Totally agree ForexGump. It’s like death, it’s not a topic BP X-Men, Industry types or Educators like to see displayed for all to see. Attack it or change the subject to deviate the discussion away from what might actually be the reality of Retail FX.
Most posts questioning the FX Industry are very short discussions around here.
Great question @TradingPanda
To answer properly, it’s first important to explain how margin trading in forex (and futures) differs from margin trading in stocks.
With stocks, when you trade on margin, you put up a fraction of the value for the shares you purchase, and your stock broker lends you the remaining amount of money needed to buy the stock. For example, if you wanted to buy $100,000 worth of AAPL on margin, you could put up $50,000, and your stock broker would lend you the remaining $50,000. They would charge you interest for this loan.
With forex (and futures), when you trade on margin, you put up a fraction of the value for the currency position you take, but your forex broker (or futures commission merchant) does not lend you any money. That’s because the margin you put up in forex (and futures) acts as a good faith deposit. For example, in the US, the margin requirement to trade EUR/USD is 2%. Assuming an exchange rate of 1.1500[0] for EUR/USD, that’s $2300 required margin to open a standard lot (100K) position in EUR/USD, since 100,000 euros would be equivalent to 115,000 US dollars at that exchange rate.
While forex brokers don’t lend you money to trade on margin, you can earn or pay rollover interest on trading positions you hold from one day to the next. In the 24-hour currency market, 5pm New York Time marks the cutoff between the end of one trading day and the start of the next. That means, if you hold an open position through the 5pm cutoff, it will be rolled over to the next trading day, and you will earn or pay rollover interest accordingly.
The screenshot above was taken from the Current Rates window of our FOREXTrader platform this Tuesday. It shows you could have earned 52 cents in rollover interest for holding a mini lot (10K) short position in EUR/USD that day at 5pm or about $5.20 for a standard lot (100K). Notice there’s a spread between the amount of rollover interest you would earn for being short EUR/USD and the amount you would pay for being long. Forex brokers make money from this rollover interest spread, and you will find FOREX.com spreads on rollover interest are competitive.
You may find this earlier discussion on rollover interesting (pun intended) Can someone explain to me what rollover interest is?
There are only 4 brokers in the US currently authorized to offer forex trading to retail clients precisely because of the strict regulatory requirements we have to meet which include accountability for the price where each customer transaction is executed. We can’t execute orders at off market prices like you suggest.
I wouldn’t worry about it - he’s clearly got a chip on his shoulder about something to do with retail brokers!
Well, not quite. Access to Prime/Interbank liquidity providers can be had for as little 80-100k with a Currenex provider.
The Ever Primed VIPER
I respectfully disagree. I have numerous posts regarding STP/ECN style brokers verses MM/Bucket Brokers. All retail platforms have back doors, so that the broker can protect themselves from outright nefarious or stupid and harmful trader behavior. MBT was a great STP/ECN Broker, but could not sustain it because, here it comes, get ready, people just plain cannot trade. there was not enough volume to keep it going.
Now as far as MM/Bucket Brokers are concerned, who is going to take liquidity for 1000 units, there will be no bank, hedgie, etc that would touch it. The cost of the transaction alone doesn’t make this worth it. So who would take the other side, if there is no liquidity from other small accounts, and usually there is not, your order might never get filled. However with an MM you can be filled because they have “inventory” of that currency at that price. You get your entry/exit in a timely manner and right price. If this arrangement is unacceptable, then trade Futures, or deal with the PDT regs in stocks.
Obviously one would go with a “reputable” Broker to minimize the Shenanigans, and before anyone says how do you know who is reputable, I was with PFG for years, and on my side, I never had any issue with requotes, stop hunts, etc. However, well you know, Russ Sr, Mercedes, and a long hose. Yes I really don’t like certain brokers for the 500 pm est spike, but, I am sure there is at least one MM broker that closes down during “Rollover”.
Understand, Spot Currency is decentralized, there is no one central regulated market. It is a bunch of little individual markets connected by the internet and different platforms. That’s why the prices on different providers tend to be a bit different as far as timing and pricing are concerned. Again if you desire a central regulated market, Futures and Stocks are for you.
