FX Club Broker Review

Today I’d like to go over a Forex Broker known as FX Club. I have tried out Forex Club on many occassions and feel I can shine some light on whether or not this may be the right broker for you.  First off FX Club offers a few things that make it stand out from the rest most of all being ZERO SPREADS and instant commission refunds on all losing trades.  I was enticed greatly by this offer and felt the need to instantly try FX Club because having no spreads when trading Forex is such a great tool, it can not be overlooked.   However, I came to find that power of trading Forex with “no spreads” came at a high price, the high price of commission charged by FX Club.

ZERO SPREAD BROKER
Forex Club has the distinguished honor for being one of the only Forex Brokers that does not earn a revenue by charging its users a fee between the bid and ask prices, otherwise known as a spread. Now, if you have experience with other brokers that do charge a spread, you quickly realize how beneficial this might be, especially if you enter many trades in any given period, lets say 20 trades with a 3 pip spread, thats 60 pips you are “paying” your broker before you break even. With Forex Club’s No Spread guarantee, you pay absolutely nothing! This can be one of the best things for a beginner trader to have at his disposal when entering a trade.

COMMISSION BASED TRADING
Forex Club does indeed try to make a profit however, through their comission fees. I believe their flat rate of $.40 per 1000 traded turns Forex Club into the best broker on the web, into a barely average broker that. Let me explain. $.40/1000 traded really translates into a $40 per full lot fee.  As I entered trade after trade I would see $40 missing from the profit each time. Compare this to Forex.com taking out zero for commission and 3 pips (eurusd) spread, Forex.com is clearly a more profitable way to go.  FX Club does however offer you that same $40 back if the trade does not go your way.  But at this point you are losing X amount on the losing trade itself, so you are still a loser, they are just giving you your own money back that went to them as I will explain in the next section.

COMMISSION REFUNDS
FX Club offers a commission refund on trades of yours that do not work out.  Taking this offer in context we have to measure whether or not getting back all that money from these commissions outweighs the amount of profit you make with trading with no spreads while compared to other brokers that charge you a spread.  The real time calculations  I made confirm this is not the case, that on average I have 60% winning trades, thats 6 winners for every 4 losers.  While I am getting back $160 commission, I am paying $240 for the winning 6 trades.  If I were using Forex.com for example, I would have just had to pay $300 (10 trades times 3 pips spread times $10/pip) without any refunds.  But if I had 9/10 winning trades, I would be paying FX Club $360 in commission while still only paying $300 spread on Forex.com.    I would have paid only $100-$150 at MB Trading for the same 10 trades while at FX Club I am paying $240-$360 still.   Multiply this by hundreds or even thousands of trades in your Forex career and you can see how much FX Club is making off of your trading compared to other Forex Brokers.  If you have more losers than winners, then you will be getting lots back on refunds, but at some point you have to realize you are losing MANY pips with losing trades just to get a “refund” on commission.  This almost forces you to have a low win rate with a disproportionately high average pips per trade gained with the few winning trades you do enter at FX Club.

In this first example, I entered a trade and you can clearly see under the Commission Payback column a losing 250,000 trade gives you back $100 which is 2.5 lots under the FX Club platform.  The $100 reflects 2.5 lots times $4/10,000 or $0.40/1000 as they advertise.   So, if this trade had worked out, $100 would be paid to FX Club and not refunded.  

In this second example, I enter a trade at 1 full lot which you must set yourself during the DEAL execution screen at 100,000 trade size.  On a losing trade you receive $40 back, but on a winning trade you pay that $40 to FX Club.  Compare this to other brokers like Interactive Brokers and you are paying almost $25 more on EURUSD per trade which adds up.  Interestingly enough, the USDCHF trade I am in was for 100,000 which equaled roughly $8.40 per pip.  If the commission costs me $40 per 100,000, I needed to gain 4 pips before breaking even, which is exactly the spread with NO commission charge at Forex.com.  Depsite no spread with FX Club when you factor in commission fees you are paying the same as other average retail brokers and in some cases you are paying MUCH more than the best Forex Brokers that charge variable pip spreads as low as 0.6 pips.

Final Word on FX CLUB

While Forex Club claims to have a great way for you to make more pips when you trade, in reality the spreads make no difference if you are paying $40 per round lot traded no matter how many refunds on losing trades you might receive. FX club seems quite gimmicky and it turns out, even if they are a legitimate broker, falling for the zero spread “gimmick” need not be the destiny for you traders out there. If you peruse through Forex Broker Comparisons you fill find many brokers that charge much less on commission while offering quite low spreads, not zero spreads, but most of the time 1 pip or less on EURUSD.  Fx Club also claims to be an ECN Broker, but the many things I have seen allude to the fact they probably are a market maker and you are trading in an artificial market environment.

Me Waiting Long Time For Entry...

We need to ask ourselves, if we are paying as much after commission on FX Club as Forex.com or other more reputable brokers, then what does FX Club have over Forex.com and the others? NOTHING is the answer.  The execution is just way too slow for my liking and the platform is not conducive for quick entries and exits. Moreover, the charts provided by the FX Club platform are just entirely way too simple and the smallest time frame is the HOURLY, nothing more precise.  

