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US broker FXCM announces the launch of their forex execution center. The new mini-site doesn’t show statistics regarding execution, but is just intended to showcase the difference between execution methods – between no dealing desk (NDD) or ECN, and the more common market makers. I hope they will add execution figures.

This  imitative  is similar to Gain’s fresh  transparency  move regarding execution. I wonder if more brokers will join.

Here’s the full press release:

New York, February 1, 2011″”FXCM Inc., (NYSE: FXCM) launches the  FXCM Forex Execution Center. With numerous requests for transparency in the  forex  market, the  FXCM  Execution Center will be a central hub on the  FXCM  websites that will provide  forex  traders with detailed information regarding  forex  execution practices.    FXCM  will continue to update this area over the coming months with insightful information and analysis.

The first step is to explain the different  forex  execution models.    Unlike most other  forex  brokers, who act as market-makers,  FXCM  operates on an agency execution model.

FXCM  takes the best bid and ask prices streamed to them from multiple large financial institutions, adds a markup (commission) on top of those prices, and shows them to clients.  FXCM  makes an identical amount of money in the form of pip markups (which are really commissions) regardless of whether the customer makes or loses money on a trade.    As a result,  FXCM  earns consistent and transparent revenue per trade.

This is significantly different from brokers who operate a dealing desk execution model, where the revenue per trade is not as transparent.    There are common practices, many times unknown to customers,    which allow dealing desk firms to make more than just the mark-up attached to the prices streamed from large financial institutions.    These practices include, but are not limited to, re-quoting customer trades, taking the opposing side of    customers trades, and even preventing customers from trading or managing their positions during    news events.

Many experienced  forex  traders may find the concept difficult to grasp. And it is especially hard for those new to the  forex  industry.

No  Dealing  Desk (FXCM): Learn How  FXCM  Executes Your  Forex  Trades

Watch Now: https://www.fxcm.com/fxcm-forex-execution.jsp

Dealing  Desks (most  of  the  other  guys) learn about the potential conflict of interest between dealing desks and traders

Watch Now:  https://www.fxcm.com/fxcm-forex-execution.jsp

To learn more about  FXCM’s  forex  trading execution model, visit the  FXCM  Execution Center here:  Forex Execution Center

About Us

FXCM Inc. (NYSE: FXCM) is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers world-wide.

At the heart of  FXCM’s  client offering is No Dealing Desk  forex  trading. Clients benefit from  FXCM’s  large network of  forex  liquidity providers, enabling  FXCM  to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution, and trading from real-time charts.  FXCM’s  UK subsidiary,  Forex  Capital Markets Limited, also offers  CFD  products with no re-quote trading and allows clients to trade oil, gold, silver, and stock indices along with  forex  on one platform. In addition,  FXCM  offers educational courses on  forex  trading and provides free news and market research through  DailyFX.com.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. Any opinions, analyses, or other information contained is provided as general market commentary and does not constitute investment advice. Read full  risk disclaimer.

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