the honest to Gawd differences are often so slight as to be ridiculous, although the ECN “tends” to have lower spreads and your overall trading price tends to be lower.
There is NO liquidity problems with ECN’s so that is a non-issue — a whole lot of peeps trading forex so there is NO shortage of traders to take your trade.
Market makers are (for the most part – there are some snakes !) no great land sharks waiting to devour newbs, though they will gladly take your money if you make a mistake and they provide charting, a decent trading panel and oftimes news and training for which they take a slightly larger spread than the ECN’s, which covers a lot of what they give you.
a psychological aspect of dealing with a “broker” vs. an ECN is that you SEE the charges add up with an ECN (which is spread PLUS commission, although a bit lower than brokers spread prices) while the “charges” are built into the “brokers” spread. Psychologically, its often easier to NOT see the costs than to realize you just spent a few thou on commissions.
HOW you react to this is inside you and may or may not upset you — it upsets me, as i simply look upon the spread as the cost of doing business and over a day, i have NO idea of how much ive given to a broker, and i like it that way (as long as theres profit, of course !)
there is an urban legend about the hunting of stops, and i will have to admit that its probably more true than not — stops usually live in a small range near support and resistance, so its easy to overshoot the support area by just enough to grab available buy or sell stops and certainly a lot of stop losses — all brokers are blamed for this, and i get around it by simply not using stop losses and using buy stops well clear of any “silliness”.
in the final analysis, LIQUIDITY is a non-issue with either for the normal retail trader and the role of the MM or “broker” is just part of the game – ECN’s are probably a bit more honest, as they earn a commission and dont give a hoot as to how much you may make – in fact, the more the merrier, and “brokers” are accused of working against any decent winners which is a partial maybe – but you have to be doing a good deal of winning to get to that point. (in gambling, trading and real estate, no one loves someone who wins all the time — its human and business nature !
so your research is great, but still leaves all the questions hanging free. My thoughts on the matter are simply “it just doesnt matter much”, as things are constantly changing, spreads are more and more competitive and you dont “marry” your broker — in this case, you can go find another without alimony payments, child support or orders of protection !
its a wonderful game — you just gotta be in it to win it !
enjoy and trade well
mp
[I][B]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !
As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !!
[/B][/I]