I’m responding to a fellow that is inquiring about risk with brokerages I thought it important to address it here. It’s an important subject. I am not an expert but here are a few things to consider on your research.

I was reading your comment and I’m not quite clear on what it is you’re asking. Do you have an account with this firm and are you concerned about your deposits?

Firstly let me tell you that I have a personal relationship with some of the annalists at FXCM in the New York office so my answers may be a little bias.

What is it you are concerned about? If you are worried you may loose your money on deposit with a broker then here are some things you should consider.

Regulations vary in each country. I was very fortunate several years ago when my broker RefcoFX collapsed under a scandal. My account was with RefcoFX Canada and my deposits were protected under Canadian regulations and I lost NOTHING. In fact my account was picked up by Man FX Canada and I have carried on with this broker without interruption. We have very good banking and brokerage regulations in Canada. If you reside in Europe you may consider FXCM UK as they offer segregated funds. This too offers a level of protection. Do a little more research to find out the regulations in each country and how your deposits are protected.

As far as how much they charge per transaction I think FXCM are quite competitive. Remember that some brokers offer lower spreads at less volatile times but the rates likely float and would result in higher spread during busy trading times. How fast orders are executed and fractional pricing also play a role. And does the broker with lower cost have a trading desk you can call in the event you computer is down and you need manual execution? Regarding the ‘Roll Interest’ this is a function of leverage for some brokers. Different leverages produce different costs of ‘Roll’. And don’t forget, you will be paid on ‘Roll’ as well if you are on the right side of the trade.

My final advice for you is to call several brokers and talk to their customer service reps. Ask all these questions and then make an assessment based on what you believe provides you the service and protection you want.

I think this subject would be great for discussion on Rob Booker’s Forex Radio. I’ll propose it to him.

Cheers.