Different types of forex broker

Different types of forex broker: Market Maker and ECN; fixed margin and a variable margin

Different types of forex broker: Market Maker and ECN; fixed margin and a variable margin

When selecting a broker, we can choose between two types of intermediaries:

Creator of the market intermediary;

Network brokers electronic communication (ECN).
The forex market is the OTC market or over-the-counter. There is no physical place where all jobs, as in the stock market. For example, in Italy, we have the Milan Stock Exchange; Wall Street of America in New York; and so on. For this reason, in the currency market exchange is carried out in real networks, made up of brokers, banks, and retailers. For this reason, the price of the currency pairs can vary from broker to broker.

Different types of forex broker, Forex Broker, Forex,

The main players in the currency market are the bank: move large amounts, and foreign exchange market (interbank market) is not available to ordinary traders, because they lack the numbers needed to participate in exchanges. For this reason, operators can perform exchange operations using one of the following two types of runners.

Broker Market Maker:

This type of runner is (literally) the price of buying and selling currency pairs. In other words, it is the broker to place buy and sell price (called the bid / ask rate) for the currency pairs, which are then displayed all its customers. When customers buy, brokers market makers have to open an identical height position, but in the opposite direction (and sell); In addition, when customers sell agent market maker to buy.

For this reason, buying and selling prices are set for their best interest: indeed, the creators market players earn through the spread (the difference between the purchase price and the sale price). Usually, spreads are fixed, and the amount payable is always the same; If, on the contrary, the spread depends on the volatility of the currency pair variable range you want to buy/sell (so the spread may increase or decrease depending on market conditions). Obviously, spreads generally remain at reasonably low levels, simply because each market maker agent can make your own money and then there is a lot of competition (note: the lower the spread, the less you have to pay the broker).

ECN Brokers

ECN brokers work differently. In fact, operators offer the best price/demand can you on the basis of bids / ask rate or other intermediaries involved in forex traders (banks and retailers). Spreads ECN brokers are changing, however, can vary depending on market conditions. In the case of high volatility, you can afford one spreads low or almost zero.

ECN broker earns mainly through fees relating to any commercial operation of its customers. This means that every time a position, you will have to pay a certain amount opens. But on the other hand, the agent does not make ECN market price and not contrary to their open positions. Time is eliminating almost entirely the risk of price manipulation: that is, the ECN agent can set prices at will.

On the other hand, the ECN broker trading platforms more often rare and difficult to use (often even without advanced graphics services or news); Although the market maker brokers platforms offer much easier to use and more comprehensive.

Forex Broker Bonus

Nearly all forex brokers offer cash bonuses when you decide to open an account and make your first deposit. Usually, there are two different types of bonds:

Enter bonus this case, simply log on to a broker to receive and not to make the first deposit of money;
Bonus: This bonus is awarded by the broker when you open an account and make a deposit. the percentual action comes in the tank, such as 50%, 60%; 100% and so on. Of course, there is always a limit to money that you can get a bonus.

Although bonds may appear attractive at first glance, do not forget that forex brokers are non-profit corporation: their task is to make money. I'm really working. For this reason, the money will "give" bonus, you can not pick them up immediately. All bonds have their own terms and conditions.

In most cases, to unlock the premium you must make a certain amount of operations. If, for example, a volume equal to 20, this means that you have to move 20 times the amount you get as a bonus.

Explaining everything with a quick example: If you deposit 200 € and accepted a welcome bonus equal to 50%, the broker will add € 100 in your account. Too bad for those withdraw € 100, as well as all profits from these € 100, 20 so you have to move that amount: what to open a business in the amount of € 2000

If you want to accept the bonus forex brokers, always carefully read the terms and conditions so you know what happens. You will find that often the best thing to do is accept any bonuses, or simply make your first.

About Forex Broker Traders

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