A Guide to Forex Brokers: what Market Maker, STP and ECN brokers really are

[greentrends]

I am a beginner, your advice will be very helpful for me to choose a good forex broker

ECNs are out of reach of most retail traders…choose STPs…

[hissst]

i am unable to PM u…which LP do you use?

I am using Leverate, but looking at adding to that network if they are not good enough for ultra fast EAs. They do say they are though.

[cc123]

I am using Leverate, but looking at adding to that network if they are not good enough for ultra fast EAs. They do say they are though.

What regulation will your brokerage be operating under??Security of client funds?

[stealthepips]

I am using Leverate, but looking at adding to that network if they are not good enough for ultra fast EAs. They do say they are though.

MT4 itself is not fast enough for real scalping EAs… At first I was looking for a broker offering a free VPS (such as Exness) but now I realize im still more successful with simple manual trading ahaha ; )

[hissst]

What regulation will your brokerage be operating under??Security of client funds?

Pellucid FX has chosen to stay unregulated, if it regulates it ties the hands of it’s traders (Including my own trading strategies) by being regulated in one jurisdiction we violate other jurisdictional laws. Regulation has nothing to do with safety of funds nor safety and security of a brokerage.

I want to bring to your attention that the biggest and most criminal forex operations that have been discovered have been under the heaviest regulations, a criminal by nature breaks laws and regulations, hence creating laws to stop criminals always loses, the only people who are chained by those laws and regulations are you and I, the criminal will find his way around them.

Pellucid FX clients accounts of any account size are FACTUALLY segregated (many brokers claim this but do not actually do it, ask them to prove it, Actual segregation usually occurs at 50k deposits and up -not so with us). This is proven with a Lawyers letter to each client acknowledging the segregation. I am looking into insurance of clients funds at this moment, this should not be done within the bank, a third party should insure the funds for proper insurance purposes.

Pellucid FX is quite transparent (Hence the word “Pellucid”) It display’s it’s company formation and registration data on it’s website, it also includes direct contact to it’s Lawyer firm. Forex Angels has done an KYC investigation me and found me personally to be clean, these findings are also on the website. Our intention is to have open communication and actual transparency so the client can do his proper due diligence. SO much so in that Clients will have a direct E-mail to me in case something does not run as smooth as it should. Or if they just want to say hi

Just one more thing; To get bank accounts at all these days, let alone for an unregulated forex brokerage is extremely difficult, the banks not only check out the organizations but also anyone connected to it. Pellucid has an account at a Grade A Bank (Highest Moody’s grade), This is extremely tough to do, if Pellucid FX even remotely smelled like a bucket shop, or if we had even a relative that had a criminal history we would not have gotten an account.

[hissst]

MT4 itself is not fast enough for real scalping EAs… At first I was looking for a broker offering a free VPS (such as Exness) but now I realize im still more successful with simple manual trading ahaha ; )

Pellucid FX has a very fast webtrading platform on top of MT4 but it does not support EAs, I am looking for a faster platform that still suports EAs, I have only one other than MT5 and I am negotiating.

[The_Monger]

Hi all,i saw a video to youtube(named brockers shoking truth) that says that ECN is better to trade than everything else ,cuz everything else passes from a dealing desk…Well i am new to this but is my dream to succeed,so correct me if i am wrong.Also a question.What is better to use when u have a small capital to start with like from 25 EUR - 200 EUR.Cuz i read that “ECN � route to the actual market, requires big accounts, plenty of re-quotes”…Also best program to train my self for free? I am from europe. Thank you vm

[anon5370623]

Hi all,i saw a video to youtube(named brockers shoking truth) that says that ECN is better to trade than everything else ,cuz everything else passes from a dealing desk…Well i am new to this but is my dream to succeed,so correct me if i am wrong.Also a question.What is better to use when u have a small capital to start with like from 25 EUR - 200 EUR.Cuz i read that “ECN � route to the actual market, requires big accounts, plenty of re-quotes”…Also best program to train my self for free? I am from europe. Thank you vm

ECN and STP brokers are not much different in both cases market access is ensured with reasonable deposits, however I prefer to with STP as there are less requotes than on ECN platform. Spreads are roughly the same, however I found my STP broker Hotforex better in execution on commodity CFDs rather than on ECN platforms I tested. I know it depends on LP’s so it’s impossible to know this essential details without testing:), even demo won’t give you measurable data on that matter.

