Headquarters: New York

Offices: New York, San Francisco, Dallas, London, Hong Kong

URL: http://www.fxcm.com

Profile

FXCM began offering FX trading services shortly before the Commodity Modernization Act of 2000, which opened up the forex market to individuals in the United States. Since then, it has expanded and holds arguably the largest market share in retail foreign exchange. Its US presence is substantial, as it holds "nearly 1 out of every 3 dollars of customer funds" held by US-regulated forex firms.

It also has a large presence in Canada, the United Kingdom, Asia and the Middle East, and its client deposits total over $600 million. It took an early lead in the forex market by leveraging online access to trading and obtaining new clients via internet search engines rather than traditional broking methods such as cold calling and referrals.

Dealing

As recently as 2004, most of the large forex brokers operated using a dealing desk model. The spot forex market has recently shifted toward non-deal desk (NDD, or no dealing desk) platforms, however.

FXCM, while one of the later dealers to make the switch, should be able to leverage its size and relationships with banks to offer superior execution and lower cost to clients. Because it provides many additional services (research, trading signals, API, system trading, managed funds, an introducing broker program, international offices, expos, true 24/7 support), it may never be the ultimate low-cost forex provider.

However, in the same way that Charles Schwab is a leader in stock brokerage despite not having the lowest commission fees, FXCM seems to want to corner the middle of the market. It may not capture all of the bottom-feeders, $100 micro mini accounts, or ultra high-net worth clients, but it is a solid firm for clients seeking excellent service and access to quality pricing.

Service

FXCM is perhaps best known for the quality of its service and client support. Even in online broker reviews and forums that dislike the firms dealing practices or steer clear of it for other reasons, many former clients mention that the quality of support they receive from FXCM is above par.

Negative Reviews

There are many online forums that discuss the quality of online FX brokers, their execution, their platform, and their overall service. In researching for this site, we have come across several with pointedly negative reviews of FXCM (and of many other large brokers). Little time is spent discussing most small brokers, as they have the smallest client bases. Much time is spent--especially by US clients--badmouthing FXCM. Because FXCM is so large in terms of client deposits, it is possible that there are more negative reviews simply because FXCM is the biggest target out there. It is also possible that clients have truly had bad experiences with the firm, and prefer dealing elsewhere.

The most discerning clients should evaluate each broker (see 10 Broker Questions) as best as possible BEFORE trading with them. If possible, clients can narrow their selections to two or three brokers, test live execution and service on a trial basis with each, and make a final decision after.