Forex broker business model

Forex broker business model

Posted: alserma Date: 28.06.2017

ECN Forex Broker | ECN Forex Trading Platform | Foreign Currency Exchange | Best Currency Online Trading | FXCC

There are about as many ways to go about this as there are brokers. For those who are in it for the long haul, however, it is generally best to adopt a set of practices which are deemed fair by their clients: Straying outside these boundaries, therefore, is not considered as being in line with the long term goals of the business.

How strictly these boundaries are enforced, especially when there is little chance of clients ever even becoming aware of any transgression, again varies from business to business.

Resurrecting the Introducing Broker Business Model

This is obviously not the case, and many brokers do take advantage of this opaqueness, but the details of that are best left for another discussion. There are generally considered to be 2 types of brokers providing access at the retail level: Electronic Communications Networks ECNs and Market Makers. ECNs are generally somewhat more exclusive, requiring larger deposits to get started, but are seen as providing more direct access to the interbank market.

As we will see, there are certainly advantages to this, but some disadvantages as well.

The extent to which this happens varies among individual brokers. There are also some benefits to trading with a market maker see our ECNs vs.

Forex Broker InstaForex: le trading sur le marché des changes.

They are NOT gunning for your stop losses specifically, but may be gunning for clusters of stops. A broker that offers a fixed spread tends not to fill orders during periods of low liquidity because this would expose them to undue risk, and as much as their job is to cater to their clients, remember they are in business primarily to make money for themselves.

Be especially aware of brokers who offer both guaranteed fills AND fixed spreads. When a broker offers something that seems too good to be true, you would be wise to question how exactly their business model is able to support such a risky practice.

As a general rule, a broker will help you only when your interests are aligned with theirs. How to Choose a Forex Broker ECN vs Market Maker.

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forex broker business model

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forex broker business model

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