FXCM is one of the best-known brokers in the trading world with CFDs on all types of products such as forex currencies, stocks, and commodities. Even though it has favorable conditions as we will see throughout this review, there are people who believe that other brokers offer even better conditions. For example, Plus500 does not charge commissions –click here to learn more, however, this review is about FXCM, so let´s continue analyzing this broker but may visit Plus500 by clicking below if you decide to so (remember that CFDs are a leverage products and can result in the loss of your entire capital. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money).
In this review, we will analyze the key factors to determine whether a broker is reliable and if their conditions are optimal for investing. In addition, we will also compare it with one of the leading brokers in the world of CFDs, Plus500. In doing so, we will know which of the two is better in each aspect. To do so, we will begin by discussing what we consider to be the minimum requirements that every brokerage company must meet; i.e., reliability, competitive rates, reviews from investors, and other aspects to be discussed in this article. Let´s begin the review!
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Regulation: Is FXCM secure? Is it a scam?
The first aspect we always enjoy analyzing is the security of the broker. If unreliable, studying its commissions, platform or offered services becomes pointless. Also, if we are not confident that our funds will be safe, what is the point of even thinking about the associated investment fees? If a broker does not comply with our minimum requirements, we should immediately rule out analyzing it. So as you can imagine, FXCM does meet our requirements, as do all brokers we have analyzed thus far.
Our main requirement from brokers is to be regulated by an organization from the European Union. If unable to do so, we accept regulated brokers in the United States. As we have already mentioned, FXCM does meet this requirements, otherwise we would not be talking about it. FXCM is regulated by the Financial Services Authority (FSA), which is a highly prestigious supervisory body, in charge of the United Kingdom. In addition, it is also registered in different countries. For example, FXCM Securities Limited is registered with the FCA in the UK).
Another very important factor is that FXCM (Forex Capital Markets) was listed on the Stock Exchange in 2018. However, in 2015 they went through financial problems and Leucadia ended up rescuing it. Even though the financial strength of the company looks strong, the aforementioned problems experienced a few years ago scare some investors who prefer to look for alternatives. In our opinion, and disregarding its future, we believe that FXCM´s security is high, but that´s something that you should determine.
We mentioned that we would be comparing FXCM with Plus500, so let´s begin. The second broker also complies with the regulation. In addition, Plus500 is still listed on the stock market as of today, which according to us is a positive aspect. This is because in order for companies to be listed on the stack market, they have to pass major controls, their accounts must be audited and that is why we believe that their security is greater.
If there is something that investors may be interested in are fees. A very good trader with great results can greatly worsen their profitability and returns only by operating costs, if very high. That’s why given that we like affordable trading, we try to select brokers that don´t charge anything for performing operations.
Obviously, trading will never be totally free, so in one way or another, you will always incur in some cost. In fact, if you bump into a broker offering free trading, leave immediately as they may not have any commissions or spreads, and your funds may not as well be very secure in their accounts. As for FXCM, and most of its competitors, the cost to investors are spreads. A spread is the difference that investors have to pay to buy or sell a product at the moment. For example, if you’re trading with Forex and you want to trade with a pair of currencies like the Euro / Dollar, you will find out that the price at which you can buy is somewhat higher than the price you would get if you sold at the moment. This differential is measured through pips. That is why we must look into brokers with the lowest spreads.
FXCM offers very competitive spreads. As you can see in the image above, spreads are pretty tight in Forex, so we find them attractive. However, the commissions will depend on each type of account because FXCM offers different alternatives. Therefore, the exact conditions will depend on the option you select (basic or premium account).
At this point, it is difficult to compare them as there will be currency pairs where Plus500 is cheaper, and in others FXCM. The same thing occurs with other assets such as stocks and stock indexes or raw materials. Either way, both offer interesting spreads. If you want to learn information regarding the commissions offered by Plus500 simply visit this link.
Platforms and training
The trading platform is a key tool to invest successfully. And not because the platform will offer you the keys to operate and earn money. No, no one will offer that to you. It´s important because it will be the means that will allow us to trade on a daily basis. That is why we must learn and analyze it before hiring the services of a broker.
FXCM offers two different platforms: one created and developed by them called Trading Station and another one quite known in the market, MetaTrader 4. Given that MetaTrader is famous all over the world, we believe it is not important to explain how it works. So, we will focus on Trading Station.
Trading Station allows to invest from your mobile phones, as well as PCs, tablets and Macs. You can connect and operate from anywhere using their web function. It will allow you to connect from anywhere without having to download any application to your cell phone.
If there is something that makes Trading Station stand out is its high number of available indicators, just over 600. Honestly speaking, in this regard is superior to its competitors. That said, if you are a new investor, or even a mid-level investor, it is likely that you will not be able to pay more for having so many signals and tools, since most people use only basic, candlestick chart, and similar graphics. Either way, there is no doubt that this is something one should consider.
In addition to the platform, the free training offered by FXCM is of quality and greatly appreciated. For example, they have several videos to learn about Forex investment, different technical analysis with various investment ideas, updated news about economics and finance, etc. We must also point out that the customer service is in English.
We are approaching the end of the review, and before concluding, we want to analyze the reviews from investors who have had both positive and negative experiences with FXCM. Analyzing reviews is something we always strive to do, for example, we have studied reviews from FXGM, Markets.com, Plus500, etc. To do so, we scanned different English forums dedicated to the world of investment, to determine which are the most repeated comments. If we find an opinion in the forum which does not repeat itself, it quite clear it is not shared by other traders. That´s why when an investor shares a message on social networks such as Facebook or Twitter explaining their feelings, he is doing us a favor and helping the rest of the market. Similarly, if we discover that after sharing a problem in public, brokers decide to immediately fix it, we consider it as something positive. But let’s focus on the comments from FXCM users.
If we begin with the positive opinions, we must say that many comments value the spreads we have just analyzed. Being regulated is another important positive aspect we have seen. We also discovered great comments regarding the different contests that FXCM offers periodically. For example, in 2019, several competitions have been held along with their corresponding prizes. Finally, as mentioned earlier in this review, the platform (Trading Station Web) is also very useful and easy to use according to investors. This translates into many tools for investors and investment signals.
However, nobody can get away from negative comments and FXCM is not an exception. As you can imagine, a common unfavorable comment is the fear of not being a reliable company after the problems they experienced. There are also those who consider that having several types of account is detrimental to investors with less money, since large investors benefit from lower fees.
I am sure by now you already have some idea of the conditions of FXCM and you have made your own opinion. The decision to invest and to contract or open a real account with a broker is yours alone, so you should study the offers and conditions offered by the different brokers. Either way, we believe that before ending this review it will be a great idea to briefly summarize the most important issues, by dividing them into two parts: on the one hand, the factors that add value and the other the ones that may take away from it.
- Own platform and MetaTrader
- Videos, courses, and market strategies are available
- Several accounts to choose from
- Regulated and meets safety requirements
- Offers many tools to operate
- No interesting promotions for new customers
- Since there are different accounts, investors with more money have privileges compared to smaller investors
- They faced financial problems in 2015
So what´s our conclusion? We will try to be brief as possible. We believe FXCM is a good Forex broker, and that they offer quality services. In addition, it is entirely available in English and easy to use. Although its platform offers more tools than many of its competitors, it may not be worth it for basic accounts. Therefore, we believe that a trader who is interested in trading through CFDs, may be interesting in learning more about Plus500 which allows to operate without having to pay any commissions (remember that CFDs are a leverage products and can result in the loss of your entire capital. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money).