have no way of knowing at what level the trader intended to close the trade - they may even have hung on and exited for a loss! I would like to know how FXCM goes about calculating the adjustment to a traders account in such a case when a trader is stopped out by a bad tick and then the market moves strongly in favour.

wackypete2 said:
and Another thing, why would it matter to you where the money came from? If you were out money due to an error and FXCM (or any broker) makes it whole would you give the money back because it came from some source other than FXCM or the broker??.
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It makes no difference to me, I'm curious, that's all.
 
Last edited:
A priest dies and is waiting in line at the Pearly Gates. Ahead of him is a guy who’s dressed in sunglasses, a loud shirt, leather jacket, and jeans.

Saint Peter asks this guy, “Who are you, so that I may know whether or not to admit you to the Kingdom of Heaven?”

The guy replies, “I’m Johnny Ringo, a forex broker from New York City.”

Saint Peter looked through his list. He smiles and says to the broker, “Take this silken robe and golden staff and enter the Kingdom of Heaven.”

The broker goes into Heaven with his robe and staff, and it’s the priest’s turn. He stands erect and booms out, “I am Jacob Silk, pastor of Saint Mary’s for the last forty-five years.”

Saint Peter looked through his list. He says to the minister, “Take this cotton robe and wooden staff and enter the Kingdom of Heaven.”

“Just a minute,” says the minister. “That man was a forex broker – he gets a silken robe and golden staff but I, a priest, only get a cotton robe and wooden staff? How can this be?”

“Up here, we work by results,” says Saint Peter. “While you preached, people slept, but his clients, they all prayed.
 
Barramundi said:
I think this raises as many questions as it answers...let's say you were stopped out due to a bad tick, then market then moves strongly into your favour to where you may have closed part or all of your position or where you may have moved or trailed a stop, then goes back to where the stop originally was, are you going to compensate for potential profits? Or just say that the market hit your stop 'at a later time or date' so 'no compensation is payable'. Or let's say that at the time of the complaint the stop level was not again touched except by the bad tick, does that mean the original position is re-opened? This could get really complex. And is the compensation at FXCM's expense or do FXCM's liquidity providers have any involvement?
Click to expand...

Hi Barramundi,

If there's a limit attached to the order, then there's clear indication where the trader intended to take profits. If not, then you're right that it could bring up a complex situation. The audit team will work with each trader if necessary to try and come up with a fair outcome. If execution of a trade was incorrect, the trading desk will work to see that the trades are cancelled with the liquidity providers.

We're talking about a lot of What If's, and complex situations will each be given the proper attention they deserve. What's important is that the proper adjustment is made so that the bad tick has as little impact as possible on your account.

Jason
 
wackypete2 said:
Another thing, why would it matter to you where the money came from? If you were out money due to an error and FXCM (or any broker) makes it whole would you give the money back because it came from some source other than FXCM or the broker??
Click to expand...

All valid points :)

Barramundi said:
It makes no difference to me, I'm curious, that's all.
Click to expand...

In this situation, the trading desk will contact the liquidity providers about reversing the trades that occurred on a bad tick.

Jason
 
Jason Rogers said:
We're talking about a lot of What If's, and complex situations will each be given the proper attention they deserve. What's important is that the proper adjustment is made so that the bad tick has as little impact as possible on your account.

Jason
Click to expand...
Agreed, and thanks for the clarification.
 
For the average retail punter I think there are only 2 choices -

1. IB (minimum deal size of $20k which might be too rich for many), or
2. Oanda (don't know wht their minimum would be but I think it would be cheaper than IBs).

All the others (as I believe) don't come close to the ones above.

Now, if you were to open an account with Oanda and you find your stops keeping getting hit before the market makes the move you were expecting, don't blame Oanda, blame yourself for putting them in the spots where they boys know you and many others are hiding out. The boys specialise in taking candy from kids. And when I say the 'boys' I don't mean anyone connected with the online retail brokers.

So here's a novel idea for you all - only trade when there's clear evidence the stops have been taken out. Yes, that will cut down on many (possibly) successful trades but that's a good thing. Trade less and make more is oten a good creed to live by in this game........Good luck :)
 
why on earth would you use a broker that has been fined in the past for price manipulation. geez you really know how to stack odds in your favour lol. I use IG index for my chump change tardes and I have NEVER seen any evidence of them tampering with prices and I have been using them for at least 3 years. Price manipulation is common place by the larger players in the market (not broker) so tbh if you are a bucketshop you can just let punters place their bets with tight stops, take on the 'risk' yourself and collect the cash, no need to play fast and loose with the price. even then it seems some brokers get greedy and keep going for the home run.
 
MajorDutch said:
why on earth would you use a broker that has been fined in the past for price manipulation.
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Which company are you suggesting has been fined for that? If I recall correctly, Gain was fined almost half a million for price manipulation, but FXCM has only been fined in relation to not passing on positive slippage in the U.S?
 
If you want to find out which ones have been fined, look at the brokers that make a big song and dance about how they're big time 'award winners'.

Cynical but probably true. Personally 'award winning' companies scare me these days as all these awards are nothing but a massive marketing circle jerk which means the companies are big on marketing. Often the best companies are those with little marketing, they let their clients do the marketing for them or have such great products/services they don't need to market that much.
 
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