FXCM Review 2023

FXCM is a great all-round broker, especially for experienced traders who are looking for a wide range of trading tools and professional traders looking for cutting-edge computerized trading. It has a strong and transparent financial parent (Jefferies Group LLC) and is regulated in several top-tier jurisdictions. It offers the usual range of trading instruments, such as currencies, shares (through CFDs), stock indices, commodities, and cryptos (also through CFDs, but only to UK clients).

FXCM’s proprietary website is one of the best and there are many trading tools available. Independent traders will appreciate their many advanced trading tools while the more sophisticated traders who employ algorithmic trading (aka robots) will find FXCM’s platforms, with support for automated trading, particularly welcoming.

Is FXCM a good broker?

FXCM is a good broker for experienced traders with a range of trading tools, strong regulation, and support for algorithmic trading. However, it may not be ideal for beginners due to limited education and lack of passive investment options. Pricing is average, but high-volume traders can benefit from special offers. Withdrawal and inactivity fees are higher than competitors, and fixed leverage is not as flexible.

What is FXCM?

FXCM (short for Forex Capital Markets Ltd.) is a British broker founded in 1999, now part of Jefferies Financial Group of the US. It offers trading in forex and CFDs. As usual for CFD brokers, it is a market maker. That is, when you trade with FXCM, they are taking the other side of the trade. This is the normal set-up with CFD brokers because they have to make the CFD for you. 

Broker pros and cons

Is FXCM safe?

Yes, it’s regulated by four regulators, including the gold standard UK FCA. Moreover it’s a subsidiary of Jefferies Financial Group, an enormous US financial conglomerate that’s publicly listed and supervised by the US authorities. 

Is FXCM regulated?

Yes, FXCM is regulated by two top-tier regulators and two second-tier. These are:

Plus of course the parent company, Jefferies, is publicly traded and regulated by the US authorities (which didn’t restrain FXCM’s previous management, but at least the clients had someone they could call). 

Note that a lot of the investor protection depends on which legal entity you’re registered with, as does the maximum allowable leverage. For example, only clients of the UK and EU entities are covered by investor protection and negative balance protection. 

Warning: People outside of the major countries may be trading with FXCM Markets LLC, an unregulated subsidiary. According to their website:

FXCM Markets LLC ("FXCM Markets") is incorporated in St Vincent and the Grenadines with company registration No. 1776 LLC 2022 and is an operating subsidiary within the FXCM group. FXCM Markets LLC is not required to hold any financial services license or authorization in St Vincent and the Grenadines to offer its products and services.

I’m not sure what recourse someone might have if they were registered with that subsidiary and something happened. 

Canadian clients can trade with FXCM through Friedberg Direct, a division of Friedberg Mercantile Group Ltd., a member of Canada’s IIROC and the Canadian Investor Protection Fund (CIPF) (see below).

Is FXCM legal in USA?

Wow, this is a big story. No, in fact the company was banned from US markets for defrauding its customers. According to Wikipedia, in 2017 the firm paid a $7mn penalty to settle a suit from the US CFTC involving fraudulent misrepresentation by FXCM to its customers and to regulators. FXCM withdrew its CFTC registration and agreed not to re-register in the future, effectively preventing it from ever trading in the US. 

The company is now under totally new management (see Who Owns FXCM? below) and so we’re not concerned about a repeat of this debacle. Nonetheless, it’s a story worth knowing. It shows that even the strict US regulation is no guarantee that nothing untoward will happen. Of course since the clients did get their money back and the management lost its jobs, it also shows the benefits of dealing with a company that’s tightly regulated: you have legal recourse if something goes wrong.

In addition to the US, the firm doesn’t accept clients from Brazil, Hong Kong, Japan, New Zealand, South Korea, or Turkey, as well as the usual international pariahs such as Cuba and Iran. 

Canadian clients can somehow trade with FXCM but their accounts are held with Friedberg Direct, a local firm that’s regulated by IIROC. I’m really not sure how this works. If you look at the Friedberg Direct website it says in the upper left-hand corner “Powered by FXCM Technology” and asks you to open an account via MyFXCM.com. 