I can not say FX Club is a scam.  This is a real company that has a real team of people working for you.  This site does not favor any broker over another for monetary reasons even though FX Club has a vast marketing machine in effect paying thousands of webmasters to talk about them favorably.  Inevitably the choice is yours whether or not to invest real money in FX CLUB, happy trading!

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Tags: broker, club, commission, forex, fxclub, NO_spread, spreads

FXDD Forex Broker Review

Coming Soon

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Tags: broker, forex, fxdd, low_spread

Forex.com probably has the ultimate domain for a Forex broker.  But does their service live up to the titanic domain?  Is Forex.com a Scam that preys on new traders? Please post your experiences with Forex.com so we can get to the bottom of this together.  First a little about Forex.com.

FOREX.com is a division of the GAIN Capital Group, headquartered in New Jersey and New York. Private forex traders can take advantage of the market expertise and financial strength of GAIN Capital Group and access an institutional FX trading platform, GAIN Capital representitives are one of the only Forex analysts from a forex broker I see give interviews on national television here in the USA. Forex.com does operate a trading desk which is a stark contrast to an ECN broker and the advantages they bring.  Forex.com is commission free and offers competitive spreads on their Standard accounts.

$50k Practice Trading Account

Forex.com starts you out with a free no obligation practice account.  To beginner traders, Forex.com presents a few easy steps before you should start trading with real money in Forex.

Understanding the FOREX market.
Forex.com provides weekly live webinars where traders of all levels can come and share their thoughts on trades and techniques.

Step 2: Prepare to trade in a live environment.
Forex.com holds training seminars both on line and in the real world, where real forex professionals can teach you the ins and outs of trading Forex for real.

Step 3: Test your Forex strategies risk free.
With a 30-day practice account offered free of charge, you can get acclimated to trading with Forex.com’s platform.

Forex Education.
Forex.com offers free forex educational material. This is key to a new trader’s success in Forex trading.

Live Forex Webinars
Join us for free interactive webinar. Our webinar series provide instruction, demonstration and discussion.

Forex Workshops
Local workshops are offered in many locations tailored for all levels of forex traders.

Training courses
Learn at your own pace. Sign up for one of our comprehensive online training courses.

Phone Consultations
Offers one free phone consultation (subsequent consultations offered at a fair price) on developing an appropriate trading strategy for you.

The Forex.com Trading Platform
Been familiar with Forex.com’s FOREXTRADER platform for a few years.  My favorite aspect of this platform is the “point and shoot” feature which allows you to close a trade within an instant.  Good for precise entries and exits, this feature has gotten me out of some pretty close trades and undoubtedly saved me pips. Forex.com’s FOREXTrader platform, offers real-time forex charts, up to date professional forex market research and news that might move currencies, and a host of technical forex trading tools. For beginner traders, FOREX.com offers forex training programs, forex minis, and information about trading the foreign currency market.  When I first joined, I received a complimentary “lesson” on Forex trading via phone.  The platform has built in Forex News thats streamed live to yoe.  You are able to create your own workspaces which includes multiple monitor setups for those of us who have more than one monitor. The Forex.com spreads are not the lowest in the industry however.  If you are trading a mini account, you are suffering from a 3 pip EUR/USD spread, a 9 pip GBP/JPY spread, a 4pip EUR/JPY spread, etc.  This does not mean you can not be profitable with Forex.com however.  Once you have a standard account, the spreads and leverage are lowered.

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Tags: broker, forex, forex.com, market_maker, spreads

Tags: broker, commission_free, dealing_desk, easy-forex, spreads, web_trader

Iforex is a broker I have personal experience with. They offer a few different types of accounts including Standard, Professional, Mini, and Protected. The most interesting to me was the Protected account that “covers your losses” or so they said. First a little about Iforex and how they operate.

iFOREX operates a dealing desk for trading Forex, including spot and forward transactions which are the main financial trading apparatuses on the foreign currency markets.

iFOREX offers automated features and clear price transparency which allegedly allows you to trade without the concern of Price Manipulation. Only at iFOREX, the price you see is the price you get.

• Interbank Spreads 3-5 pips
• iForex Commission Free Trading
• 24/7 Account Access
• Over 60 Tradable Currency Pairs
• Secure Online Credit Card Payment more…
• Hedging Capability
• Maximum Leverage - Up to 400:1
• Guaranteed Stop Loss Level for Exposure Closing
• No Margin Calls
• (Negative balance protection) No Liability for a Debit Balance
• Immediate Future Profits Payments
• Instant Quotes Regardless of Market Volatility

IForex offers a few different account types, the most interesting being the “protected account” which claims to have your “losses covered.” IForex claims that The Protected Account works as a funded demo account, which allows you to:

• >Open a trading account with as little as $100.
• >Your deposit acts as a payment and allows you to trade up to 100 times that payment
• >Enjoy an attractive spread for a large selection of currency pairs
• > Make as many trades as you desire, 24 hours a day, using any currency pair.
• >At the end of the two-week period, any positive balance is yours to keep.
• > If there is a negative balance, iFOREX will have it covered.****

