The Best Forex Community
Chose an ECN
I am 100% anti Deal Desks. I have yet to meet a deal desk that is truly honest and fair for traders. I have been trading for 9 years, and have always paid a commission...I continue to do that. "No commission" and "fixed spread" come-ons are like TV infomercials...they sound too good to be true..and they are!
Don't buy the hype!
Find an ECN that you can trade with, and that you like. Customer service is key...you only need that one time that you need to speak to someone to go wrong before you realize how important customer service is!
Don't buy the hype!
Find an ECN that you can trade with, and that you like. Customer service is key...you only need that one time that you need to speak to someone to go wrong before you realize how important customer service is!
Replies to This Discussion
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Permalink Reply by cogman on -
Good point. I agree 100% . But how many ECNs are out there? I know of MBTrading and EFX which are basically the same. If you know of others please share. :)
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Permalink Reply by Asunblock on -
Yeah..good point as well. There are very few out there. I also know of Hotspot, although I hear their liquidity is lacking and they also require a $7500 minimum account. But at least they are an ECN, right!
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Permalink Reply by Antonia M on -
Trying to choose my first broker. I'm not totally understanding the pros and cons between an ECN broker like MBTrading, and other brokers like InterBank (which my friend uses). Also, what are some key criteria I should be looking for when evaluating companies?
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Permalink Reply by yuval on -
The main difference between brokers and ecns is that most brokers are market makers, which means that they have a dealing desk, and ecns are usually not. broker usually charge you through the spread and ecns usually charge you a set commission per ticket and give you very tight spread.
This means that brokers will usually open positions against you and ecns will just serve as a channel that connects you to the real forex market (big banks etc).
Brokers that are market makers create the market based on the real market. You buy and sell from them and not from the real market. If you win they lose, and if you lose they win. The reason why they operate like this is simply because most forex traders lose their money (some say 95% of them...) so in addition to earning part of the spread, they also earn the traders actual capital when they lose. It is legal to do this as long as the broker doesn't really shift the market for his own benefit (like spike up the rates to reach stop losses...). The pros of using a broker is mainly because they can offer you guaranteed stop loss, execution, and take profit on all market conditions (to a certain limit of course...). The problem is that they are in a conflict of interest with you. They are against you. They actually want you to lose.
Ecns will usually not guarantee execution or stop loss, simply because it is not up to them. If the market jumped over your desired rate they can't give it to you. But they want you to win because this means that they will get more commissions on your trades. With ecns you also end up paying much less for each trade you make sometimes even half or less than what you would pay with a broker.
When choosing a broker or an ecn it is very important to follow these rules:
1. Go with a known mid size or large broker.
2. Make sure the broker is regulated. If he is then you always have someone else to complain to in case of a problem.
3. Check some reviews sites like: forexpeacearmy.com or forex4noobs.com to get a general feel about the broker. These review sites are not the most accurate, and some of the reviews are obviously not honest ones, but they are good to show you if a broker is a scam.
That's pretty much it. Good luck!
Side note: We are introducing brokers to FXCM. If you would like to open an account with them we can help you with the process free of charge. send me a message if you are interested in more info.
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