FXCM's execution acted almost exclusively as a market maker up until 2006. However, your knowledge of FXCM's execution on NDD introduced to accounts in 2006 is incorrect.
You keep attempting to build a mountain out of a mole hill here, Jason. Why? Why do it in full plain view, when I've already exposed the true nature of FXCM in this thread already. It makes no sense to continue fighting for what does not exist. Why do you continue to do it?
Our NDD system doesn’t have a Dealing Desk that trades against you, plain and simple. Even on Micro, which is not currently NDD, we offer trading without re-quotes and intervention. And that will be NDD soon as well. This is what we offer to traders.
Red Herring, Jason. Nothing more and nothing less. Go re-read what I've put up in this thread on Interbank market size and scope - THEN - come back here and talk to me about NDD, STP and wide liquidity. It is all a smoke screen at FXCM, Jason. You know it and I most certainly know it.
As stated before, we don’t state that we offer interbank access.
Thank you for telling us what we already knew. Do you mind also telling us what the difference between
Forex Access and Interbank Access actually looks like? Define: Forex -vs- Interbank.
I'm not looking for a White Paper on back-end or back-office solutions about physical "trade execution." I want a straight-up answer from FXCM on how it defines what it is selling to the Newbie Trader. Are you selling FXCM as a Forex Intermediary - or - as an Interbank Intermediary, or does FXCM even bother to make any distinction at all.
I have clearly articulated my position on this question already inside this thread, so there is no mistaking my view on the subject, White Paper aside.
Take a look at
www.fxcm.com,
www.fxcm.co.uk, or any other of our marketing websites. A Google search of
www.fxcm.com or
www.fxcm.co.uk for the term “interbank” comes up with only 3 to 5 entries, and none of these references any claim that NDD offers “Interbank” pricing, liquidity, or execution in any way.
Oh, I see. Ok, so.....well.....if FXCM does not offer "Interbank Access," then what precisely does FXCM offer the Newbie Trader?
What we claim is that FXCM’s No Dealing Desk Execution offers traders a trading system where “10 banks compete to provide tight spreads”.
Oh, I see!
You now drop the entire word
"FOREX" from the discussion
here and replace that word with a phrase
"TRADING SYSTEM." How convenient is that. So, absolute NO Forex Access and absolute NO Interbank Access. Yet, in a previous post of yours right here inside this thread, you claimed that there was something flawed about my definition of what "Interbank" truly meant. Remember that statement you made, Jason?
You generally suggested that my definition of "Interbank" was over-broad and you then implied that the FXCM "10 Bank" offering, was
also or
likewise, Interbank too. You never implied that it was a
"TRADING SYSTEM." You never did that until I pulled it out of you here in this thread.
It’s pretty simple, either your broker has a bunch of dealers trading against you – possibly hunting stops, rejecting trades, and or requoting - or they don’t. If you trade on NDD, your broker won’t be trading against you. Trade with a Dealing Desk, and they might be.
Shifting to the side of the supposition where you know you don't reside and then merely re-quoting the "truth" as though you were actually a part of it, does not change or alter the true Bucket Shop Basket Weaving nature of FXCM. No amount of pontification about the truth, absent actual adherence
to the truth will either alter the truth, or place you on the side of truth, if that is not where you already reside.
That’s a good point. I’ll have that page changed.
If I actually needed the job, maybe, FXCM would hire me.
However, I'll point out that this reference is buried in the middle of an enormous block of text on a page that, in the past 12 months, has gotten between 5 and 38 page views per week.
Well, that's the point here, Jason! Newbies, are not likely to dig into this kind of stuff - but you won't pass it off on a seasoned vet. BTW - who put that "enormous block of text" on that web page anyway? Did the FXCM competitors put it there, just to confuse the Newbie Trader? Inquiring minds want to know.
It’s true, FXCM’s NDD system is not Autobahn or BARX or HSBCnet. We never claimed it was.