The Ever Shining The Light VIPER
No James, No, this thread is for generating a conversation with some very informative responses, not juvenile comments from irrelevant FX fan boys. BTW, I have a chip on both shoulders, so I am very level headed.
Yes, you are level-headed. Your comments clearly show this, lol. 
Now let’s keep this thread on track shall we. Throwing around degenerate comments just makes you look silly and short fused.
Lately, I’ve been having this feeling that ECN brokers exist in some parallel universe. As things stand, there is no way for us, as traders, to check if the deals are in the market or not.
It’s a grey area from a retail trading point of view, at least anyway. As posted at the start of this thread, the only sure way to know if you are using a broker with True ECN execution is to cough up the funds and open an account with a legitimate ECN broker. Perhaps even more of a challenge for US based retail traders, the deposit + the assets you own as an individual certainly closes the door on many middle class families. At least as a UK registered citizen you can have a true ECN account with a c.$100K deposit. But, for US clients this requirement inflates significantly to several million USD - at least when reading the small print for account openings with IB [one of the more popular retail ECN brokers].
Not sure the broker you mention is permitted to render its trading services in the US. Futures trading is more popular there.
Oh my. Those saying they are ECN but take the other side of the trade is a combination of market maker/ECN. There is a real STP/ECN broker and yes it exists! My broker’s a real ECN. Never did I experience trade manipulation.
Going by your previous posts, you say you are with RedbullFX? Here is a snap shot of their ‘ECN account’
It might enlighten you to know that they do not charge commission and roll this up into an inflated spread - with spreads starting from 1.6pips. Do you really think this screams ‘True ECN’? After a quick chat with them, I was curious, they also said that it’s not normal practice to provide receipt of which liquidity provider took the other side of your trade? Furthermore, a minimum trade size of 0.01 lots - I cant imagine the cost to process that through STP?
Also, they have no mention of ECN/STP in their Terms and Conditions - or any business activity regarding the processing of client orders.
I certainly wouldn’t just assume they are ECN - quite to the contrary actually.
I would understand your opinion as you have not tried them. I think the only way for them to prove that they are real STP is for you to experience them. And so far, I did not have any issues with them.
I don’t judge that they are not a ‘good broker’ - but I certainly judge the fact that they say ‘True ECN’ - it doesn’t add up, that’s all.
I think Risk is right. ECN stands for Electronic Communications Network, this signifies a type of network and the proper platform to allow communication, this is opposed to Open OutCry (The Pits) or Trading on the telephone. STP is Straight Through Processing and this is the one that retail FOREX (spot currency) traders have a fixation with. This signifies how the trade is processed. With STP you trade directly with others on your liquidity Hub, without the Broker/Dealer/Market Maker touching it. All electronic, as the NASDAQ, and futures.
Now how can one identify STP processing?
So how does RedBull stack up, its a market maker, not a true STP, not very complicated. Weather or not they are trustworthy, honest, and all around good guys who knows, but they are not STP, not with those spreads.
The Ever Hating Misleading Statements VIPER
P.S RedBull REALLY ???
Of course Redbullfx isn’t an STP broker.
It’s a lightly regulated counterparty market-maker.
Only someone with very little experience and even less understanding would open an account there.
I’ve formed a pretty strong impression from their website, how I see them promoting themselves, and some other information.
I would advise anyone to have nothing to do with them at all.
We can all look through all the posts of Forextraderr here for ourselves (unless the mods decide to remove them - at the moment they’ve said they agree that there’s an issue there and they’re looking into it) and decide for ourselves why he’s here. I think it’s pretty obvious, myself.
There are certainly counterparty brokers who particularly want to attract gullible newbies as clients, specifically, and orchestrate posting of a certain kind about themselves in beginners’ trading forums. It’s easy to see why.
You should try talking to there live chat, it’s quite funny actually 
You’re saying that as an experienced trader, I think?
Remember that the noobs they’re trying to attract - partly by having these forum posts made by people saying how good they are - don’t really even know what ECN and STP mean, don’t understand what a counterparty is, and are much more likely than yourself to be taken in by all of it? 
Quickly’s post above serves a good purpose, here, I’m sure.
As an experienced trader, ha, I wake up most mornings at the crack of light and often ask the same question! Thankfully I have no fat fingers…
