Forex trading offers flexibility, liquidity, low costs and trading 24 hours a day. If you consider all your options, you could determine that forex is the best way to invest your money. Given the high degree of volatility involved in trading currency pairs, a strong support system can offer additional stability.
Benzinga analyzes the features and services offered by both FOREX.com and FXCM, two household forex brokers.
FOREX.com vs. FXCM: Overview
Benzinga compares FOREX.com and FXCM’s spreads and fees, platform and tools, ease of use, support and research offerings, using a side-by-side ranking comparison.
FOREX.com vs. FXCM: Platform and Tools
What FOREX.com Offers
FOREX.com offers three powerful proprietary trading platforms for forex traders, completely focused on performance, flexibility, and speed.
The advanced desktop platform offers highly customizable dashboards and trade preferences, powerful charting tools, 80+ technical indicators, extensive drawing tools, and advanced analytic tools, including integrated trading strategies with hundreds of predefined templates.
The broker features advanced platform analysis tools through its desktop platform from Autochartist, Faraday, and Recognia. FOREX.com’s web platform has many integrated trading tools, advanced charting features, 70+ technical indicators, 50+ drawing tools and more. The platform also carries market commentary and analysis. It facilitates seamless account management, funding, and withdrawals.
The mobile platform is available for both iOS and Android phones. It offers full trading capabilities, carries integrated news, market commentary and analysis as well as real-time alerts and notifications. FOREX.com also provides clients with the MetaTrader 4 platform.
FOREX.com offers third-party trading and charting software, including NinjaTrader, Tradable (an application-based trading platform) and TradingView.
What FXCM Offers
FXCM offers multiple third-party trading platforms. Its flagship platform is Trading Station, which offers web, desktop, and mobile trading platforms.
The Trading Station Web 2.0 platform has an intuitive user interface and several new features. The Trading Station desktop platform gives you the ability to customize your platform and offers a robust suite of analytical and automated trading tools, preloaded strategies, advanced backtesting functionality, and detailed strategy, history and analysis tools.
The Trading Station mobile platform is available for both iOS and Android devices. You’ll get live streaming rates, can place and manage your orders, access charts and analyze news and reports.
Like FOREX.com, FXCM offers MetaTrader 4 and NinjaTrader and the copy trading platform ZuluTrade.
Apart from core platforms, FXCM also offers a suite of specialty third-party platforms that can be integrated with FXCM. These third-party platforms include QuantConnect, MotiveWave, AlgoTerminal, AgenaTrader, Sierra Chart, SeerTrading, NeuroShell Trader and StrategyQuant.
Bottom Line
FXCM’s is the better of the two because of its multiple third-party offerings. However, FOREX.com edges out FXCM in the platforms and tools categories.
FOREX.com vs. FXCM: Research Offerings
What FOREX.com Offers
FOREX.com provides a plethora of research content through all the trading platforms it offers, including real-time news, advanced charting, technical and fundamental research, economic analysis, a global economic calendar, and live trading webinars.
Live trading sessions are 30-minute webinars presented by the firm’s team of global analysts, which gives real-time insight, market commentary, actionable trade ideas as well as live Q&A sessions.
It also allows social trading, or copy trading, and provides backtesting in a bid to generate trade ideas.
What FXCM Offers
FXCM offers:
- Global market news on forex, commodities, and metals
- Free daily newsletter titled “Before the Bell,” which gives actionable trading setups before the market opens
- Market scanner, which performs a quick analysis and provides a trader with signals
- Free trading support portal called FXCM Plus, which gives access to exclusive tools such as TechnicalAnalyzer and Trading Signals
- Economic calendar
FXCM also offers educational resources such as webinars, seminars, live classroom, free trading accounts, free practice account, video tutorials and more.
Bottom Line
In terms of research offerings, both firms are equal, as there isn’t much that separates FOREX.com and FXCM.
FOREX.com vs. FXCM: Commission and Fees
FOREX.com's Fees
FOREX.com offers fixed spreads as well as variable spreads, which fluctuate throughout the day depending on liquidity and market volatility. FOREX.com fees also include:
- Commission on CFD trading and on forex trading when the relevant account is a commission account, a commission of $5 per standard lot of 100,000 and a low variable spread, chargeable at the execution of the trade.
- A minimum initial deposit of at least 50 of a client’s selected base currency is mandated, although at least a 2,500 deposit for increased trading flexibility and risk management is recommended.
