Hello PartyPips,

I do appreciate your post.

FXCM UK accounts have access to the same no dealing desk execution that our FXCM US accounts access.

With No Dealing Desk execution, each and every order is executed back to back with a global bank or financial institution. Whether your order is filled at the price you click on or slipped, FXCM makes the same amount of money. FXCM is not making a market so we are not deciding at what price your order is filled at; however, there are 9 banks quoting on the platform to provide competitive execution.

Depending on the type of order being used, there could be slippage. And slippage is not unique to the forex market. Here are the possible types of orders on the FX Trade Station: Market, Stop, Limit, Entry.

If you're executing a market order, there is a way to limit the amount of slippage you are willing to accept. This can be done by selecting either At Best or Market Range as the order type in the market order window. At Best will execute the order at the best price available. Your order will be executed, but there could be slippage. The second order type, market range allows you to specify the amount of slippage, if any, you are willing to accept. While there is more control over the prices you are executed at, the order may be rejected if the price is no longer available by the time it reaches the bank.

For Stops and Limits, they will follow stop and limit rules. A stop order by definition is always going to execute as an At Best market order. Limits will only be filled at your price or better subject to liquidity. Here is where we have detailed the complete execution policy http://www.fxcm.co.uk/execution-risks.jsp

While it is our goal to provide the best execution possible, the banks are not offering an unlimited amount of volume at each price. Despite that, if you ever have any doubts about the execution of a trade, please contact our client services and we can perform a trade audit.

Kind Regards,

Jason

It is nice to see some rep from FXCM responding to questions.

I have few questions and not sure whether you can answer them honestly or not

1. Since more and more regulations are expected, does FXCM has any internal/external audit for compliance or check/monitoring for improper execution if the trades are executed in Broker(FXCM's)favor?
2. In what way, one client can be sure that there are NO software (intentional bugs/programs/api) are placed in your order execution system/software that the orders be processed in favor of FXCM instead of the client. I am referring to the increasing occurence of slippages in the favor of FXCM rather than the client? How this is possible unless there is a program which looks for the benefit of FXCM before executing the trades?
3. Since we have no control over or knowledge on how your order processing software we are at your mercy and with not much regulations/monitoring done with forex compared to equities/forex.

So can you guys/CEO can go on record that there is NO specific software bugs/apis which 'process' the orders in favor of FXCM?

Thanks

Kent

Hi Kent,

Thanks for the questions.

It’s first important to understand how FXCM is making money whenever you place a trade to know what benefits FXCM.

FXCM uses no dealing desk execution on MT4 and standard 10k accounts. Each order is executed back to back with a global bank or financial institution. FXCM makes money based on transaction volume and not by taking the other side of trader positions. So the more volume you trade, the more money FXCM makes. This is why our reward program gives tighter spreads to high volume traders.

FXCM makes the same amount regardless of whether your market order is filled at the current price or slipped to the best price available. There’s no additional benefit for FXCM if your stop is slipped.

Whenever you place a trade, the order is sent to the banks for the price you requested. There is not an unlimited amount available at each price. If the amount you requested is still available at that price it will be filled. If not, it will try at the next best price. Again, there are 9 banks providing prices, so it will attempt to fill at the bank with the best price available.

If there is ever an occurrence where a trade executes when it should not have (which would provide FXCM with a portion of the spread) then our trade audit team can make the necessary adjustments. A good example of this would be a bad tick which occurs when an indicative price is quoted by the banks and manages to trigger orders when it should not have.

-Jason

Jason.

Thanks for your elaborate reply but you avoided answering my questions completely.

I will try again.

1. Does FXCM has any software/API/logic in their trading so that FXCM's interest is protected in a +ve way like rejecting an order if the price moved -ve in their favour and accept only IF IT IS in FXCM's favor.
Just answer this YES/NO/CANNOT TELL

2. In the absence of any monitoring agency, is there any internal Audit/external audit work is done on your trading /execution software so that nothing of the above sort is allowed. Again just answer YES/NO/Cannot TELL.

This way, we can be sure what we can expect from FXCM

Thanks

Kent

Hi Kent,

The short the answer is no because the way you described it is not how our execution model works. That's what I tried explaining in the previous post.

This is not you versus FXCM and who gets the better price. The price being quoted is not from FXCM. It is directly from one of the 9 global banks providing prices on our platform. This is no dealing desk execution so you are getting the best price available period. The order is executed back to back with the bank at that price. FXCM is not involved with setting that price.

In order for FXCM to benefit favorably or unfavorably from price movement, we would have to be taking the other side of your trade (profiting when you lose). That is not how our no dealing desk execution model works. That conflict is gone.

Your second question can't be answered because what you described is not how our execution works. I apologize if I was not clearer in my previous post; however, the question is not relevant to no dealing desk execution.

Kind Regards,

Jason

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Jason

You stated standard (full lots 100,000) in your first post. What about your mini lot size banks typically dont take them. do you bundle them up before sending them out? or do you keep them in house? (take the other side) How are the mini handled?

Keit

hi Keit,

All 10k and 100k lots in the standard 10k and MT4 accounts are executed via no dealing desk execution. This order flow makes up the vast majority of our volume.

The 1k micro lots through FXCM Micro accounts are not directly offset. These orders are first aggregated through FXCM's dealing desk and then offset with the banks to manage total risk. The reason for doing this is because only two of the nine banks we deal with will currently execute micro lots back to back from traders. Offering no dealing desk execution for microlots would mean poorer execution for everybody.

Jason

FXCM is in the process of setting up free VPS for MT4 accounts, and we're looking for beta testers. If you're interested, please let me know.

Are you official FXCM stuff or just a forum user, Jason?