XM Vs FXCM

Category: Broker Guides | Author: Trading Brokers | Date: July 25, 2023

Choosing the right broker is of utmost importance when it comes to trading in the financial markets. The broker you select can significantly impact your trading experience, execution speed, trading conditions, and overall success. In this article, we will provide an overview and comparison of XM and FXCM, two well-known brokers in the industry. Our aim is to help traders understand the key features, offerings, and differences between these brokers so they can make an informed decision based on their specific trading needs and preferences. By examining important factors such as regulatory oversight, trading platforms, pricing and fees, account types, trading conditions, research and education resources, and customer support, we hope to assist traders in selecting the broker that best aligns with their goals and trading style.

 XM Overview

XM

XM

XM is a well-established and reputable broker in the forex and CFD trading industry. With a strong presence since its establishment in 2009, XM has gained recognition for its commitment to providing a comprehensive trading experience to clients worldwide. The broker is regulated by respected authorities such as the FCA, CySEC, ASIC, and IFSC, ensuring a high level of trust and adherence to financial regulations. XM offers a user-friendly web-based trading platform and supports the popular MetaTrader 4 and MetaTrader 5 platforms, providing traders with access to advanced charting tools, technical indicators, and automated trading capabilities.

Traders can benefit from competitive pricing with generally low CFD trading fees, tight spreads, fast execution, and a wide range of trading instruments. XM offers multiple account types to suit different trading preferences and experience levels, along with leverage options up to 1:888. The broker also provides extensive research and education resources, including market analysis, webinars, video tutorials, and trading tools, enabling traders to enhance their knowledge and skills. With 24/5 customer support, multilingual assistance, and user-friendly accessibility, XM stands out as a reliable choice for traders seeking a comprehensive trading environment.

Pros and cons of XM:

Pros

  • Strong regulatory oversight
  • Wide range of tradable instruments
  • Competitive trading conditions
  • Multiple trading platforms
  • Research and education resources
  • Customer support

Cons

  • Limited asset selection compared to specialized brokers
  • Variable spreads
XM Logo

XM Group is a multi-award winning globally established and regulated broker that offers tight spreads, fast execution speeds and low commission fees, for trading over 1,000 instruments on user-friendly platforms. They also provide education, market analysis tools and convenient funding options.

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

FXCM Overview

FXCM

FXCM

FXCM is a well-established forex broker that has been serving traders since its establishment in 1999. With a solid background and years of experience in the industry, FXCM has gained recognition as a trusted and reliable broker. The company operates under the regulation of reputable authorities, including the Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC), ensuring a high level of oversight and client protection. FXCM offers a web-based trading platform, providing customers with convenient access to the markets and a user-friendly trading experience.

Traders can benefit from generally low forex trading fees, allowing for cost-effective trading. FXCM offers two account types, Standard and Active Trader, to cater to different trading preferences and needs. With a focus on forex trading, FXCM provides a range of currency pairs and access to global markets. The broker also offers research and education resources to support traders’ knowledge and skills development, including market analysis and educational materials. Customer support is available through various channels, including email, phone, and live chat, ensuring responsive assistance.

Pros and cons of FXCM:

Pros

  • Strong regulatory oversight from reputable authorities.
  • Specialization in forex trading with a wide range of currency pairs.
  • Competitive pricing and generally low forex trading fees.
  • Efficient trade execution.
  • Multiple account types to cater to different trading needs.

Cons

  • Limited asset selection beyond forex.
  • Market maker broker model.
  • No social trading features.
FXCM Logo

FXCM is an established and well-regulated online broker with an excellent range of powerful trading platforms that are loaded with tools and market insights to help you discover trades and make informed decisions.

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Comparison Between XM and FXCM

Choosing the right broker is a crucial decision for traders, and when considering XM and FXCM, it’s important to compare their offerings to make an informed choice

Regulation:

Both XM and FXCM are well-regulated by multiple top-tier authorities, providing clients with enhanced protection. XM is regulated by ASIC, CySEC, FSC, DFSA, and IFSC, while FXCM is regulated by ASIC, FCA, FSCA, IIROC, and FSA. Both brokers offer negative balance protection, but investor protection may vary depending on the client’s location.

Trading platforms:

XM and FXCM offer web-based trading platforms that cater to traders’ needs with their advanced features and user-friendly interfaces. These platforms provide a comprehensive suite of tools and resources, including real-time market data, advanced charting capabilities, and customizable layouts. Traders can execute trades efficiently, access a wide range of trading instruments, and analyze market trends to make informed trading decisions. The seamless trading experience offered by both platforms contributes to the overall satisfaction of traders.

