I hope this reminds you the basics you need to know about Forex market participants, the way they operate and what should you expect from these. The principle intent of this thread would be to discus Market Maker and Electronic Communiion Network brokers.


ECN is a community of market participants such as banks, market makers, companies and standalone traders. All of these offer liquidity and discuss the best bid/ask prices. An ECN broker joins his liquidity providers (the more the merrier) and provides full market depth. A legitimate ECN broker has no conflict of interest with the customer. Contrary, the broker is interested, a trader has a long and happy trading life. The bigger the funds a trader gets, the greater and the bigger transactions he makes, the greater trade fees he or she pays. Sounds great does not it?


So what is holding all traders out of shing to ECN brokers? The lack of fundamental knowledge. They are underedued about the brokers and this creates the fanciful disadvantages. Additionally, traders have been accustomed to Market Makers, shing one for another, expecting they will find the very best one. However, as sad as it may be -- they won't. It will become evident, when you understand how Market Makers operate. I love an easy and simple explanation about MMs and ECNs. Market Maker is just like a casino, you gamble versus the casino sometimes you win, but most of the time you lose. As everyone understands -- casino always wins. Generally, market makers have no liquidity. You do not trade beyond their brokerage firm. What you get is a Forex simulation with the illusion of money, expecting to win, but the broker places all of the effort for you to go down. The more you eliminate the more they profit.


As for its ECN brokers, their like a poker tournament. You play versus the rest of the gamers and your results depend only on your skill. As straightforward as that.


The traders and brokers have been stuck in the constant loop. The identical trading platformsthe same provides and above all the same problems. Even if you will find the proclaimed bonus to your account, you will inevitably lose it together with your capital. And then starts the blaming game. If folks would understand the essence of MM's they would not blame them. It is just the way they operate.


Considering the fact, the future of Forex trading belongs to Electronic Communiion Network (ECN) brokers, there should be several major brokerage firms evolving and suggesting ECN trading opportunities to traders searching for it. Many comparisons and reviews about MM vs. ECN indie a few of the disadvantages of the ECN --huge capital required to trade, variable spreads and large trade fees, bad trading platforms. These arguments are completely obsolete.


Nowadays, you don't want a truckload of greenbacks to trade ECN. The majority of the brokers deliver mini accounts -- you'll need about 400 - 1000 dollars to begin trading. About perfect for novices and traders who wish to test the ECN atmosphere.


Factor spreads, well, they may be a bit upsetting at times. But this is the true Forex market atmosphere. Fixed spreads are irrational. They can't be fixed, that's the character of the spreads. They proceed, depending on the market requirements. They may go up to 1-2 pips or higher, but they can go as low as 0,4 or less. Taking this into account it's not really bad is it? Scalpers should be jumping high into the atmosphere. Low spreads is the Market Maker bait in their opinion. However they could not provide spreads as much as ECN's. Based upon your trading experience and fashion, variable spreads shouldn't be a problem for you either.


Let's look in the trade fees. Let's say, which you're trading EURUSD and the spreads are as low as 0,4. You open a 100k place and pay about ~3$ for it. Would you dare to compare this cost of trade with costs of a Market Maker? I guess .


So does the future belong to ECN? It is merely inevitable. In the not too distant future, the people will probably be shing to ECN brokers; the market maker times are long past due. This will happen, when traders' perception about market participants increase. People must talk, write and study more about the market participants. Every single trader, starting from the newcomer, should know full well, when choosing a broker, while it is an ECN or an MM broker, what should he expect and the way the broker operates. Question every announcement and suggestion your broker gifts. There is no such thing as free money.


There is more than enough deception, false promises and fake material about Forex in the world wide web. The majority of traders are totally clueless about differences of the brokers and they simply begin searching for answers after they have emptied their accounts. Basically there are not any pros or cons for neither of those brokers. They are different from the core and people trading together should select themnot by error, or simply by being tricked -- only by their personal preference and understanding.


Place some hard work and analyze every single facet and option prior to opening an account with a brokerage firm. It is your money. Do not give it away so readily.