Choosing
the right Forex Broker is not easy, there are several Forex Broker models to
choose from and each broker offers benefits and tools to make your trading
easier and to give you more value.
However,
there is no Forex Broker that is ideal for every trader. Choosing your broker
should be based on your specific needs, expectations and most importantly, your
trading strategy. The three broker models should be understood fully to help
you choose the best Broker for your trades.
Market
Making Forex Brokers, as the
name suggests, this broker model actually makes the market where you trade.
With a Market Maker, the broker can feed prices that have no correlation with
the real Forex markets (Interbank market) and more importantly, each time
you buy or sell an order, your broker is the counter-party to your trades. This
means when you win the broker losses, and when you lose, the broker wins.
Naturally,
there are many traders that have serious concerns with market makers due to the
conflict of interest between client and broker. Traditionally, Market
making brokers have issue accepting profitable trading strategies, Forex Robots and systems and to protect their own interests, they use techniques such as
trading restrictions, minimum market limits and levels, re-quotes and dealer
plug-ins to protect their profitability.
ECN
Brokers use an
execution flow that is completely opposite to a market maker. Through
technology, the ECN broker allows trader direct access to the real Forex
markets through institutional broker accounts with Banks, Forex Exchanges and
Liquidity Providers. Generally, an ECN broker will feed core/raw spreads to the
MT4 platform and charge an ECN commission on the traders volumes to generate a
profit.
As the
ECN model requires larger volumes for the Broker to make adequate profits,
there will be specific deposit, minimum trade size or volumes requirements and
as such, normal retail traders are often priced out of trading with an ECN
broker.
ECN
trading is highly beneficial for professional or high volume traders looking to
avoid the conflict of interest that a Market Making broker presents. ECN
offers the most transparent and fair true market conditions and execution flows.
The STP Broker Forex model offers more affordable direct-to-market trading to
retail clients using real market price feeds, automatic order execution to the
real Forex markets and the benefits of using banks, FX exchanges and other
liquidity sources for order filling.
STP
trading gives Forex traders the same execution advantages as ECN brokers such
as no -conflict order filling, real market pricing , order filling at real
market pricing using best bid and best ask and best execution policies, but
instead of offering core/raw spreads, the spread is marked-up and no
commissions are charged to traders.
The
mark-up allows the broker to generate profits without having to act as the
counterparty for its client's orders, but does however rely on higher volumes
to make money. Many tools and benefits an STP (or even ECN) brokers offer will
be based on traded volumes or minimum deposits to ensure that the broker can
reward its clients and still generate business profitability.
Both STP
and ECN brokers are specifically suitable for Expert Advisors, Forex Robots,
Auto-Clickers, News trading, High Frequency Trading and other profitable trading strategies due to the conflict free order execution flow and the
"no risk" policies used by these brokers.
Yadix
operates as a true direct-to-market execution with both ECN and STP trading
accounts available to professional and retail traders, with no dealing desk
intervention and no market making.
Based on
this philosophy, Yadix has built a strong reputation for Scalpers, EAs, HFTs
and profitable traders. Our services are within reach for any trader,
professional or beginner and our mission is to support all profitable traders
with fair and transparent order execution, tools and rewards so
high frequency traders can truly benefit and get additional value from their
broker.
You are
invited to learn more about Yadix benefits by visiting the website or visit our
live chat for a professional consultation.
No comments:
Post a Comment