Friedberg Direct has a similar arrangement with AvaTrade. It looks to me like Friedberg Direct isn’t direct at anything but rather is a company that provides a way for foreign firms to offer their services to Canadian clients without getting Canadian regulation directly. 

Where is FXCM based

FXCM is headquartered in London with offices in Cyprus, Germany, South Africa, Australia, and Israel. Their affiliate, Friedberg Direct, has an office in Canada so you might say they have offices there too. 

Who owns FXCM

FXCM lost a lot of money in 2015 when the Swiss National Bank pulled the rug out from under the EUR/CHF floor and the financial firm Leucadia – since renamed Jefferies Financial Group -- came to its rescue with a loan. Jefferies now owns 49.9% of FXCM’s stock and several of Jefferies’ executives also serve on FXCM’s board. The remaining 50.1% of FXCM stock is held by Global Brokerage, Inc., which seems to be what remains of the original FXCM. However in this case the stock holding doesn’t reflect the actual control – Jefferies has at least a 65% economic interest in FXCM. 

Jefferies is a major financial services company with operations in investment banking, equities, fixed income, asset management, and wealth management. Net revenues in 2022 were $5.98bn with earnings before tax of $1.06bn. The firm has 5,381 employees globally. The company is listed on the New York Stock Exchange (NYSE: JEF).

Can FXCM be trusted?

I’d say so. The people who were responsible for the scandals before 2017 have all left the firm and it’s now under the control of a major financial conglomerate with an excellent reputation in the market. Jefferies is a major international financial firm with a wide variety of activities (investment banking and capital markets, asset management, and direct investing) with a balance sheet of some $60bn. S&P rates Jefferies’ long-term debt BBB, which is quite sound. 

Leverage

Leverage varies according to the entity you’re registered with. In the EU it’s limited by law to 30:1 for major currency pairs, 20:1 for non-major currency pairs, gold, and major stock market indices; 10:1 for other commodities and minor stock market indices; 5:1 for individual equities; and 2:1 for cryptocurrencies. One important point to stress: you can’t change the leverage. While of course you can’t go above the maximum leverage, you also can’t dial it down even if you want to. That could potentially expose you to more risk than you want. 

Accounts

The company has three kinds of accounts: standard, active trader, and professional. (They also have demo accounts and accounts for corporate clients, but those don’t concern us here.)

Fees & Spreads

There are no commissions for the Standard Account (SA), only the spread. The Active Trader Account (ATA) pays a narrower spread but also a commission. The commission (and probably the spread too) vary depending on which subsidiary you’re dealing with. 

For people trading with FXCM Markets LLC, the entity that people not living in the UK, Europe, Australia, South Africa, or Canada would be onboarded on, the spread for EUR/USD might be 1.3 pips for the SA and 0.2 pip for the ATA. But the ATA would have to pay a commission of $4 each way for EUR/USD, GBP/USD, USD/JPY and USD/CHF and $6 each way for other pairs (more in AUD for most pairs). The commission is paid for each 1 lot (100,000 units of the base currency) and is applied on a pro rata basis for larger or smaller trades, meaning there isn’t a system of tiered discounts.

What that works out to in practice is that for buying 10k EUR/USD, the spread cost to the SA holder would be $1.30 but only $0.20 for the ATA holder, but the ATA holder would also have to pay a commission of $0.40 each way or $0.80 total (buying and selling). That brings their total cost to $1.0, so a savings of $0.20 over the Standard Account.

For clients in the UK, the SA spread might be 0.7 pips and the ATG spread 0.2 pip, but with a commission of $30 per $1mn of base currency for traders who do more than $50mn a month. Over $150mn a month and the commission falls to $25mn a month. Over $500mn a month, call them up and discuss it. 

Spreads for the ATA accounts will also be tighter for other assets, such as stock indices and commodities. 

In sum, FXCM is not the best discount broker. Effective spreads for both FX and CFDs are slightly higher than the industry average. Of course, cost is just one factor involved in deciding which broker to go with. And anyway what do you care, since you’ve just made $10,000 trading BoJ intervention?