But, that assumes and implies that someone else did claim that you were and that never happened either. These were not even comparisons. These were mere facts that I wanted every Newbie to fully understand when they go to a Bucket Shop like FXCM and actually think that they are trading the real Interbank market in all of its depth and breadth - that's all I am doing here.
It is called:
Truth In Advertising. Remember?
Just because you don't state a thing, does not mean that you fail to imply that same thing.
With FXCM, you can be trading with amounts in the thousands, not the millions, and most anyone can sign up within a couple business day. And by trading on NDD execution, even in lot sizes as small as 10k, the conflict of interest between trader and broker is eliminated.
And, all the while, never ONCE be trading the actual Forex or Interbank Market in all of its richness, as implied by most FX Brokers - either directly or indirectly (see last statement above). This is the dirty little secret behind what you guys are doing, Jason. I'm just putting a spotlight on it inside this thread, that's all.
Do Dealing Desk brokers have ticket volume limits because they’re taking the other side and can’t handle anything too big? Yes.
Thank you, finally.
Is that the only reason to have ticket volume limits? No.
Oh, do explain.
That’s a leap of logic that doesn’t hold up.
Prove it. Or, better yet,
proof it.
We have ticket volume limits for a variety of reasons that enhance our product, not because we’re trading against you.
Let's see one of them, please.
Convoys move at the speed of its slowest ship, so our blanket $50M per ticket limit applies to EUR/USD at London Open (which typically has massive liquidity) just as equally as it applies to GBP/NZD at Friday US Close (where it’s a surprise if anyone’s still even trading).
LOL! You can't be serious, Jason.
Is this
proof or proper justification for why FXCM behaves just like any other Bucket Shop? The ole "Convoy" excuse might work on somebody less adept at this topic, Jason - but you are going to have to try a little bit harder, when attempting to pull the wool over my eyes.
Why? Have you looked at the executable pairs on the FXCM platform lately? Yeah, that's right, it is loaded with pairs with
far less liquidity than merely the relative lacking liquidity of NZD linked pairs, Jason. So, if you are going to use the "slowest moving of the convoy" logic here, then that would also have to extend all the way down the food chain to pairs with far less liquidity then NZD alone. This blows your "slowest moving member" theory out of the water -
entirely.
Why? Because, in order to apply that logic across the board of what the FXCM platform offers in terms of traded pairs, the max notional value per click would be far less than $50MM.
Not a very impressive argument, Jason. Now, reload and try again. Only this time, select a better logical premise and check the back-door logic
before you make your declaration.
(did you attend any debate classes in college?)
The EUR/USD is not the reason for the limit, the GBP/NZD is.
That's incorrect.
Why? Because, in order for that to be true, you would have to hold all other currencies with far less liquidity than NZD, which are
also executable on your platform, to the same logical standard, which would by definition reduce the single click notional value well below $50MM as a simply mathematical fact.
Logically, you can't have it both ways, Jason. This is a failed theory. Try again and check your premise, first. (you should have attended those debate classes!)
We could talk about the average ticket size of retail traders; We could mention how you can call in for a bigger order; We could even get into conversations bank “industrial” feeds (which have a lot more liquidity, but speculators get quickly banned from) are like comparing apples to oranges, or talk about the volume levels that people typically still use phones to execute. We could talk about how this is the maximum amount available per click, and that you can click through several $50M trades very rapidly if you choose. If you want to put through trades of this size, it's best for you to view the market depth, whether EUR/USD or GBP/NZD, and the Active Trader platform is more suitable.
And, after we were done talking about all of that "work-around" nonsense, we STILL would
NOT be talking about trading the real Interbank market with anywhere near its true depth and breadth of liquidity - and - that is the point to this exercise.
Furthermore, if this logic were to hold up (and it clearly does not), then such limitations would or should ONLY apply to those pairs linked to currencies with less than adequate liquidity, as defined by FXCM in its syllogistic reasoning for why the $50MM notional limit exists in the first place.
Bingo - just like that, I've proven the logic to be flawed from two different vantage points:
1) The lack of liquidity in executable pairs on the FXCM platform that extends well below NZD.
and...
