Here Are the 9 Pros and Cons

FXCM Fact sheet

We’ll start this in-depth review of FXCM by discussing the safety and security of the broker. The most important feature of any broker is its trustworthiness. The number of quality financial regulators can indicate the level of reliability of your financial services provider. FXCM is authorized and regulated by:

• The Financial Conduct Authority (FCA) of the United Kingdom (is considered top tier and high trust)
• The Australian Securities and Investments Commission (ASIC) (is considered to be a high-trust regulator)
• The Cyprus Securities and Exchange Commission (CySEC) (is an average trust regulator)
• The FSCA of South Africa (average trust regulator)

The high trust regulators have strict requirements for acquiring their licenses. The regulations are in place to protect traders’ interests.

Keep in mind that FXCM is a group of companies operating globally. In case you are opening an account from Australia, your account will be subject to ASIC regulations. If you’re opening your trading account from the UK, the FXCM account will be under the supervision of the FCA of the United Kingdom. As a result, the leverage offered, account base currency, and available asset types may differ from country to country. But in general, it’s safe to say that FXCM is a trustworthy broker.

Policies that FXCM follows

FXCM provides negative balance protection for retail traders. Trading is a leveraged activity, which means that investors can bet on prices going up or down using borrowed funds. In the event of sharp price movements and high leverage, it’s possible to lose more money than is in your account. To counter this, FXCM will automatically close out your positions whenever it comes close to becoming negative. In the unlikely event of your account going into the negative, you can contact the team of customer support agents and they’ll change the account balance to 0. However, negative balance protection is not available for institutional traders.

In addition, FXCM keeps the funds of their clients in a segregated account in accordance with UK’s Financial Conduct Authority requirements. 

There are 200+ instruments to choose from for trading with FXCM. However, the number is not impressive compared to the competition. You can trade Forex pairs using up to 400:1 leverage, however, the number might drop to 30:1, depending on your country of residence. The maximum leverage for the rest of CFDs is 200:1. CFD stands for Contract For Difference and enables you to go long or short and benefit from price moving in any direction. What’s more, CFDs are highly liquid and provide better spreads than physical assets. CFDs are great instruments for short-term trading, but for long-term investing, physical assets are preferred. 

Forex

FXCM offers up to 42 currency pairs. Including Major and Minor ones. As already mentioned, the maximum leverage available is 400:1. However, it should be noted that by choosing high leverage, you increase the chances of blowing up your account. Leverage is a double-edged sword and it can benefit you massively if the price goes in the predicted direction, or make you lose large positions if the trade turns against you. 

In case you’re planning to solely trade Forex pairs MetaTrader 4 will be the perfect pick for you. As the platform is simple, yet very powerful and is designed around Forex trading. 

Shares

With FXCM you can trade top shares as CFDs from the US, UK, Europe, and Hong Kong Stock Exchanges. As already mentioned, CFDs offer a lot of benefits over trading physical stocks short term. In addition, you can trade stock CFDs with leverage. Only a 5% margin is required to start trading shares. For retail traders, the maximum leverage available for trading stocks is 20:1. 

Share CFDs are accessible via Trading Station, MT4, or API. The broker also gives you the ability to trade fractional shares. For instance, you can buy or sell 0.1 shares of a certain company. However, HK shares can only be traded in increments of 1 share.

Cryptocurrencies

FXCM provides access to trading 17 cryptocurrencies as CFDs. The list includes popular currencies such as Bitcoin, Litecoin, Ethereum, Dogecoin, and more. The leverage offered goes up to 4:1. Spreads are starting from as low as 1.13 pips on Cardano vs USD, and the average spread on Bitcoin vs USD is 40 pips. 

Trading cryptos as CFDs has a lot of benefits. In addition to all of the already mentioned ones such as high liquidity, the ability to go short, and the use of leverage, there’s more. You can forget about managing crypto wallets and planning cashouts as you are not actually owning the coins when you trade them as CFDs. 

Indices

Indices are indexes that show the performance of certain industries or sectors. In addition to this function, indexes can be traded as CFDs. 

There are 15 indices available for trading with FXCM. The list includes the S&P 500 (US500), US30, Fra40, Ger30, JPN225 and more. The JPN225 index measures the collective performance of the top 225 Japanese companies that are publicly traded on the stock exchange. As such, they represent a good indicator of the Japanese economic performance as a whole. Even if you’re not planning to trade indexes, it’s wise to keep them on a watchlist as they can be used as trading instruments. For example, a bullish JPN225 can predict that the Japanese Yen will increase in value.

Commodities

With FXCM you can trade hard commodities such as gold vs USD, silver vs USD, and others. There are 11 in total. The broker doesn’t charge you a commission for trading. On the other hand, fees are represented as spread markups. 

Commodities are raw materials and their prices are generally influenced by global supply and demand. Precious metals like gold and silver increase in price in times of high inflation as the demand for gold increases to hedge against inflation. 

There’s not much to discuss here. FXCM only offers one type of live account, a demo account, and a swap-free version. 

Demo account of FXCM

The Demo account offered by FXCM is free of charge. It enables you to get used to trading platforms, test out various strategies, and experience broker’s policies without risking real money. In addition, you can check the list of trading instruments and spreads when using the Demo account. It’s recommended to open a demo account first before you start trading live. 

