I would say most if not all BIG TRADERS, use an ECN. There are a number of reasons why. But, the main reason, is they are BETTER. They give you true market access and you are not trading within an artificial market where your Broker is your competition. Your broker is manipulating you, and your broker’s platform is manipulating you. You are basically buying or borrowing units from your BROKER. It’s not an even playing field. And your broker is on the other side because you are playing their market, and they keep CLOSE TABS on THEIR market.
Why do you think ECN brokers are making such a big push to re-program these platforms (MT4). It’s because these retail platforms were designed specifically for Market Makers, and by there design requirements. ECN brokers are basically in the stage of stripping these programs down to match their standards and the BIG client standards.
And this doesn’t mean all Market Makers are bad, I am not saying this is the only way to go and that Retail Brokers are all crooks. But for the majority, you are setup for failure from the beginning, and leverage has a lot to do with this, aside from platform manipulation (programmed into your platform) and other tactics and the fact that, it’s THEIR market.
ECN broker’s don’t give you (most of the time) more than 100:1 leverage, in rare cases maybe a maximum of 200:1. And the reason why is because your in the TRUE MARKET through an ECN. They aren’t trading against you, they are giving you access to the true market. Your playing with the big players. They want you to be successful. This doesn’t mean you will be. Market Makers allow up to 400:1 leverage for a specific reason, to drain your bank. This is a fact. There are NO ECN’s as far as I know, that allow over 100:1 leverage.
Why do you think it’s the only market that allows 400:1? Haha.
You can you can only open “Standard” accounts with ECN’s as far as I know, but if you manage to find a decent ECN that will allow you to open an account for $1000-$3500 (and there are some good ones out there that will, but not many, maybe 3-5 ECN Brokers out there), they will allow you to trade a Standard, but with Fractional Lots (.10 of a Lot, etc) so you can trade $1 per pip value, and so forth, as there are no Mini/Micro accounts with ECN.
This is why I am a partial fan of Oanda as a Market Maker because the 50:1 leverage. Too much leverage is not a good thing. The goal is to minimize your risk, manage your money, enter trades with the highest reward to risk ratio possible, and slowly but surely compound your account over time. If your account is growing and compounding in the tens of thousands, with a market so volatile, you will never need anything more than 100:1. Leverage is NOT a good thing, by any means.
So, I’m getting away from the topic a bit but, majority of big money players use ECN brokers. And the account minimum for ECN brokers can go all the way up to $50,000 to open a standard account for some of the top ECN brokers. And these smart money traders get better everything. They are in quicker, out quicker, no spread, no manipulation, no lock ups, no freezing, very small commission per unit amount, I can go on and on and on, and it’s the true market.
There are ECN’s out there that you can get into for I’ve seen, as little as $1000 like I mentioned above. You wouldn’t want to get in for any less with an ECN in my opinion. And you wouldn’t want to get in for much MORE. Why? Because the goal is to manage, minimize risk, compound and grow. Take your initial investment out, and some additional return, and repeat the process, over and over and over again. This how you accumulate wealth.
Phil you should be looking and researching to diversify your accounts over to ECN’s if you aren’t already. It’s not something you obviously want to do immediately but, if you’ve been compounding 3-4 figure small investment accounts with Market Makers into 5 figures and growing, diversifying with ECN brokers would be a smart choice. Doesn’t mean you have to stop trading Market Makers either. You can have multiple accounts. You may already have multiple accounts.
The only way I could see a big money player in a Market Maker or Artificial Market, is if they were joining WITH the Market Maker itself, and if the Market Maker gave them a distinct edge, or my lord, they were the Market Maker. Or in very rare cases IMO, if they started with a Market Maker and just feel more comfortable because they made their millions through that Market Maker. Why do you think they put a minimum cap on the capital requirements for Market Makers. I think it should be larger personally. Weed out more of these crook Brokers opening Markets for one pure reason, to drain your bank.
