Capital.com vs FXCM: Who is the Better Broker?

In the rapidly evolving world of online trading, choosing the right broker is one of the most crucial decisions that can significantly influence your trading success. Whether you’re a seasoned trader or just starting out, understanding the nuances between different brokers can help you make an informed choice, aligning with your trading style, financial goals, and risk appetite.

Today, we’ll take an in-depth look at two prominent players in the online trading space: Capital.com and FXCM. Both brokers have carved out significant niches, built loyal customer bases, and offer a comprehensive suite of trading tools. However, they differ in various facets—from account features and trading platforms to fees and regulatory oversight. As an experienced finance writer and trader myself, I aim to provide an honest, detailed, and approachable comparison to help you determine which broker aligns better with your needs.

Let’s delve into what makes each broker unique and how they stack up across key attributes.

Overview of Capital.com and FXCM

Who Are They?

Capital.com is a relatively new player but has quickly gained recognition, primarily known for its user-friendly interface, innovative trading tools, and competitive fee structure. Fully regulated across multiple jurisdictions, they cater to both beginner and intermediate traders.

FXCM (Forex Capital Markets), established in 1999, is one of the most experienced Forex brokers globally. They have a long-standing reputation within the industry, especially among serious Forex traders. FXCM is well-regulated and offers a broad offering of trading instruments and rich educational resources.

General Market Positioning

Capital.com targets traders seeking simplicity, transparency, and innovative trading experiences with a focus on CFDs on a variety of asset classes.
FXCM appeals more to dedicated Forex traders, with deep liquidity, advanced trading tools, and a robust regulatory framework.

Regulation and Safety

Capital.com Regulation

Capital.com is regulated by CySEC (Cyprus Securities and Exchange Commission), FCA (Financial Conduct Authority) in the UK, and ASIC (Australian Securities and Investments Commission). This multi-jurisdictional regulation provides a decent level of oversight, transparency, and protection for traders.

FXCM Regulation

FXCM has a long-standing regulatory presence, with oversight from NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission) in the United States, and also from the FCA among other regulators, depending on the jurisdiction.

Implications of Regulation

Both brokers are regulated, but FXCM’s U.S. oversight with NFA and CFTC is generally viewed as stricter, especially for retail traders in the US. For traders in the US, FXCM’s compliance with US regulations also means adherence to higher capital and reporting standards, instilling confidence in safety.

Account Types & Minimum Deposits

Capital.com Accounts

Capital.com offers primarily a single account type designed for versatility, with the main distinction being between demo and live trading accounts.

Minimum Deposit: Usually around £20 or equivalent, making it accessible for newcomers.
Account Features: No commissions; spreads are the primary cost.
Account Currency: Multiple options, including USD, EUR, GBP, etc.

FXCM Accounts

FXCM provides several account types tailored to different trading preferences, especially catering to active traders.

Standard Account: Offers typical spreads, no commission, and a minimum deposit of $50.
Active Trader Account: Lower spreads and commission-based costs; aimed at high-volume traders.
Minimum Deposit: Typically around $50 for standard accounts.
Account Currencies: USD, EUR, GBP, and others.

Comparing the Flexibility

FXCM’s tiered account structure provides more options for active and professional traders, whereas Capital.com’s simplicity offers ease of access for beginners and casual traders.

Trading Platforms & Tools

Capital.com Platform Overview

Capital.com offers its proprietary platform alongside integrations with TradingView and MetaTrader 4 (MT4). The platform is web-based, app-based for iOS and Android, and user-friendly, with sleek interfaces and intuitive navigation.

Key features include:

AI-powered trading tools
Visual risk management tools
Real-time educational support
Comprehensive charting and technical analysis tools

FXCM Platform Overview

FXCM primarily supports MetaTrader 4 (MT4) and Trading Station, their proprietary platform, which is highly regarded among Forex traders.

