Mystery Broker

FXCM Forex Trading Broker Review | Superchoice Forex

May 2020

Unboxing

In the box

Cost of the box

Opening account speed

Minimum deposit

Leverage

Deposit & Withdrawal
Customer support
Education
Research
Speed of execution
Product portfolio

Spreads

Commissions

Hidden fees

Total Score: 8 / 12

FXCM Broker Review Summary

Our ‘Mystery Broker’ provides a review of an anonymous forex broker, so you can compare our selected top brokers to another broker in the industry. The broker we selected as our mystery broker is an industry powerhouse, FXCM. They were established in 1999, however were only issued an ASF licence in 2007, an 8 year gap. FXCM’s key selling point is zero commissions. Whilst that sounds good on paper, I will be breaking that down to see how it works later in the review. So without any further ado, read on to see how they stack up against the SuperChoice top brokers.

Unboxing – Opening an account with FXCM

Opening an account with FXCM is seamless; their same day verification process allows clients to get trading on the same day. I was verified with them within 3 hours at most. They only offer leverage up to 400:1, which is below the industry standard of 500:1, losing them a point here. They do offer no minimum deposit, which is great as it allows traders to get started with however small or large an account as they see fit.

Score = 2/3

With same day verification and no minimum deposit, FXCM has been awarded two points here. They have lost a point for leveraging as they do not keep up with the industry standard, however 400:1 is adequate leverage for most traders.

Opening a Forex Trading Account with Vantage FX

What’s in the box? FXCM Broker Review

FXCM has a range of funding methods but are limited in their base currencies, offering only AUD, NZD or USD. Popular funding methods include POLi, credit card and bank wire. I was able to fund the account easily enough, but I’d imagine foreign clients may have issues with the limited base currencies.

FXCM has Industry standard 24/5 support. It wouldn’t be a SuperChoice review if I didn’t put this to the test! The live chat took over an hour to get back to me, pretty slow, so I’m not very impressed there. They do offer their email, phone numbers and even a SMS support service, which I haven’t seen anywhere else, so props there.

Being a powerhouse broker, FXCM offers some great educational content and market analysis. They cover Forex basic courses, traits of successful traders and run webinars every day on DAX, London and US open. They also feature a Cryptocurrency webinar every Wednesday. These webinars are of reasonable quality and a great touch by FXCM in supporting their clients trading success. FXCM has an analysis section on their website, keeping traders updated with fundamental and technical news and opportunities.

They also provide a set of trading tools to integrate with MT4 as brokers typically do. Something quite appealing with FXCM is that they integrate with the Tradingview.com charting software and enable traders to trade entirely from Tradingview. They also give clients access for 1 year to the Tradingview Pro Plan for free.

Their range of tradable products is quite small, limited to 39 currency pairs and a few indexes, indices, cryptocurrencies and commodities. This could certainly be improved as it is not competitive at all with the industry.

FXCM boasts their low slippage rates, with 70% of their orders not receiving slippage. They also state that 69% of the limit orders that experience slippage have positive slippage. Trading with them I found the slippage quite low and generally favourable, but due to their spread pricing options it is quite difficult to place limit/stop orders accurately. Order execution was not an issue for me and they boast an average of 0.02 seconds (20 milliseconds) order fill, which is quite competitive considering IC Markets averages under 40 milliseconds for execution.

Score = 5/6

FXCM offers customer service, however they run too slow, come on FXCM! They have okay trading conditions, quality trading tools and support for their clients, nevertheless could definitely enhance their range of tradable products.

Cost of the box – FXCM Fees, Spreads and Commission

FXCM has spread based commission, meaning that you pay $0 a trade, but in return trade on wider spreads. The spreads offered by FXCM are not at all market competitive. Their average EURUSD spread is 1.2. Whilst no commissions sound good, a spread of 1.2 on one standard lot equates to $12, nearly double the $7 round trip commission you would pay at IC Markets! In addition to paying the spread, it is considerably more difficult trading wide spreads as traders have to factor the spread in when setting stop losses, pending orders and target prices. The pricing with FXCM is honestly atrocious, with the EURUSD being the lowest average spread of all their offered pairs. They do not charge any additional fees or charges.

Score: 1/3

FXCM has terrible product pricing that is not at all market competitive, however they are transparent on their pricing structure and do not charge any non-trading fees.

My experience trading forex with FXCM

My experience with FXCM is quite disappointing. As a powerhouse broker they offer the glitz and glam that bigger brokers have such as education and market analysis, and the ability to link to Tradingview is some good value, however their range of tradable products is minimal, their leverage does not meet industry standards and their pricing alone is enough to turn any trader away.

Total Score = 8/12

Leverage

In terms of trading, leverage is borrowed capital that allows you to increase your potential profits or losses. In Forex a common leverage amount offered is 100:1, meaning that for every $1 you have you can control $100 in equity.

Margin

Margin is the collateral you must keep in your account to maintain a leveraged position.

Open A Forex Trading Account

Opening a trading account with an Australian Forex Broker is an easy process that can typically be completed within a matter of minutes. To open an account with a forex broker there are three main steps:

  1. Fill out personal information
  2. Verify account with documents
  3. Client Qualification questionnaire

To open an account, you will need to provide your full name, nationality, email and phone number. Once you’ve completed these and set up a password you will typically be asked to choose the type of account and the trading platform, as well as your base currency. You will also be asked for your country of tax residence and tax details (TFN for Australians). Typically, providing specific tax information such as TFN is not compulsory. Brokers will also ask if you are a politically exposed person. The final personal information you must provide is your contact information, including your full address and how you would prefer to be contacted

The next section is financial information. Here you must provide your employment status information, annual income bracket and liquid net worth. Once you are through this section, the broker will ask your about your trading experience (Years) on securities, options, commodities, futures, CFD’s and OTC Forex Exchange, and if you understand the risk of margined transactions.

The client questionnaire assesses whether your knowledge of CFD’s is suitable for opening an account.

Margin Call

A margin call is a demand from the broker for the client to deposit funds to meet margin requirements for open/closed positions.

Short Position

A short sell is a position where the trader anticipates the price of an instrument to decrease, and sells a borrowed asset to buy it back in the future.

Long Position

A long position is a buy position, where the trader anticipates the price of an instrument to increase.

Test2

This is a test, all systems go!

Indicator

An indicator is something that assists traders finding where to enter and exit trades. An indicator could be calculated like a moving average or RSI or a drawn support/resistance level.