Individual account of FXCM

The Individual account offers access to trading various assets. The list includes Forex, CFDs on stocks, indices, commodities, cryptocurrencies, CryptoMajor basket, Forex baskets, and stock baskets. 

Leverage and spreads for each type of asset are different. Forex pairs can be traded with up to 400:1 leverage. Whereas, CFDs have a 200:1 maximum leverage. The maximum leverage for cryptocurrencies is 4:1. Leverage simply means that you get higher purchasing power each time you trade with leverage. For instance, 100:1 leverage enables you to manage a 100 times bigger trading size using borrowed funds. 

There’s no commission charged and trading fees are represented as spread markups. The average spread on EUR/USD is 1.3 pips. 

Islamic account of FXCM

Charging interests is prohibited according to Sharia law. In order to enable traders of the Muslim faith to place orders without going against their religious beliefs, FXCM offers interest-free accounts.

Instead of charging swaps for keeping positions open overnight, FXCM increases spread markups and adds commission fees. 

You can change your regular trading account into a swap-free version by filling in a simple application form. 

Getting started on FXCM - Main steps

In case you’re considering opening an account with FXCM, we’ll guide you through the process in simple steps. The entire process is fully digital and the web page is user-friendly.

Step 1: Choose & create your account

The first step is to register on the broker’s web page. Go ahead and open FXCM’s main page. You’ll be able to see the Open Account button in blue at the top right corner. Fill in your personal data such as country of residence and email address, then press continue. 

As you progress with the registration process, you’ll be able to choose your preferred trading software, account base currency, and password. 

Step 2: Verify your account

The next step is to verify your account by providing documents that verify your identity. You can upload a scanned copy of your government-issued passport, ID, or driving license. Or you can use your phone to take a digital picture of the documents. Just make sure that the photos are of high quality with no light reflections and shadows. The second type of document that is required to verify your account is proof of residence. You can use utility bills and similar types of documents here.

Step 3: Deposit funds and start trading

Once your account gets approved you’ll be able to deposit or withdraw funds. The funding options vary from country to country and you can choose between credit/debit card, bank wire transfer, Skrill, Neteller, Vietnamese online bank transfer, and local bank transfer (from the Philippines, Malaysia, and Indonesia). Keep in mind that FXCM doesn’t charge you for deposits or withdrawals, although some intermediary banks might charge you service fees. Online wallets like Skrill and Neteller, as well as using credit cards are free of charge. After the funds get transferred to your account, you can start trading with your live account.

Fees are average at FXCM. There are no deposit and withdrawal fees. There are 1.3 pips average spreads on EUR/USD, and commissions are not charged for trading. 

Inactivity fee

The broker charges its clients an inactivity fee of 50 account base currency units per year after 12 months of inactivity. This means, if your account is in USD, you’ll be charged 50 USD and if your account is in British pounds, 50 GBP will be deducted from an inactive account every year. The amount in yen is 5,000 for JPY-denominated accounts

Comparing FXCM fees with other brokers

As already mentioned, FXGM fees are average compared to its competitors. In order to better understand the difference, let’s compare them to other brokers.

FXCM fees compared to Interactive Brokers fees

*Inactivity fee was eliminated by IB in 2021, it used to be $20/m

FXCM fees compared to eToro fees

FXCM fees compared to IG fees

FXCM offers the most popular Forex trading platform, namely MetaTrader 4. The platform is simple to use, yet very powerful, which is the reason it has remained relevant in the modern world. MT4 was released in 2005 and not much has changed in its design since. Many novice traders enjoy MT4 for its simplicity, while others find the design attractive. 

In addition to MT4, you can trade using Trading Station and ZuluTrade. Trading Station offers a more modern look and multi-asset platform, while ZuluTrade is best for copy trading. 

You can download mobile versions of MetaTrader 4, Trading Station, and ZuluTrade on your android and Apple devices. 

Mobile trading can be very useful in emergency situations such as power outages, breakdown of your PC, and losing an internet connection. In addition, mobile apps can keep you within arms reach of financial markets and you can monitor your trades from anywhere in the world where there’s an internet connection. 

Quality education is a standing pillar for each successful trader. FXCM provides tools for beginner and professional traders for market analysis. As a trader, you get access to an economic calendar, earnings calendar, market news, live Forex charts, and market data signals. Additionally, there are easy-to-understand guides for novice traders available on the broker’s web page. 

Great customer support is essential for increasing the company's client base. FXCM offers professionally trained customer service agents that are available 24 hours a day, 5 days a week. You can contact the broker through various means. You can send them an email, call, or chat using their web page or WhatsApp. 

The chat option is available for both existing and potential customers. However, the chat window is not easy to locate and you need to look closely to find it. When you register as a trader, the chat window appears at the top right corner of your client area. 

To sum everything up, FXCM is an average broker that offers average fees. The number of assets offered is not that impressive compared to the industry leaders and the live account types available are limited to 1. 

On the upside, the broker offers various trading platforms, good customer support, and various trading tools. In addition, FXCM is tightly regulated by top-tier financial institutions.