FXCM also has some non-trading fees that are higher than other brokers. For example, there’s a withdrawal fee of $25 to $40 if you want a bank transfer. There’s an inactivity fee of $50 a year after your account has gone 12 months without any trading. And if you have to convert one currency into another to withdraw it, you’ll have to pay a conversion fee (as do most other brokers) that could be anywhere from 10 to 150 pips. These non-trading fees are among the highest in the industry. 

Trading Instruments

The range of assets that you can trade with FXCM depends on which entity you’re registered with. Mostly it’s the major assets that most other brokers also offer. This should be good enough for 90% of all traders, especially novices – there are plenty of opportunities to lose money without seeking out new and exotic markets you don’t understand. But it could be an issue for more experienced traders looking for a different way to go broke than they used last time.

FX: The company offers 42 currency pairs made up of 16 currencies on its website: the standard ones plus a few more exotic ones (CNH, MXN, TRY, ZAR, HUF, ILS, and the Scandis). This is far fewer than many other brokers offer but frankly, most everyone just trades the top few anyway. (In one company I worked at, the top five currency pairs accounted for 73% of all FX trading and the top eight, 90%.) But some traders in Asia may miss the opportunity to trade local currencies. 

They also offer three FX baskets: the ever-popular Dollar Index (DXY), a JPY index, and an Emerging Market Index basket. The JPY and EM baskets are FXCM creations.

Indices: They offer 14 market indices (S&P 500, DJIA, NASDAQ 100, Russell 2000, FTSE 100, DAX, CAC 40, Nikkei 225, Euro STOXX 50, Spain’s IBEX 35, ASX 200, Hang Seng, and China A50.) They also offer mini VIX futures, Wall Street’s “Fear Index.” This should cover what 99% of traders want to trade. 

Shares & ETFs: The firm offers CFDs on shares and ETFs in the US, UK, Europe, Hong Kong, and Australia. There are lots and lots – something like 3,650. The list is 102 pages long. Good luck. 

If that isn’t enough, there are also a number of stock baskets, ranging from the fabled FAANG stocks (Facebook, Amazon, Apple, Netflix, and Alphabet aka Google) to a cannabis basket (I’ve seen this at several brokers; I wonder why?) e-sports, and several others. These are in effect FXCM’s own home-made ETFs.

Commodities: FXCM offers a good range of commodities, including energy (WTI and Brent, both spot and futures, and US natural gas) metals (gold, silver, and copper); agriculture (wheat, soybeans, and corn); and Euro-Bund futures. There are other brokers who offer more but this should be enough for all but the most serious traders.

Cryptocurrencies: They offer CFDs on 21 crypto pairs, although this includes four Bitcoins (BTC/USD, BTC/EUR, BTC/GBP, and BTC/AUD) and three Ethers (ETH/USD, ETH/EUR, and ETH/AUD). Again, these are CFDS on cryptos, not cryptos themselves. British regulations mean they aren’t available in the UK. 

Account Opening and Minimum Deposits

When you open an account it has to be in a particularly currency, known as the base currency of the account. FXCM offers four base currencies: USD, EUR, GBP, CHF, and (one assumes) AUD (CHF not available to British clients). This is fewer than some other large brokers. 

If you’re going to send them money in any other currency, there will be a conversion fee to change it into one of the base currencies. If your money isn’t in one of those currencies you might consider opening an account with any of the many online banks first and using it to change your money. 

FXCM doesn’t have any deposit fees. You can deposit your money by bank transfer or using a credit or debit card (the former can take several days, the latter is instant). Traders outside the EU can use Skrill or Neteller, two e-money providers. 

$50 is all you need to open a standard account. This is the lowest I’ve seen; usually it’s at least $100. C’mon, what are you waiting for? You’d pay more than that for a date with a girl who’s going to ghost you afterward anyway. At least you have a chance to score here. 

Opening an account with FXCM is fully digital but it can still take a bit longer than at other brokers. 

