Yeah that is correct would cost $7 but you would get $7 per pip instead of $10 like on the ecn
Normally the difference should be that the Standard Account is a MarketMaker account and the other one a real ecn account.
You should always prefer the ECN account cause with the other one you are trading against your own broker!
Did you already open one? I think it is easy to switch
I actually did choose the ECN. I’m not sure if icMarkets is a Marketmaker but you could be right.Thanks for your input!
This is misleading. Lots of brokers like to throw around “ECN” when they’re not really an ECN.
IC Markets may connect to an ECN that contains multiple liquidity providers (LPs), but that’s simply to stream market prices.
They call themselves “True ECN” because the prices they stream are not altered.
So that just means they’re not cheating you with terrible pricing that’s displayed on your platform.
That said, the price you see is indicative only and is subject to the actual price at the time of execution of your trade.
There’s no assurance that the trade will actually be filled at the indicative quote. So there’s no requote, but the price can still be slipped (slippage). Which is normal.
Slippage can be either positive or negative. Depends on the broker if they’ll allow their clients to experience positive slippage.
So you get good pricing, but that doesn’t mean IC Markets isn’t taking the opposite side of your trade. Unless you’re trading large volumes (over $5M or 50+ standard lots), they probably are. But that doesn’t necessarily mean “you are trading against your own broker”.
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These are the same thing.
Read their marketing copy on Standard account closely:
Experience all the benefits of True ECN connectivity with an all-inclusive spread and no commissions.
The only difference is that with the Standard account, the commission is built into the spread, whereas with the ECN account, it’s not.
Separating out the commission from the spread is really only beneficial for high volume traders.
They’re both market maker accounts in the sense that the broker will automatically take the opposite of your trade (if the trade can’t be offset by another trader using IC Markets). They can then decide to hedge, but in the context of your specific trade, highly unlikely, unless your trade size is big enough to change their net positioning in a way that puts them at risk.
For sure in the liquidity pool are also liquidity providers, which work as “market makers”, but they can not see which trades come from which person and also does not see SL or TP. So they only see all trade from the ICMarket clients combined. So they can not trade “against” you as an individual.
If you read through their webpage, there is stated: “ECN environment where clients can trade with no dealing desk, price manipulation or requotes”
If they have “no dealing desk” they “can not” take the opposite side of the trade.
Also I asked in the support chat:
Fur sure inside the liqudity pool are also liquidity providers which works as market makers, but they can not see the trades from a single trader (SL, TP, … ), only all trades form ICMarkets client combined. So they can not trade against you as individual person.
IcMarkets is just an example. This should count for all real ECN brokers
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This isn’t 100% true.
“No dealing desk” just means that a broker’s execution is fully automated and prices are obtained directly from LPs.
The “execution venue” is still IC Markets, not the LP on the ECN network.
This means that they can decide whether to offset the individual trade or internalize the trade, aggregate it and only offset if their net positioning exceeds their risk limits.
With the latter, they might not be “trading against you” but they’re still technically taking the opposite side of your trade since they are your counterparty.
Ask them if they offset the trade on a one-to-one basis at the time of trade execution.
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In a typical anonymous ECN model, the individual client must have secured their own credit line from a traditional Prime Broker or Prime of Prime provider in order to participate in the ECN.
There’s a big difference between you (the trader) being able to access the ECN vs your broker being able to access the ECN.
If it’s the latter, then almost every forex broker does that. That’s how they get access to pricing…from ECN(s).
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Where do you take this information from? Only your thoughts? ICMarkets states something different and at a ECN account normally the “execution venue” is not at the broker! We have no reason to not believe this.
@Cryptopotamus is correct in all of his posts above and clearly has a decent understanding of how retail brokers operate. I can assure you that this is not just based on thoughts.
It’s not uncommon for retail brokers to offset long and short positions in-house whilst passing the net exposure into the true underlying market at said average price. There’s also nothing wrong with this and it allows NDD brokers to also provide a liquidity, internally.
On top of that it also works to their favour as they are not paying spread by passing each and every trade to market - although we do pay spread with each and every trade. The spread we pay (which is the retail brokers margin) would be diminished by the spread that they would pay to place the trades into the market through the LPs - the net of the spread would be their Net Profit from trading activity.
