FXCM
FAQs
•
How can FXCM offer
smaller trading sizes?
•
What is the difference
FXCM Mini account & regular account?
•
How does the Margin
Call work?
•
Do you Charge
a Commission on the Mini account?
•
How Do I Switch
from a Regular Account to a Mini account?
How
can FXCM offer smaller trading sizes?
Smaller
trade sizes pose several challenges to foreign exchange
firms. There are two primary issues that have prevented
firms from offering smaller trade sizes: high labor
costs and risk management. To offer smaller trade
sizes, most firms would have to hire more dealers,
which would make the cost exorbitant. The FXCM Mini
account features automatic execution for most accounts.
All trades are executed without human intervention
(just like a demo account). This keeps labor costs
low. The second issue is risk management. The smaller
size trades offered on the FXCM Mini account are
difficult to offset in the broader market. FXCM
has developed a proprietary risk protocol for the
FXCM Mini, which involves aggregating volume into
sizes that can be offset in the broader market.
The spreads on the USD Mini are wider to reflect
the additional effort taken on behalf of FXCM to
offset smaller trades.
What
is the difference between the FXCM Mini account
and a regular account?
The
FXCM Mini account is designed to introduce traders
to the excitement of trading currencies online and
for those with limited investment capital. With
a Mini account, you trade using the same platform
as our regular traders. With as little as $300,
a trader can open a FXCM Mini account and begin
trading foreign exchange with FXCM. On the Mini
trading platform all trades are executed in standard
sizes of 10,000 base currency per one lot, 1/10th
the size of a regular account. The smaller trade
sizes enable traders to take smaller size risks.
How does the Margin Call
work?
If
the equity balance in your account falls below the
margin requirement of 1/2% per lot, a margin call
will be generated. In the event that an account
exceeds its maximum allowable leverage, ALL open
positions will be liquidated immediately, regardless
of the size or the nature of positions held within
the account. For example, a FXCM Mini account with
8 lots in open positions would need to have 1/2%
of the total position value in account equity. If
the account equity falls below 1/2% of the position
value due to floating trading losses, the entire
8 lots would be liquidated at market price. Clients
are not notified prior to the liquidation of their
positions but will see this immediately on the FXCM
trading station in real time.
Do
you Charge a Commission on the Mini account?
No.
Hawaii Forex and FXCM charges no commission or transaction
fees to trade an FXCM Mini account. As the leading
player in online currency trading, FXCM
receives and is able to pass on the benefits of
size to our clients.
The
FCM and IB are compensated for their services through
the spread between the bid/ask prices.
How
Do I Switch from a Regular Account to a Mini account?
In
order to change from a regular account to a Mini
account, or a Mini account to a Regular Account,
you can request a change of account type through
MYFXCM by clicking the Login
button on the upper lefthand corner of the home
page.
