- How and why has the company changed since it was founded?
We’ve come a long way since our inception in 1999. Back then, the widespread adoption of the internet started a new revolution in online trading and traditional barriers to entry for traders disappeared and costs fell substantially.
During the 2000s, we focused heavily on developing cutting-edge technology and providing advanced educational tools and market insights to help our clients make informed trading decisions. These were key points of differentiation for our business. As part of this we launched DailyFX, which grew to be a popular information source across the FX market.
We stepped up our global presence in 2010 with the purchase of ODL – which I led. This eventually led to FXCM entering a period of sustained growth and we became and still are one of the best-known retail brokers globally.
Over the last decade, we have diversified our business and the client we serve. Our institutional business, for example, serves small and emerging market banks, hedge funds, family offices and proprietary trading firms around the world. We also co-founded FastMatch, which was sold to a major exchange for a multimillion-dollar sum.
The period after SNB decision was a setback for our business and the wider industry but I am proud of how we bounced back. Today we are a multi-asset broker serving over one hundred thousand clients in the retail and institutional space. Our product suite includes FX, metals, oil, indices and more. We expanded into cryptos and are investing heavily in technology and data.
Our business is twenty years old, but we are entering a next phase of our growth. Three years from now, I expect we will be a very different business to what we are today.
- Looking at the inclusion of crypto and baskets, how does FXCM protect investors specifically?
We are focused on offering our customers some of the best possible trading opportunities across different asset classes, so expanding to cryptocurrencies (cryptos) was a natural step for us.
Trading cryptos using the incumbent model of exchanges comes with inherent risks. Traders have to buy the physical cryptocurrency and store it in an online wallet and they are not offered any regulatory protection if a wallet is hacked – the trader loses everything. Several high-profile cases of hacks have already occurred where millions have been lost with no restitution for those left out of pocket.
When retail clients trade crypto CFDs with FCA-regulated brokers like FXCM, their funds are held in segregated bank accounts. There are no hassles with wallets – FXCM deals with everything to do with the back-office so the trader can concentrate on just trading cryptos. We are also subject to a pricing and execution framework governed by strict regulation.
Our crypto basket, CryptoMajor, groups Bitcoin, Ripple, Litecoin, Bitcoin Cash and Ether into one tradeable product. The advantage of baskets is that you do not need to pick a specific crypto to trade – you just pick the direction. If you think cryptos are undervalued and poised for a rally, go long. If you think tough times are ahead, go short via a crypto basket.
Unlike other cryptocurrency baskets, CryptoMajor gives equal weighting to each coin in the basket. This means the trader is not overly exposed to just one cryptocurrency.
Investors should remember that cryptocurrencies have a higher volatility than other products and market liquidity will fluctuate, which could result in jumps in price and slippage.
We provide a wealth of information on cryptocurrencies trading and their inherent risks at www.fxcm.com/uk/cryptocurrency.
- How has the FX market changed over time? Are human traders soon to be a thing of the past? Where do algos fit into the FX trading strategy?
Automation has transformed the market over the past two decades. Trades are executed faster, the nature of participants active in the market is no longer restricted to big banks and there are vast amounts of information that need to be processed in order to make the best trading decision.
The rise of algorithmic trading is a natural consequence of this, and has largely been positive for the industry. A large proportion of our clients now trade via algos and automate their buy and sell orders, risk parameters and execution strategies. Different traders have different preferences, so it is vital that we provide a range of execution options to suit their requirements.
This is particularly true for customers that use sophisticated algorithms to trade. We’ve added new capabilities over the past year to make algorithmic trading more convenient and easy for integration into our platform. This includes the launch of the REST API and Python Wrapper.
Does this mean the role of humans is coming to an end? No, it is not a view I subscribe to. If algo’s are driving up trading volumes it’ll mean they’re also driving down spreads which is good for everyone, including manual traders.
- What is the role of data in FX trading? In equities data is considered the lifeblood of trading – is it the same in FX? What data do traders need most? And is speed a factor like in equities?
The very good news is that price data in FX is free! The futures and stock exchanges charge an arm and a leg for their real-time and historical data and if you want to trade the international markets, you have to pay for each one. You cannot build a trading algorithm without pricing data. Because we supply it for free, FX is a popular place for algo traders as they don’t have to rack up thousands in data costs just to start tinkering with a trading strategy.
We offer a wide variety of data packages, including free tick-data that aggregates the best bid and offer for the most popular currency pairs from FXCM’s liquidity providers, and historical data, which allows clients to back-test algorithmic strategies and create models with precision.
We also offer Premium Data feeds for a small subscription cost. Our Speculative Sentiment Index provides the ratio of longs to shorts in our client base. We also offer premium streams for volume and trade tape data, which are available in a live stream via an API.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
75.38%of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
To learn more about FXCM, visit www.fxcm.com/uk
FXCM is a leading provider of online foreign exchange (FX) trading, CFD trading, and related services. Founded in 1999, the company’s mission is to provide global traders with access to the world’s largest and most liquid market by offering innovative trading tools, hiring excellent trading educators, meeting strict financial standards and striving for the best online trading experience in the market. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. In addition, FXCM offers educational courses on FX trading and provides trading tools, proprietary data and premium resources. FXCM Pro provides retail brokers, small hedge funds and emerging market banks access to wholesale execution and liquidity, while providing high and medium frequency funds access to prime brokerage services via FXCM Prime. FXCM is a Leucadia Company.
Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. The products are intended for retail, professional and eligible counterparty clients. Retail clients who maintain account(s) with Forex Capital Markets Limited (“FXCM LTD”) could sustain a total loss of deposited funds but are not subject to subsequent payment obligations beyond the deposited funds but professional clients and eligible counterparty clients could sustain losses in excess of deposits. Clients who maintain account(s) with FXCM Australia Pty. Limited (“FXCM AU”), FXCM South Africa (PTY) Ltd (“FXCM ZA”) or FXCM Markets Limited (“FXCM Markets”) could sustain losses in excess of deposits. Prior to trading any products offered by FXCM LTD, inclusive of all EU branches, FXCM AU, FXCM ZA, any affiliates of aforementioned firms, or other firms within the FXCM group of companies [collectively the “FXCM Group”], carefully consider your financial situation and experience level. If you decide to trade products offered by FXCM AU (AFSL 309763), you must read and understand the Financial Services Guide, Product Disclosure Statement, and Terms of Business. Our FX and CFD prices are set by us, are not made on an Exchange and are not governed under the Financial Advisory and Intermediary Services Act. The FXCM Group may provide general commentary, which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. The FXCM Group assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on the FXCM Group’s websites prior to taking further action.