Pricing and fees:

XM and FXCM have different pricing and fee structures based on the asset and account type. XM charges a commission of 0.04% with a minimum of $1 for US stock CFDs, while FXCM charges $0.03 per share with a minimum of $0.01. For the EURUSD currency pair, XM charges a spread of 1.7 pips on average for some accounts, while FXCM offers a spread of 1.3 pips for standard accounts. XM also charges an inactivity fee of $15 after one year of no trading activity, followed by a $5 per month fee, whereas FXCM does not have any inactivity fees.

Broker Type:

XM and FXCM are both hybrid brokers that use a combination of market maker and no dealing desk (NDD) execution models. This means that they act as a counterparty to some trades and pass others to liquidity providers. XM uses four different execution models depending on the account type: instant execution, market execution, STP (straight-through processing) and ECN (electronic communication network). FXCM uses two different execution models depending on the instrument: dealing desk execution for some forex pairs and NDD execution for most forex pairs and CFDs. Therefore, both brokers offer different options for traders who prefer different execution styles.

Leverage:

Both XM and FXCM offer generous leverage options, allowing traders to amplify their trading positions. XM offers leverage up to 1:888, providing traders with significant trading power to capitalize on market opportunities. FXCM offers leverage up to 1:400, offering substantial trading flexibility. It is important for traders to understand the risks associated with high leverage and use it responsibly, considering their risk tolerance and risk management strategies.

Asset selection:

XM and FXCM offer diverse selections of tradable assets, although there are some differences. XM provides access to a wide range of forex currency pairs, as well as CFDs on commodities, indices, precious metals, energies, and shares. This broad asset selection allows traders to explore multiple markets and diversify their portfolios. On the other hand, FXCM focuses primarily on forex trading, offering a comprehensive range of major, minor, and exotic currency pairs. Traders who prioritize forex trading may find FXCM’s specialized offering appealing

Social Trading:

XM offers the MetaTrader 4, MetaTrader 5, and cTrader platforms, all of which have integrated copy trading services. FXPrimus also offers the MetaTrader 4 and MetaTrader 5 platforms, as well as the ZuluTrade platform, which is a dedicated social trading network2. Therefore, both brokers offer a good range of options for traders who want to follow or copy other traders’ strategies.

Minimum Deposit:

XM has a lower minimum deposit requirement than FXCM. XM requires a minimum deposit of $5 for all account types, while FXCM requires a minimum deposit of $50 for the Standard account and $25,000 for the Active Trader account. Therefore, XM is more accessible for traders with smaller capital.

Withdrawal and Deposit methods:

Traders will find convenience in the variety of withdrawal and deposit methods offered by both XM and FXCM. Bank transfers, credit/debit cards, and electronic payment systems are among the options available, allowing traders to fund their accounts and withdraw their funds with ease. The flexibility in payment methods ensures a seamless trading experience, accommodating the preferences and needs of clients.

Which Should You Choose?

When deciding between XM and FXCM, it is crucial to consider both the assessment of your individual trading preferences and needs, as well as the recommendation based on your trader type or specific requirements. Assessing your trading preferences involves considering factors such as the desired asset selection, trading platform features, leverage options, and regulatory oversight. Align these preferences with the offerings and strengths of each broker.

Additionally, considering your trader type or specific requirements can help guide your decision. For example, if you prioritize access to a wide range of tradable assets and competitive pricing, XM may be a suitable choice. On the other hand, if you value a specialized focus on forex trading and efficient trade execution, FXCM may be a recommended option.

Ultimately, making an informed decision requires a comprehensive evaluation of your trading preferences and needs, as well as a consideration of the specific recommendations based on trader types or requirement

Conclusion

In conclusion, the comparison between XM and FXCM highlights key aspects to consider when choosing a broker. XM offers a wide range of tradable assets, competitive pricing, and strong regulatory oversight, making it a popular choice for traders seeking diversity and reliability. On the other hand, FXCM specializes in forex trading with efficient trade execution, appealing to traders focused on the currency market. Both brokers have their strengths and advantages, and the decision ultimately depends on individual trading preferences and requirements. It is important for readers to conduct further research, carefully assess their own needs, and consider factors such as asset selection, pricing, regulatory oversight, and trading platforms. By taking these factors into account, traders can make an informed decision and choose the broker that aligns best with their trading goals and objectives.


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