How do I decide on the right broker? What are the pros and cons? What works best for someone, somewhat new?
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Picking a broker. 18 replies
Quoting www.singahut.coDislikedYou should absolutely choose a broker with a variable lot size
singahut.com
Ignored
Quoting philmcgrewDislikedAnd you should not be posting links to some blog that you are affiliated with nor should you be posting your own website which is an ebay store. By the way, does that e-book with the recipe for homemade shampoo really work? A lot of forex traders constantly ask how they can repair their split ends.Ignored
Cons:
ii. Market Makers
Market-makers "make" or set the prices on their systems based on what they think is best for themselves as the counter-party. This is because every time you sell, they must buy, and when you buy, they must sell to you. This is why they can give you a fixed spread since they are setting both the bid and the ask price. Many of them will then try to "hedge" or "cover" your order by passing it on to someone else; however, some may decide to hold your order, and thus trade against you. This can result in a conflict of interest between the retail trader (you) and the market-maker.
Pros:
Cons:
*Above exerpt was taken from Grace Cheng
To get a list of ECN/Market Maker brokers, you can visit the link below :
http://www.goforex.net/forex-broker-list.htm
For me the ideal will be an ECN broker, but like the above points state. You do not get to use integrated chartings for these ecn like luxuries. So this is my setup:
Broker : MBT
Chart : Ninja Trader (any comments?)
Yes, i do have to pay yearly subscription, infact im thinking of purchasing it at full cost. Ninja Charts are difinitely one of the best if not the best platform to work on and the best thing is, they can link to almost any major broker's data feed.
I heard that efxgroup is thinking of integrating MT4 to their datafeed. If this really happens, it will definitely open a new window to FX trading...but till today, there is still no update.
To summarise, ECN or Market Maker like FXoppurtunist states, "its really up to you" ...know your drawbacks and style, read FXoppurtunist thread and try to understand the message.
Always, always remember, NEVER PUT YOUR WHOLE TRADING EQUITY WITH YOUR BROKER COZ YOU WILL NEVER KNOW WHEN ONE DOES A REFCO. Just put enough.
If your doing a mini with 1% leverage. Equity 10000 with 2% risk. Max 4 open position at one time. How much should you have with your broker?
...1200 > 1400
Quoting philmcgrewDisliked...By the way, does that e-book with the recipe for homemade shampoo really work? A lot of forex traders constantly ask how they can repair their split ends.Ignored
Quoting jest1081DislikedOk on a more serious note....
If you have read all the posts in 'Broker Discussion', like me, you will be spoilt for choice and become even more confused. But thats what you want to be...coz it will cause you to dig deeper and further look into the most ideal choice thus removing all doubts.
Okay for a start, there are 2 types of FX brokers;
i. ECN Like
ECN brokers pass on prices from several banks and market-makers, as well as from the other traders in the ECN, and display the best bid/ask prices based on these input. This is why sometimes you can get no spread on ECNs, especially in very liquid currency pairs. How do ECNs make money then? They do so by charging you a fixed commission for each transaction.
Pros:
- You can usually get better bid/ask prices since they come from several sources
- Variable spreads between bid and ask may give no spread or tiny spreads at times
- If they are a true ECN, they will not be trading against you but will pass on your orders to a counter-party
- You will be able to offer a price between the bid and ask with a chance of it getting filled
- If they support Stop-Limit orders, you can prevent slippage during news by making sure that your order either gets filled at the price you want or not at all
- Prices may be more volatile which will be better for scalping
Cons:
- Many do not offer integrated charting
- Many do not offer integrated news
- Many of the trading platforms are less user-friendly
- Because of variable spreads (between bid and ask,) it may be more difficult to calculate stop loss and profit target in pips beforehand.
ii. Market Makers
Market-makers "make" or set the prices on their systems based on what they think is best for themselves as the counter-party. This is because every time you sell, they must buy, and when you buy, they must sell to you. This is why they can give you a fixed spread since they are setting both the bid and the ask price. Many of them will then try to "hedge" or "cover" your order by passing it on to someone else; however, some may decide to hold your order, and thus trade against you. This can result in a conflict of interest between the retail trader (you) and the market-maker.
Pros:
- Usually give free charting software and news feed
- Prices can be "smoother" and less volatile than ECN prices (this can be a con if you are scalping or trading very short term)
- Often have a more user-friendly trading and analysis interface
Cons:
- They may trade against you. In that case, there will be a conflict of interest between you and them
- The price they offer you may be worse than what you could get on an ECN
- It is possible that they may trigger stops or not let your trade reach your profit target levels by manipulating prices
- During news, there will usually be a large amount of slippage; their systems may also lock up or not allow order placing during times of high volatility
- Many of them discourage scalping and put scalpers on "manual execution" which means their orders may not get filled at the price they want
*Above exerpt was taken from Grace Cheng
To get a list of ECN/Market Maker brokers, you can visit the link below :
http://www.goforex.net/forex-broker-list.htm
For me the ideal will be an ECN broker, but like the above points state. You do not get to use integrated chartings for these ecn like luxuries. So this is my setup:
Broker : MBT
Chart : Ninja Trader (any comments?)