Withdrawals

Once you’ve made a fortune buying & selling & buying again, it’s time with withdraw your winnings and buy that Porche you’ve always dreamed of (or withdraw what little is left in your account so you can pay the rent, whichever the case may be). Again you have the same two options if you’re an EU citizen – bank transfer or credit/debit card – or Skill or Neteller if you’re outside the EU (as the UK is now). 

The funds withdrawal with FXCM broker is fairly slow: Withdrawals to a bank card are processed within 24 hours, but wire transfers can take two business days in the UK, up to five days for other countries, and can cost $25-$40, depending on where the bank is located. (No fees for withdrawals by credit/debit card.) Withdrawals to Skrill and Neteller can take a month! You’d be evicted by then. 

Because of money laundering laws, all withdrawals are made to the same account that the money came from (common practice in the industry).

Trading Platform

FXCM clients can use FXCM’s proprietary platform, Trading Station, or choose from a wide number of third-party platforms (depending on where they’re registered). These include:

Trading View

Meta-trader4

Zulu Trade

Capitalise AI

Plus more sophisticated clients can link their FXCM account to any number of specialized platforms that they’re already using, such as QuantConnect (which bills itself as “the world’s leading algorithmic trading platform”); NeuroShell Trader (“Trading software for building trading strategies using technical analysis indicators and neural networks” with over 800 built-in indicators); MotiveWave (a charting package that specializes in Elliot Wave and other technical analysis); or AgenaTrader (you can open 3,000 charts at the same time! Plus “market replay”) among others. But if you’re at that level you probably don’t need this guide anyway.

On the other hand, Metatrader 5 is not available. 

This is an unusually broad range of platforms that should satisfy almost all traders. 

Among these, Trading Station is their proprietary platform, so that’s the one I’ll discuss. It’s good, no doubt about it. Basically it’s a lot of customizable widgets that can be arranged to suit your preferences. You can use the seven predefined layouts or arrange them to your little heart’s content. There’s a great search function. Traders can select what instruments they want to display and these will appear on all devices that you use. The trade ticket offers a comprehensive list of order types, including many of the more advanced ones. Charting is supported with close to 60 different indicators and a wide variety of drawing tools. Trendlines automatically zoom while they’re being dragged so you can draw them precisely. You can also back test your strategies in it, taking account of trading costs and slippage – quite a sophisticated tool. 

 An economic calendar is included and you can access some of the firm’s educational and research resources through it too, but not all.

All told, the features are similar to MT4 but it’s easier to use. It’s available in both a web and mobile version (for both Android and iOs) so you can easily have it on your phone and trade on the train going to work, at the bar afterwards, on the toilet during the workday, or wherever the urge to buy $100,000 of GameStop CFDs hits you. 

The mobile version has most of the same functions that the web version does, except maybe fewer charting options, shorter time frames, and fewer of the more exotic order types. Both lack two-step logins (you may think of that as an advantage if you don’t like the hassle). You can get price alerts on the desktop model but not the mobile ones, so no opportunities to impress that young lady at dinner by having your phone beep and announce that USD/JPY has hit your target level (but maybe if she comes back to your flat where you have your desktop trading station set up…) The desktop version also has excellent portfolio and fee reports. 

If that isn’t enough, you can get more at the FXCM App store (see below).

Trading Station is available in Arabic, English, French, German, Greek, Hebrew, Italian, and Spanish.

FXCM doesn’t have in-house social trading but you can use ZuluTrade for that if you like -- just register with your FXCM account number.

Islamic swap-free accounts are available. 

Trading Tools 

FXCM is aimed at the more advanced trader and has a large number of tools that should be attractive to him or her. 

There’s a wide variety of charting options available in their charting package, Forex Charts, which despite its name can chart any of the asset classes that FXCM offers. It’s a web-based charting package that includes a large number of chart types, including some I’ve never heard of from Japan (e.g. Heikin Ashi and Renko). Plus customizable periodicity, a large number of indicators, and the ability to compare instruments by overlaying them on the same chart.