2) The
inverse of the logic that sets the syllogism for restricting the notional value down to $50MM in the first place.
Here's a hint, Jason:
Before you make an argument about anything (anything in life at all) - always (first) check the INVERSE of the premise for the argument to see if you might have left a back-door open, wide enough for your opponent to drive a Mack Truck through it.
Never leave the Inverse of your argument
uncovered/exposed. Debate 101. You've done this now, five (5) times since you opened this thread and I engaged you. Exactly how many more times will you make this error in judgment, before you realize what it is costing you with every keystroke?
Tactically flawed debate. Easily defeated. You are not making FXCM look good, here.
Again, from our website “When a customer clicks on a price, they are actually clicking on a price from the bank that currently has the best bid or offer, plus our markup.” We run standard markups, usually a pip for most pairs. If you want to call that “manipulating the price”, then we’re just playing semantics. The key here is that the markups are consistent.
Oh, come on, please! Sell it to a Total Neophyte, but pleeeeeeze don't attempt to sell this stuff to me, Jason! You are insulting my intelligence at this point in our conversation here and I was really starting to like you! Seriously, I do like your demeanor.
I told you that one day, you can come work for me and I meant it. :idea:
The point to this exercise is to inform the Newbie that when they sign-up with FXCM and click on
"that price," that they are not clicking on a price provided to them through their Intermediary from the full depth and breadth that the true Interbank market provides - AND - furthermore, that when they see such pricing on the FXCM trading platform, they are to be fully aware that the
un-real Interbank pricing they see, has
also been altered to include a gift wrapped guaranteed profit for the Bucket Shop that holds their Retail Account.
So, not only are the "prices" bogus, relative to true Interbank rates, but they are
also manipulated by FXCM as well, by logical definition. Undeniably, true.
That is NOT merely a semantically driven delusion of mine. Nor, is it a distinction without a difference. In other words, the two concepts are
not fungible, Jason. There are very tangible distinctions between what FXCM does and what a true Interbank or Forex Intermediary offering genuine straight through processing (STP) through a real ECN Hub Architecture does for its customers and for its liquidity providers.
I’m sorry if you don’t buy it, but it’s true.
I've proven it to be un-true.
Many people didn’t believe that earth revolved around the sun, but that didn’t mean that Galileo was making things up.
Galileo, did not discover this fact. A full three hundred years before the birth of Jesus Christ, the Greeks had already laid the framework for heliocentricism, but it was not until Copernicus arrived with his mathematical model in his 16th century European environment, did the world begin to realize that just maybe, the world was not at the center of the Universe. I'm very well read on Einstein and Newton. I realize that Einstein gives Galileo credit for being the "father" of modern day model based astronomy and even modern science as we know it. However, nothing and no one can take away the mathematical conclusions that Copernicus made before Galileo. And, I'm certainly not going to be the one to disrespect the work of Copernicus, here.
Having said that, FXCM seems to think the 'world' is neither flat and nor round, but stupid.
The markup stays fixed throughout the trading day, every trading day. It’s consistent. We can change it if we want to, of course.
Which by definition means that FXCM is Bucket Shop, pure and simple.
How can the Intermediary alter that which is supposed to come from a
free market place without
manipulating the same in the process? Answer - you can't. You must be a price manipulating Bucket Shop to even consider such topics to be within the realm of natural protocol. Markup by definition means Price manipulation because you
do not charge a flat street rate commission. FXCM would have more credibility if it had left the actual pricing alone and charged a straight-up commission that everybody can live with. Interfering with "in-bound market pricing" is "manipulation" by any definition. It matters not how one wishes to dance around the subject. Interception and Interference, is exactly the same thing, here.
FXCM's price feed should merely reflect what is actually taking place in the real Interbank market with a much wider array of depth and breadth; then charge a reasonable commission on the side, for
all account types - period. No questions asked. That is the proper way to approach this business as an Intermediary, but this is not how the FXCM business model is established.