Yes, i do have to pay yearly subscription, infact im thinking of purchasing it at full cost. Ninja Charts are difinitely one of the best if not the best platform to work on and the best thing is, they can link to almost any major broker's data feed.
I heard that efxgroup is thinking of integrating MT4 to their datafeed. If this really happens, it will definitely open a new window to FX trading...but till today, there is still no update.
To summarise, ECN or Market Maker like FXoppurtunist states, "its really up to you" ...know your drawbacks and style, read FXoppurtunist thread and try to understand the message.
Always, always remember, NEVER PUT YOUR WHOLE TRADING EQUITY WITH YOUR BROKER COZ YOU WILL NEVER KNOW WHEN ONE DOES A REFCO. Just put enough.
If your doing a mini with 1% leverage. Equity 10000 with 2% risk. Max 4 open position at one time. How much should you have with your broker?
...1200 > 1400Ignored
Quoting toreroDislikedDoes anyone know if EFX is already integrated with MT4? Is anyone using EFX have feedback about their data and platform? I'm interested in getting EFX with MT4 but their website doesn't mention anything about MT4 so not sure if it's ready. Any insight will be greatly appreciated! thanks.Ignored
Quoting jest1081DislikedOk on a more serious note....
If you have read all the posts in 'Broker Discussion', like me, you will be spoilt for choice and become even more confused. But thats what you want to be...coz it will cause you to dig deeper and further look into the most ideal choice thus removing all doubts.
Okay for a start, there are 2 types of FX brokers;
i. ECN Like
ECN brokers pass on prices from several banks and market-makers, as well as from the other traders in the ECN, and display the best bid/ask prices based on these input. This is why sometimes you can get no spread on ECNs, especially in very liquid currency pairs. How do ECNs make money then? They do so by charging you a fixed commission for each transaction.
Pros:
- You can usually get better bid/ask prices since they come from several sources
- Variable spreads between bid and ask may give no spread or tiny spreads at times
- If they are a true ECN, they will not be trading against you but will pass on your orders to a counter-party
- You will be able to offer a price between the bid and ask with a chance of it getting filled
- If they support Stop-Limit orders, you can prevent slippage during news by making sure that your order either gets filled at the price you want or not at all
- Prices may be more volatile which will be better for scalping
Cons:
- Many do not offer integrated charting
- Many do not offer integrated news
- Many of the trading platforms are less user-friendly
- Because of variable spreads (between bid and ask,) it may be more difficult to calculate stop loss and profit target in pips beforehand.
ii. Market Makers
Market-makers "make" or set the prices on their systems based on what they think is best for themselves as the counter-party. This is because every time you sell, they must buy, and when you buy, they must sell to you. This is why they can give you a fixed spread since they are setting both the bid and the ask price. Many of them will then try to "hedge" or "cover" your order by passing it on to someone else; however, some may decide to hold your order, and thus trade against you. This can result in a conflict of interest between the retail trader (you) and the market-maker.
Pros:
- Usually give free charting software and news feed
- Prices can be "smoother" and less volatile than ECN prices (this can be a con if you are scalping or trading very short term)
- Often have a more user-friendly trading and analysis interface
Cons:
- They may trade against you. In that case, there will be a conflict of interest between you and them
- The price they offer you may be worse than what you could get on an ECN
- It is possible that they may trigger stops or not let your trade reach your profit target levels by manipulating prices
- During news, there will usually be a large amount of slippage; their systems may also lock up or not allow order placing during times of high volatility
- Many of them discourage scalping and put scalpers on "manual execution" which means their orders may not get filled at the price they want
*Above exerpt was taken from Grace Cheng
To get a list of ECN/Market Maker brokers, you can visit the link below :
http://www.goforex.net/forex-broker-list.htm
For me the ideal will be an ECN broker, but like the above points state. You do not get to use integrated chartings for these ecn like luxuries. So this is my setup:
Broker : MBT
Chart : Ninja Trader (any comments?)
Yes, i do have to pay yearly subscription, infact im thinking of purchasing it at full cost. Ninja Charts are difinitely one of the best if not the best platform to work on and the best thing is, they can link to almost any major broker's data feed.
I heard that efxgroup is thinking of integrating MT4 to their datafeed. If this really happens, it will definitely open a new window to FX trading...but till today, there is still no update.
To summarise, ECN or Market Maker like FXoppurtunist states, "its really up to you" ...know your drawbacks and style, read FXoppurtunist thread and try to understand the message.
Always, always remember, NEVER PUT YOUR WHOLE TRADING EQUITY WITH YOUR BROKER COZ YOU WILL NEVER KNOW WHEN ONE DOES A REFCO. Just put enough.
If your doing a mini with 1% leverage. Equity 10000 with 2% risk. Max 4 open position at one time. How much should you have with your broker?
...1200 > 1400Ignored