If that isn’t enough, Trading Station comes pre-loaded with Marketscope 2.0, a free charting package that allows you to trade directly from the chart. 

FXCM’s proprietary Market Scanner allows you to screen various assets using your choice of technical parameters (eg 30-day MA, RSI, MACD, etc.)

Similarly, they also offer FXCM Market Data, which gives volume and trading sentiment trends from their own order flow. This is an exciting option as there’s been a lot of research into FX market “microstructure,” which involves forecasting rates using this kind of second-by-second trading data usually available only to the big investment banks. 

If that isn’t enough, the FXCM App store offers a number of add-ons, technical indicators, and automated trading robots (aka “Expert Advisor,” or EA). Some are free, some cost money, although the company does offer free coupons worth $500 for use in the app store. A dedicated support team is available to help you in developing your own EA for the MT4 platform. 

FXCM is unusually strong in features that professional traders might want to use. It offers four free APIs connected directly to their trading server. It also has the FXCMPY Python Wrapper for those who want to build their own applications. There are also two VPS solutions that cost $50 a month but are free to those who trade more than $500k notional for three months in a row. VPS hosting allows traders to run automated algorithmic strategies, including the aforementioned robots, 24/7 on a virtual machine near to major exchanges (hence low latency – mere nanoseconds between trades being done and the robot learning about them – and no outages).

Scalping is allowed but “price arbitrage strategies are prohibited.” What is a “price arbitrage strategy”? “FXCM determines, at its sole discretion, what encompasses a price arbitrage strategy,” the website says. Oh. 

Social trading

FXCM doesn’t offer social trading itself, but you can access it through Zulutrade for $30 a month. Trades are executed on FXCM and 25% of the profits over a certain benchmark go to the trader you’re copying (assuming that there are indeed profits). There’s no fee for the first three months while you try it out, and even after that, FXCM will waive the fee for “eligible clients,” although it doesn’t say who’s eligible. 

Education and information

This is where FXCM falls down, IMHO. They really should hire me at an exorbitant six-digit (seven?) salary to improve their research offering. A top-level platform for professional traders deserves top-level research. 

There’s a good educational section for beginning traders, including a book you can download and video courses to get you started. Their YouTube channel has an large number of “how to” videos (from how to use the Trading Station platform to “Algo Trading with REST API and Python”) but only a few (six that I could see) on how to trade. They also have an enormous number of articles about trading aimed at beginner, intermediate, and advanced traders. 

For those interested in fundamental analysis, they offer a variety of economic statistics plus the Quandl database, which I had never heard of. It’s a “platform for data that delivers a suite of unique, non-market data products atop a strong base of core financial and economic data.”

However, the research and analysis seems to be largely bought in from third-party sources, notably Trading Central, FXStreet, and Investing.com. The only thing I could find produced in-house was a 22-minute daily video by their market strategist. I only watched one of these but I wasn’t particularly impressed (but then again I naturally tend to be catty and dismissive about anyone else’s work except my own). 

Disclaimer: My disappointment here may be due in part to my location. Some of their research and services aren’t available to EU residents, such as their trading signals or live online classroom. On the other hand, some isn’t available to clients until their balance exceeds a certain size (i.e., the more you deposit, the more research you get access to). This begs the question: how are you going to make more money and grow your account with only limited education?

Customer Support

Customer support is not FXCM’s strongest point. It’s available 24/5 by phone, email, or through the form on the website, which is pretty much the market norm.

The chat line is only available in some jurisdictions. Reports on how long it takes to get a response vary: some clients said the response time was fast, especially for phone or live chat, while email response varied from one day to as many as three or four days. Support is available in 19 languages and phone calls are free for residents of 42 countries. 

Is FXCM a good broker for beginners?

FXCM is a good broker for experienced traders with a range of trading tools, strong regulation, and support for algorithmic trading. However, it may not be ideal for beginners due to limited education and lack of passive investment options. Pricing is average, but high-volume traders can benefit from special offers. Withdrawal and inactivity fees are higher than competitors, and fixed leverage is not as flexible.