Wednesday, 9 May 2012

Which Type of Broker Should I Choose?

That's completely up to you! One type of broker isn't better than the other because it will all depend on the type of Forex trader you are. It's up to you to decide whether you'd rather have tighter spreads but pay a commission per trade, versus wider spreads and no commissions.
Usually, day traders and scalpers prefer the tighter spreads because it is easier to take small profits as the market needs less ground to cover to get over transaction costs.
Meanwhile, wider spreads tend to be insignificant to longer term swing or position traders.
To make your decision-making easier, here's a summary of the major differences between Market Makers, STP brokers, and STP+ECN brokers:

See Below For an Example:

 Dealing Desk (Market Maker)

 Fixed Spreads
 Take the opposite side of your trade
 Artificial quotes
 Orders are filled by broker on a discretionary basis


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