- Inactivity fees are applicable for accounts with a balance of less than $10,000. If there is no trading activity or no open positions for more than 12 months, you’ll pay a $15 inactivity fee.
- If you hold your position overnight, you’re charged a financing/rollover charge, which is automatically applied to your account each day you hold an overnight position.
Example average spreads for some major currency pairs are as follows:
- EUR/JPY - 1.7
- EUR/GBP - 1.5
- EUR/USD -1.3
- USD/JPY - 1.4
- GBP/JPY - 3.3
FXCM's Fees
Example average spreads for some major currency pairs are as follows:
- EUR/JPY - 2.0
- EUR/GBP - 2.6
- EUR/USD -1.3
- USD/JPY - 1.4
- GBP/JPY - 3.1
Spreads are variable and are subject to delay. The spread figures are for informational purposes only.
For CFDs, FXCM charges an all-in spread that includes the firm’s costs. FXCM charges a rollover fee if you carry the CFD position overnight.
The minimum initial deposit to open an individual or joint account is 50 units of the base currency. The minimum for subsequent deposits by card is 50 (300 for clients who reside in UK and EU) units and there is no minimum for deposits by wire.
You’ll pay a $25 withdrawal fee when the beneficiary account is located in the U.S. or U.K. and $40 when the beneficiary account is located elsewhere. The firm does not charge for deposits through wire transfer, credit/debit cards, Skrill and Union Pay.
FXCM charges an interest rate of 1.75 percent above the overnight rate if the account balance is negative, and the fees are charged on a monthly basis.
Inactivity or a lack of filled orders for at least a year invites an inactivity fee of the lesser of the remaining balance in your account, or 50 units of the currency in which your account is denominated. The exception is the yen, for which 5,000 yen becomes chargeable.
Bottom Line
A comparison of the average spreads of FOREX.com and FXCM reveals that FOREX.com is the cheaper alternative. The inactivity fee is also slightly on the higher side for FXCM.
FOREX.com vs. FXCM: Security
What FOREX.com Offers
FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association in the U.S., the Investment Industry Regulatory Organization of Canada (IIROC), the Financial Conduct Authority in the U.K., the Australian Securities and Investment Commission (ASIC) and the Monetary Authority of Singapore.
It is also regulated by the Financial Services Authority (FSA) in Japan and the Cayman Islands Monetary Authority (CIMA).
All customer deposits through FOREX.com are kept separate from its own operating funds and distributed across a global network of custodian banks, which invariably hold an investment-grade rating and are monitored as per the guidelines set by the Risk Committee of GAIN‘s Board of Directors.
What FXCM Offers
FXCM is regulated in the U.K. by the Financial Conduct Authority, in South Africa by Financial Sector Conduct Authority and in Australia by the Australian Securities and Investments Commission.
The regulated entities under FXCM also vouch for the security of clients’ funds, with the retail client funds housed in segregated accounts with top global banks. In the eventuality of the firm’s inability to repay claims, claimants are compensated by the Financial Services Compensation Scheme up to £50,000 in the U.K. This is only applicable to clients who reside in UK and EU.
The National Futures Association (NFA) in the U.S. has barred FXCM from membership, citing “numerous deceptive and abusive execution activities that were designed to benefit FXCM, to the detriment of its customers.”
Bottom Line
Among the two, FOREX.com scores the highest on security. FXCM’s issues with U.S. regulators are a major red flag.
Final Thoughts
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% to 77.7% 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.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account
FOREX.com and FXCM are on equal footing on many counts. However, in terms of security, breadth of asset classes, features, and user-friendliness, FOREX.com is the clear winner. Combined with the fact that FXCM has had to face regulatory backlash and is not currently available to U.S. clients, tilts the scales in favor of FOREX.com.
ESMA risk warning: 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 understand how CFDs work and whether you can afford to take the high risk of losing your money.
Can you get rich trading Forex?
If you a skilled trader with deep pockets, it is possible to get rich trading Forex. But if you are an average Forex trader, the activity will likely result in financial ups and downs.
How do I start trading Forex?
To start trading Forex, your first step is to educate yourself on the market. Once you have a good grasp, find a good Forex broker who can help you make the right decisions.
How do Forex traders make money?
Forex brokers make money by charging a commission for making a trade or spread.
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
- Powerful, purpose-built currency trading platforms
- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.