Our liquidity providers (i.e. “the banks”) give us prices, we take the best Bid and Ask, add the consistent markup, and spit it out as our platform’s price. Simple as that.
Translation:
Hybrid Bucket Shop.
Not to mention a straight-up admission that the entire STP claim is bogus, entirely! STP, is supposed to be against
real prices. If you tamper with the "real price," then you can no longer offer STP, by definition, in my opinion. This is Pip Skimming, no less and you control the actual market prices being displayed on the trading platform - so, by definition, the prices
cannot be true Interbank anymore after FXCM has altered them BEFORE they are displayed to the Trader.
This is not rocket science. I know rocket science when I see it and this is not it.
Call it a “mid-sized regional hub city”.
Ok, I'll grant that label.
But, it is still NOT true Interbank with its real depth and breadth of liquidity - not even close and my numbers (math) proves that fact beyond any shadow of any doubt, whatsoever. So, stop selling, by way of implication, that Newbies trading with FXCM will at the same time, somehow also be trading direct to the
broad/deep end of the Interbank or the Forex pool. They are not - pure and simple. Therefore, no one at FXCM can make the claim that "Best Bid/Offer" from either Interbank or the Forex, is being delivered to the customer via the FXCM trading platform.
So who are these “banks” that are on our system? I can’t disclose them because of NDA’s. I wish I could, but I simply can’t.
Some of your Competition has no problem whatsoever in disclosing who provides the liquidity under their trading platform, so why would FXCM enter into such an agreement with the very sources providing liquidity to those who use the FXCM platform? It makes no sense, whatsoever - especially, if they are "household names" in the Global Banking Industry.
What is FXCM hiding? Why only 10 Banks?
Your Competitors
that use FXall shows off their
liquidity proudly for the entire world to see:
FXAll
Your Competitor
Divisa Capital FX shows off their
relationships proudly for the entire world to see:
DCFX
Your Competitor
LCG shows off their
relationships proudly for the entire world to see:
LGC FX
Et, al.
That’s just not true. Page 9 of the BIS Trienniel survey
http://www.bis.org/publ/rpfxf07t.pdf?noframes=1 (table B.4) points out that only 12 banks in 2007 held 75% of UK FX volume (estimated to be 34% of the global total), and 10 banks held 75% of US total volume. You and I both know a lot of the same banks appear in both those lists. A lot of them are also providing us with liquidity.
What's not true? Precisely define what was stated that was not true, please. I'm very familiar with BIS and what they report. I was the first to post their report here on this forum for the edification of other traders in this community.
75% of U.K. + 75% of U.S. (total volume numbers) represents
far more liquidity than what FXCM is offering through its "10 Bank Product." Only a very desperate firm would even attempt to argue otherwise. That also leaves out of your equation, 25% of the rest of the world. Yet, your traders cannot execute on 0.000025% of the total daily volume contained in just one pair - the EURUSD This does not even include the other pairs!
Who are you trying to kid?
I stand by my post that you said we have fixed spreads and this is not true.
Fixed simply means that FXCM so manipulates the spreads, such that they do not represent TRUE Interbank spreads from the vast depth and breadth of liquidity found on other real STP/ECN 'type' platforms. That's what "fixed spreads" mean. You can't promise "tight spreads" unless you are manipulating them to begin with - pure and simple. Why? Because that's part of what makes real Interbank liquidity so deep - it's continuously producing spreads that are by definition not tight, which cuts against the grain of the FXCM marketing hype were it virtually promises "tight spreads."
Now, what would truly produce so-called "tight spreads," would be more genuine competition on your trading platform and not the behind the scenes forced agreements between liquidity partners that make it "appear as though" more liquidity actually exists. Healthy competition has the net effect of lowering prices (Econ 101). If the FXCM platform had true Interbank depth and breadth of liquidity, there would often be times when the customer was trading with No Spread at all as seen on other, more liquid trading platforms.
A sophisticated Bucket by any other name, is still just fancy way to bathe your car.