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Tags: account, broker, forex, iforex, market_maker, mini, professional, protected, trader

FXCM is one of the net’s largest Forex Brokers both in terms of number of clients and capital it posseses.  An average of $350 billion in volume every month is traded on FXCM’s trading platform, and FXCM is one of the most well-capitalized Forex Dealer Members. FXCM is in fact one of the longest running online Forex brokers. Consequently, FXCM has maintained strong relationships with many of the worlds largest international banks. FXCM receives and is able to offer these advantages to its clients:  better prices, and better execution, tighter spreads, and ease of use.  Forex is traded via an over-the-counter market with no centralized exchange, meaning not everyone enjoys the same prices or quality of execution as those using FXCM do. In reality, the world’s biggest banks usually provide better prices and execution to institutions with the largest trade volume and the most solid financial statements, namely brokers like FXCM.

FXCM Broker Features

• SPREADS AS LOW AS 1 PIP
• NO DEALING DESK
• RATES ARE PROVIDED TO FXCM BY MULTIPLE TOP TIER BANKS
• EARN POSITIVE ROLLS, REGARDLESS OF YOUR MARGIN LEVEL
• PLACE ORDERS INSIDE THE SPREAD
• NO DEBIT BALANCES
• HEDGING IS ALLOWED
• Traders receive competitive bid/ask prices provided to FXCM by multiple global banks.
• Trade news events with NO restrictions on order placement.
• Scalp the market with NO restrictions on order placement.
• Benefit from positive carry trades, regardless of your margin level.
• Margin Watcher feature that ensures you never pay debit balances…ever!
• Automated Trading Signals for Multiple
• Currency Pairs
• Live Entry/Exit Prices
• Fast and Reliable Stops & Limits
• Short-term & Medium-term time frames

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FXCM stays ahead of the curve when offering it’s clients information about trading.  When news breaks, FXCM passes it along to you, most of the time with professional analysis and interpretation. FXCM scans and alerts you if  certain technical formations appear up to 8 times a day!

FXCM Trading Platform

As of January 2008, there is over $700 million in customer capital trading on all FXCM platforms.  There are over 100,000 live accounts trading from almost 200 countries, with an average of 4,000,000 trades each month via its trading platforms.  FXCM’s customer support is available in over a dozen languages to maxmize their reach of service.

Registered with the CFTC as a Futures Commission Merchant, FXCM has received numerous awards in the past few years from the Forex and investment community such as Best Currency Broker from Shares, Best Retail Foreign Exchange Platform from FX Week and Best Foreign Exchange Specialist according to Technical Analysis of Stocks & Commodities.

Please share your experiences with FXCM in the comments below if you have any.  Your comments are welcomed and greatly appreciated.

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Tags: broker, dealing_desk, forex, fxcm, no_dealing_desk, platform

• Holds $4 billion in equity
• Handles 1,000,000+ trades daily.
• Has been operating in the trading market for 32 years.
• Customers are protected by $30 million of SIPC and Lloyd’s of London securities account protection.
• Real-time margin system enforces limits for each trader’s account, and automatically liquidates positions if any individual account violates its limits.
• All orders are automatically vetted on a pre-trade basis.
• Does not hold CDOs, Subprime Debt, or Credit Default Swaps.
• Positions and resulting payables/receivables are automatically reconciled against external sources daily.

The IB Risk Navigator^SM is launched, a real-time market risk management platform for customers, providing unified risk data across multiple asset classes around the globe.

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Tags: forex, IB, intreractive_brokers, margin

Hotspot FX: Professional ECN Forex Broker

Hotspot FX is an ECN Forex Broker that offers flexible FX market access to executable prices streamed live by leading banks and posted by their clients.

The HOTSPOT FX service is open to individual traders, forex and commodity brokers, forex dealers, money managers, introducing brokers and small to mid-size financial companies.

The Hotspot FX model provides the following advantages to its traders:

• Enables trading on interbank spreads.
• Creates transparency with a full depth-of-book view.
• Provides a level playing field for clients to trade on neutral prices.
• Enables clients to enter bids and offers.
• Ameliorates conflicts of interest inherent in dealer platforms.

Hotspot FX was founded in 2000 by a group of foreign exchange market professionals.

In 2001, the firm was registered to offer trading services to retail clients in the United States.

In 2002, the firm launched Hotspot FXi, the first institutional ECN with a prime broker-based credit structure.

The rapid adoption of Hotspot FXi by leading hedge funds, CTAs, traditional asset managers and banks quickly propelled it to the top rank of FX multibank platforms.

Hotspot FX has been a staple in the modern Foreign Currency market, in their own words: “At Hotspot FX we believe the ECN model benefits all foreign exchange market participants. Hotspot FX’s ECNs enable clients to trade on a level playing field with greater market transparency and enhanced control of their trade executions. These capabilities and other platform features were revolutionary when first introduced and they continue to set Hotspot FX platforms apart from others.”

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Tags: broker, ECN, forex, hotspot, platform