When it comes to Forex brokers there is this erroneous belief that ECN brokers are superior to Market Maker brokers in every way; this is not the case.

The two broker types have their advantages and disadvantages and this is what we will try to establish in this article. Depending on the angle you are looking at it from, the mark maker brokers shade this one. Market maker brokers offer leverage as high as 1: Since it is advised to stay away from high leverage, most traders can benefit from either of these forex broker types.

Market maker brokers do not charge commissions but they normally charge high spreads. ECN brokers, on the other hand, charges commission for every round turn trade and also charge spreads that are a lot tighter than what the former charges.

So at the end of the day the transaction costs even out.

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You have to decide what works best for your strategy. Market maker brokers on the other hand risk some exposure in other to prevent this. So you can pick any of these brokers depending on how friendly volatility is to your trading system.

A market maker broker is usually the counterparty in most of the trades taken by the clients, and this exposes them to market risks. Usually, the risk is managed by hedging positions with a higher level counterparty but this may not be the case with some of the brokers.

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Regardless of how well the risk is managed it is still a risk. ECN brokers do not need to worry about risk as they only serve as a connecting port between the trader and the market, gaining commissions for the services they render.

Therefore the probability of indian share market technical analysis software ECN becoming insolvent is very much lower than it is for a market maker broker. This should be a source of fx trading jobs uk for clients who have large amounts of money in their trading accounts.

However, most reliable market maker brokers keep clients funds in a segregated account different from the operating capital of the company.

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This is the major argument used against the market maker brokers. Since they are the counterparty to you trades, some of them engage in various sharp practices like stop-hunting, platform freezes slippages etc. An Ecn forex brokers in singapore broker on the other hand will not do any of the mentioned manipulation methods but they expose the trader to the full effects of the dog-eat-dog nature of the forex markets.

An ECN broker is ideal if you are an experienced trader, or a scalper that has enough funds to meet the minimum deposits requirements.

Otherwise, settle for a honest market maker broker.

There are so many of them out there that you can trust with even 10million dollars of trading capital. Menu News Brokers Trading Education Trading Platforms Trading Tools Blog Contact. Brokers ECN and Market Maker forex brokers compared.

ECN and Market Maker forex brokers compared When it comes to Forex brokers there is this erroneous belief that ECN brokers are superior to Market Maker brokers in every way; this is not the case.

Leverage on offer Market maker brokers offer leverage as high as 1: Cost of transactions Market maker brokers do not charge commissions but they normally charge high spreads.

Sustainability of the business model A market maker broker is usually the counterparty in most of the trades taken by the clients, and this exposes them to market risks. Frequency of manipulations This is the major argument used against the market maker brokers.

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Which of these types of forex brokers is the best? About the author admin. Brokers What Makes For Good Forex Brokers For Your Trading? News Forex Market W. News Diagrams and Charts Related with Foreign Exchange No comment. Categories Brokers News Trading Education Trading Platforms Trading Tools.