ECN Broker vs Forex Market Maker – What’s the Main Difference between ECN Forex Brokers & Market Makers?
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One Response to ECN Broker vs Forex Market Maker – What’s the Main Difference between ECN Forex Brokers & Market Makers?
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Yuan-Chieh
Market makers basically “make” the forex market. That is, if you’re trading currency pairs with a market maker, you don’t get direct access to the forex market. Instead, a broker sits on the other side of the terminal and pretty much trades against you.
With a market maker:
1. You see frequent requotes & stop hunting
2. You lose money on trades that otherwise seem profitable
3. Your currency feeds are manipulated, and
4. When (or if) you make money, you have a hard time withdrawing it to your bank.
The biggest reason why market makers get away with this is because they are not regulated.
All of these problems can be resolved by moving to an Electronic Communications Network (ECN) broker. Like a Straight Through Processing (STP) broker, ECN forex brokers are both regulated and reputed.