Thank you for a very interesting thread but I am getting worried now! If the broker is the counter part to my trade and they can see my SL, an easy way for them to “offset” their risk exposure is to hunt my stops. Do I get that right or am I overly paranoïd?
Hey T, allow my to help you on this issue.
Every retail electronic trading platform has a backdoor where the Broker/Market Maker/Dealer can see you Stops, TP’s etc. This applies to all financial products not just Spot Currency. In fact at the Big Houses even the desk traders are watched, well they are supposed to be watched this way.
In reality, the only way for you to avoid your stop to be seen is to manually enter it when it hits your price.
Please understand, when it comes to Spot Currency trading, if you are on a “retail” platform, the majority of your trades will be against “in House” liquidity, and a small amount will be executed against other traders on your Hub.
Now about Hubs, think of a Hub as an aquarium, and you are a small fish, you will interact with the owner of the aquarium and the other small fish in the aquarium. Now just outside, there is the Ocean with the biggest fish in the world, but you never interact with them because, you are a little fish and you cannot control where you swim. Now maybe you grow big enough, to where the owner puts you in a bigger aquarium with bigger fish, you still don’t interact with the fish in the ocean, just the fish in the bigger aquarium.
However with this being said, the owner pumps in water from all of the the aquariums and the ocean. These are the different Data feeds that the Broker pushes on to your trading platform. Now as a small fish, you exist in the “Aggregated” water, but you really do not affect it as much as it affects you.So when you take a trade, if you don’t stop out before your account goes to zero, this will affect you more than the aggregated prices that you see on your platform. Even if you make a profit, like the PT has, it affects you, the broker (owner) directly, but the overall market/ocean, barely even sees it.
Another way to understand this is financially.
Your Broker is a market maker, they make a market that can be traded by individuals with small accounts, so, using the Futures model, your broker is the Market, the Clearing House, and the Exchange.
This is why, when I see all of the ad’s for FOREX MAVEN SUPER TRADER Market Broker, registered in Stupovia Ripoffastan, and people touting them as the best I laugh.
If you live in the US, Canada, GB, the choice is pretty easy, but if your Broker/Dealer is in a country where the laws are, well you know, it becomes more difficult.
Anyway, as I have said before for the US, Oanda, Forex.com, TDAmeritrade, are all fine and I recommend them for anyone starting out in FOREX.
The Ever Eating Rats VIPER
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This question evolved into an epic topic I could not have imagined. Thank you for that representation of how the market works!
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Hey Rat Muncher, thank you for taking the time to explain all this, I need to understand these things. I live in England where as you say there are regulations but the idea of entering a round of poker where others see my hand through that back door and I don’t see theirs does not exactly fill me with confidence. But I’m glad there’s so much good will and advice on BabyPips!
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And if you try to close the door you get locked out…!
Hey T,
also from the UK. there’s nothing you can do to avoid this doubt, it’s constant with all brokers, but I’m certain this is not in there interest. if anything they will offset you orders, should they be substantial, to market - once they confirm in-house that you know your stuff.
imagine for one second, the owner of myfxbook, he aggregates all orders on accounts, he can see where stops are grouped. A great idea and profit making venture, but totally illegal if not in the small print.
You just don’t know who to trust nowadays …
I’ve also reservations about IC Markets MT4 now as win10 defender has blocked it numerous times and it won’t work unless you give it permission to do whatever it likes to your PC,
Also looking at a few security logs reveals just before the block suspicious powershell activity was also blocked…!!!
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Thanks for reassurances!
Ah! good to know about this organisation.
Since I started this thread I have joined IC Markets and I have gained some experience with their services. I must say their customer service is outstanding, polite and thorough. They reply to each and every one of my questions very quickly.
I had one instance where during a news event on CADJPY I had a positive slippage of about 15 pips but I also had one instance on NZDUSD at night where my stop loss endured an 82 pips slippage which resulted in a negative balance from +$500 to -$500. I have received a very long explanation how and why this happened and was asked to deposit for the negative balance. After I did this they actually offered me a full embursement. I don’t think this is standard policy but I refused it anyway. Nonetheless this kind of slippage makes me very cautious in the Forex market and I am inclined not to trade Forex because of the possibility of such large slippage and especially negative balances. Aren’t liquidity pools supposed to prevent such extreme slippages? I thought this would not be a problem with a large provider such as IC Markets.