Key features include:

Advanced order routing and execution
Multiple charting tools
Automated trading capabilities
Access to extensive market data and news feeds

Comparing the Trading Experience

Ease of Use: Capital.com is often praised for its straightforward, intuitive interface, making it more suitable for beginners.
Advanced Features: FXCM’s MT4/Trading Station appeal to veteran traders seeking advanced order types, Expert Advisors (EAs), and deep customization.
Market Access: FXCM offers more extensive Forex pairs, indices, and commodities, aligning with serious traders’ needs.

Range of Trading Instruments

Capital.com Instrument Coverage

Predominantly CFDs covering:

Indices
Commodities
Forex (Major and minor pairs)
Cryptocurrency CFDs

They focus on CFDs rather than spot forex, which can have implications for certain traders.

FXCM Instrument Coverage

FXCM provides:

Spot Forex
Indices
Commodities
CFDs on international equities

Their strength lies in Forex, with over 50 currency pairs, including exotic options.

Which Offers More?

For traders focused mainly on Forex, FXCM’s extensive currency pairs and reliable execution are advantageous. Capital.com’s broader range of CFDs suits diversified traders seeking exposure across multiple asset classes.

Spreads, Commissions, and Fees

Capital.com Fee Structure

Commission: None—profit is primarily made from spreads.
Spreads: Average EUR/USD spread around 0.6 pips (variable).
Overnight financing: Standard rollover fees apply.
Other fees: No deposit/withdrawal fees, but inactivity fees apply after a period of dormancy.

FXCM Fee Structure

Standard Account: Spreads from 1.2 pips on EUR/USD, no commissions.
Active Trader Account: Spreads as low as 0.2 pips with a commission of around $25 per 1 million units traded.
Overnight fees: Competitive and based on the instrument.
Additional fees: Some inactivity fees, as with many brokers.

Cost Comparison Summary

FXCM’s tiered structure is better suited for high-volume traders who desire low spreads and are willing to pay commissions. Capital.com’s zero-commission approach offers simplicity and transparency, appealing to casual traders.

Trading Conditions & Execution

Capital.com Trading Conditions

Execution Type: Market execution with a focus on transparency.
Slippage & Requotes: Minimally reported; platform relies on real-time data.
Order Types: Market orders, limit, stop-loss, and take-profit orders.
Trade Settlement: CFD trading means no actual ownership of underlying assets.

FXCM Trading Conditions

Execution Type: ECN-like execution, designed for speed and reliability.
Slippage & Requotes: Very minimal due to liquidity providers.
Order Types: Advanced options—limit, stop, OCO, trailing stops.
Trade Settlement: For forex, spot execution; CFDs on indices and commodities are also available.

Reliability and Speed

FXCM generally offers faster and more reliable execution, which is crucial during high-volatility periods. Capital.com’s platform is robust but optimized more for medium-term traders.

Customer Support & Educational Resources

Capital.com Support

Customer Support: 24/7 live chat, email, and phone support.
Educational Resources: Extensive webinars, tutorials, news updates, and a dedicated knowledge base.
Investor Protection: Segregated accounts, negative balance protection.

FXCM Support

Customer Support: 24/5 live chat, email, regional phone support.
Educational Resources: Market insights, webinars, trading guides, and tutorials.
Investor Protection: Segregated client accounts and insurance schemes.

Which Is Better?

Both brokers emphasize customer support and education, but FXCM’s long history and extensive global presence often translate into more comprehensive support networks, especially for active traders.

Mobile Trading & User Experience

Capital.com Mobile App

Features: Full trading capabilities, real-time alerts, technical analysis, news.
Design: Clean, minimalistic, user-friendly interfaces.
Compatibility: iOS, Android.

FXCM Mobile App

Platforms: MT4/MT5 apps, proprietary Trading Station app.
Features: Advanced charting, order execution, automation.
Compatibility: iOS, Android.

Observations

Both brokers provide reliable mobile trading options, with FXCM’s offering geared toward technically inclined traders needing customization and automation.

