ECN brokers vs Market Makers
Hi,
My understanding is that there are two types of brokers – ECN and market makers. What I read about them is that ECN brokers charge commissions and market makers make money by taking positions against your trades and cashing on spreads.
The notion I am getting is that ECN brokers are sort of "safer". Is it true in reality given equal circumstances and the fact that markets are not safe in general?
I would appreciate if traders who dealt with both types of brokers shared their comparative experiences from practical standpoints. In particular, what is real cumulative effect of commissions on profitability? I mean, I understand that if broker charges $4/trade and I make 100 trades I will need to compensate for $400 in commissions. But how does it compare in reality to “losses” due to pip spreads market makers implement?
What ECN brokers would you recommend?
Thank you.
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