[Kezi]

Hi everyone am new in the block i will be grateful if someone can mentor me to be a good trader

[SuperTraderX]

Yesterday I talked about Market Making brokers today I�ll discuss STP and ECN brokers.
Forex Broker, which is not a Market Maker, is either a Straight Through Processing Broker (STP) or an Electronic Communications Network Broker (ECN). These types of brokers are typically (and sometimes erroneously) called Non Dealing Desk brokers.
ECN Brokers:
ECN Broker is a broker per-se, one who gives you a direct access to display your order in the market. This broker�s income comes from a certain mark-up on the spread displayed to you: for instance if the current actual spread on a EURUSD pair is 0.2 pips, this broker might display you a 0.5 pips spread making 0.3 pips on every trade you make.
There are several ECN brokers out there with Swiss Dukascopy being one of the most recognized with the ECN execution model.
For a retail trader ECN execution is often beyond reach: due to its inter-banking nature, traders are typically required to trade very large lots and minimum deposit requirements are somewhere from $50,000 to $100,000. FXOpen recently tried to cover this gap by offering a MT4 ECN platform, not very successfully or transparently in my opinion.
STP Brokers:
STP Broker is a type of a Market Making broker. This broker, most of the time, displays its own quotes (which are correlated to the actual inter-banking quotes).
Now here is the real complexity: sometimes this broker routes your orders to the market (acts as an STP broker) but sometimes it doesn�t (acts as a Market Maker).
For instance, successful traders or successful trading algorithms will be automatically routed to the market while small or losing clients will not. This way the broker profits twice: once by clients� losses and another by not losing money to successful traders (of course this never works 100% but it does most of the time).
This way the STP broker�s commission comes from two sources: unsuccessful clients� losses and commission arbitrage on routed orders � when you trade at 2 pips with this broker for example, it routes your orders to another broker or the inter-banking market thus making 1 pip without assuming any risk.
This model is also responsible for all the re-quotes and order rejections. When you open a large order the broker routes it to the market, but the prices there might have already changed (the market does move very fast sometimes) � so the broker is faced with two options: either rejecting the order asking for you to adjust prices or completing the order by taking the risk that it might end up a successful trade meaning the broker will have to pay you from its pockets (Nostro).
So how do you as a trader distinguish between a MM, STP or ECN broker?
Well, it�s easy to recognize an ECN broker: the minimal capital requirements and the ability to see not only the bid and ask prices but also the amounts on either side of the price (Depth Levels) is the most notable ECN feature.
Can you tell the difference between MM and STP? Probably not.
It�s very hard to distinguish between these two and most of the time the brokers use a hybrid model anyway. As I mentioned in the first part: most of US and UK regulated brokers will not �trade against you� in the way that will make you lose money, not because they are moral but because this might cause problems with their license.
So to sum this up:
Market Maker � is the market, profits from losses and spread, typically never re-quotes
STP � sometimes is the market, profits either from losses or spread or both, re-quotes
ECN � route to the actual market, requires big accounts, plenty of re-quotes

Michael
Forex Magnates

Found this a very insightful read.

Many thanks Micheal

[Trade_Master_2019]

If the customer service of any broker show such disrespect to any clientele, they are not worthy of you man; so either find another broker that shows a tone of respect to it’s clients that are sincere and honest or you could still stay with them and continue to milk them as long as long as your always winning that’s fine man, serves this scrupulous un-sincere brokers right, just make sure you would be able to withdraw all your winnings later on. lol

[BobRoss]

nothing cuz you guys are amazing

[cardonacarlos]

I am trading for 3 years now and I have never met such an issue before