Hi guys, First of all just wanted to say this site has been a great learning tool for me. I’ve been reading up for about a month and I’ve been through the pips school twice. I feel I’m ready to start a demo account. I prefer to trade a few times a day, never holding a position more then 2-3 days max. Mainly holding on to a position for an hour or 2. I have been looking at EFX to try out but are the commissions going to kill me since I’m making a higher number of trades?
In short should I go for a an ecn or market maker. thank you
The commission question is entirely based on how much they charge relative to your typical profit per trade. If an ECN is going to take a sizeable fraction of your gains, then you probably are better off with a market maker. Keep this in mind, though. You might be able to get slightly better fills with the ECN because they don’t have the fixed spreads, so sometimes the spread is going to be narrower.
Does best broker really exist? No, am not sure. The thing is what you really want. There are few brokers who accommodate all types all traders and that is because they allow so many strategies and they offer the best technology.
I assume if you’re holding a position for a couple of days, you’re not trading a timescale less than 1h. If that’s the case then spreads shouldn’t really be an issue as your stop & profit target will be large enough to absorb the costs. Spreads start to become an issue (for me) on 5m and 1m charts, and typically I won’t trade if the spread is 10% of the value of my stop (eg. spread 3pips, stop loss 20pips = trade too expensive).
I trade the 15m & 1h charts using FXCM, Alpari, VantageFX and AxiTrader. All are decent brokers and their costs are negligible in the scheme of things.
Nope, I have one manual strategy and I have an automated strategy running on a couple of different VPS’s. My account is spread out amongst my brokers as, after MF Global going bust took my last account with it, I don’t like to have all my eggs in one basket.
I think there is no such thing as the best broker. A good broker is a good broker. As far as ECN or market maker it really depends on your preference. It is always good to have more than just one broker, just find one who you feel is suitable for you and not what another traders finds suitable for them.
I tend to agree with Rambo that the best broker does not exist. However, i believe is better to work with an ECN/STP broker than a market maker. The reason is very clear and straightforward in my opinion. In general lines market makers profit from the losing positions of their clients but STP/ECN brokers claim that they only make money on the markup from the spread they receive from their liquidity or from commissions charged on volume. Hence, you don’t have any conflict of interest with a STP/ECN Broker