Neither are FXCM’s spreads “manipulated” by an algorithim for FXCM’s benefit. Our website explains how the NDD Price feed works: “When a customer clicks on a price, they are actually clicking on a price from the bank that currently has the best bid or offer, plus our markup.”
http://www.fxcm.com/fxcm-forex-execution.html .
Then by physical and logical definition, FXCM must manipulate the price feed, or there would be no so-called "Best Bid or Offer." You keep trying to have your cake and eat it too. If the pricing was real and robust, then you would present liquidity at true depth of market.
You can't make the claim of No Price Manipulation out of one side of your mouth, then turn right around in the VERY SAME BREATH and claim "Best Bid Algorithm + Markup" out the other side of your mouth. If FXCM were the real deal, then it would simply charge a straight (flat) commission with no price feed manipulation; show all market depth available under its platform and allow the Trader to do what the Trader does naturally, which is engage in business transactions that are to the benefit of the Trader. Pure and simple. Such a platform would also provide the Trader with a full spectrum of access to a broader and deeper pool of liquidity that more closely approximates the full depth and breadth of what mainstream Interbank has to offer. This should be crystal clear at this point with zero ambiguity.
When FXCM claims "Best Bid" - that's a very misleading statement. Why? Because how on earth can FXCM or the Trader actually know what "Best Bid" even looks like, when FXCM is not providing the Trader with direct Interbank or Forex Access to anywhere near its rich and robust scope. Case in point.
Whether we choose to use a fixed pip mark-up or charge a commission as with FXCM Active Trader, NDD straight through processing is operating the same. You see the best bid or offer which is determined by the 10 banks quoting on our platform.
And, ONLY from those "10 Banks" - NOT even remotely a truer glimpse into the real Interbank depth or breadth.
I think that I have proven (time and time again) inside this thread, precisely what makes FXCM a Hybrid Bucket Shop and nothing more. As long as the Newbie is fully aware of this fact BEFORE they blindly open an account with FXCM, then that's fine by me.
I have no axe to grind here - but I am sick and tired of all the hype surrounding this entire question of whether or not Retailers are trading Forex, Interbank or the Market Maker's Proprietary Liquidity Pool.
Fact:
When you trade with FXCM, you are NOT trading true Interbank prices. You are trading a Proprietary Liquidity Pool that has been constructed expressly for the purpose of sequestering a niche Retail market that thinks it is actually trading at Interbank levels. This is the truth about FXCM and Bucket Shops like it. And, nobody is going to romantically argue to the contrary successfully, here. Nobody.
I could give you dozens of prime example of what makes FXCM just another Bucket Shop. For example: Order Types. This is a telling sign that you are dealing with a Bucket Shop of some kind, one way or another. Just look at the total lack of Order Functionality built-into the FXCM trading platform. The most advanced order type that you can enter is an OCO - that's it, folks! Now, compare that to other types of trading platforms that allow the Trader true (genuine) flexibility in their order execution.
Functionality such as:
Variable Pegged Orders
Iceberg Orders
Hidden Orders
TWAP Orders, etc.,
...all such functionality helps the Trader to maximize order entry and as a direct result, helps to optimize profit potential.
Yes, in most cases, you will need larger amounts for opening accounts on platforms that offer this kind of flexible order processing on the front and back end, however, the Newbie needs to know some of the things that differentiate the Bucket Shop, from a true Interbank Intermediary.
Maximum Order Size, is another dead give-a-way that you are most likely dealing with some kind of Hybrid Bucket Shop and trading on either their books or through their Private Proprietary Liquidity Pool and NOT the full scope of Interbank.
There are plenty of other readily identifiable markers that tell you what you are dealing with, when you open up your trading account, but I am absolutely certain that I've gone above and beyond what it necessary to prove beyond a shadow of any doubt, that FXCM is a Hybrid Bucket Shop of Epic Proportions in the Retail FX "niche."
Trade there and anywhere (for that matter) at your own risk- but especially be aware of what makes a Bucket, a Bucket, indeed.