Additional Features & Offerings

Capital.com

AI-driven trading insights
Demo accounts with unlimited reuse
Social trading features coming soon
Focused on simplicity and innovative tools

FXCM

Automated trading via MT4/EAs
Deep liquidity pools
Tailored accounts for professional traders
Integration with third-party trading tools

Regulatory Compliance & Investor Protection

Trust in a broker’s regulation is paramount, especially amidst reports of scams or mismanagement.

Capital.com, regulated by CySEC, FCA, ASIC, offers a high degree of safety, especially for European and UK traders.
FXCM’s US operations are under NFA and CFTC, ensuring compliance with US standards, which are among the most stringent.

Pros and Cons Summary

Capital.com Pros

User-friendly platform suitable for beginners
Competitive spreads with no commission
Innovative AI and risk management tools
Regulated in multiple jurisdictions

Capital.com Cons

Limited to CFDs (no underlying asset ownership)
Slightly higher spreads during volatile periods
Fewer advanced trading features for professional traders

FXCM Pros

Extensive Forex offerings and international markets
Advanced trading tools and customizations
Regulated in the US, UK, and other jurisdictions
Suitable for professional and institutional traders

FXCM Cons

Higher spreads on some accounts
Commissions apply for active trading accounts
Slightly steeper learning curve for beginners

Who Is the Better Broker?

Deciding between Capital.com and FXCM largely hinges on your trading style, experience, and preferences.

If you’re a beginner or casual trader looking for simplicity, transparency, and CFD trading on a well-designed platform, Capital.com emerges as a strong candidate. Its minimal fees, user-centric approach, and regulatory oversight make it accessible and safe.
If you’re an experienced Forex trader or professional, demanding advanced order execution, a broad range of currency pairs, and the ability to automate strategies, FXCM offers the tools, liquidity, and customization you need.

In essence, both brokers excel in their respective niches. The choice hinges on your individual needs.

Frequently Asked Questions (FAQs)

Q1: Which broker offers better trading conditions for forex trading?

A: FXCM specializes in Forex and typically offers lower spreads and more advanced trading tools suitable for high-frequency or professional traders. Capital.com provides a good selection, but with slightly higher spreads on Forex pairs, making FXCM generally better for dedicated Forex traders.

Q2: Is Capital.com suitable for beginners?

A: Yes, Capital.com is highly suitable for beginners due to its intuitive platform, comprehensive educational resources, and no-commission trading model.

Q3: Are both brokers regulated?

A: Yes, both are regulated, with Capital.com under CySEC, FCA, and ASIC, and FXCM under NFA, CFTC, FCA, and others. Their regulation offers a good level of investor protection.

Q4: Which broker has lower costs?

A: Capital.com’s no-commission structure and fixed spreads make it cost-effective for casual traders. FXCM’s accounts with low spreads and commissions are more cost-efficient for high-volume traders.

Q5: Can I trade cryptocurrencies on both platforms?

A: Capital.com offers CFD trading on cryptocurrencies. FXCM provides limited or no cryptocurrency trading in its core offerings, focusing more on forex and indices.

Q6: Do both brokers offer demo accounts?

A: Yes, both offer demo accounts to practice trading without risking real money, crucial for new traders.

Q7: Which broker has better customer support?

A: Both provide 24/5 support, with FXCM’s long-standing reputation and global reach often translating into more extensive support options.

Final Thoughts

Choosing between Capital.com and FXCM ultimately comes down to your specific trading goals, experience level, and asset preferences. If your focus is on simplicity, innovative tools, and diversified CFD trading, Capital.com is a compelling choice. For those who prioritize advanced Forex trading, deep liquidity, and customization, FXCM remains a top contender.

Remember, good research, demo testing, and understanding your risk tolerance are essential steps before committing real funds. Whichever you choose, ensure it aligns with your trading aspirations and provides a safe, transparent environment for your journey.

Happy trading!