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ECN vs Market Maker(MM) Forex Broker

  • #21
  • Feb 29, 2012 1:23am Feb 29, 2012 1:23am
I have been wrestling with this for a while now. I am pretty sure I am with an mm but they claim that they are not. Trading pointis who it is. I have often considered switching but quite frankly I like the fast execution. With an ecn broker will there ever be orders that can't be filled? Also aren't most ecn brokers charging a commission? I also assume that a mm can make plenty of money without resorting to sl hunting etc. If you just assume that 95% of traders are unsuccessful then that would be enough to profit alone. Obviously if you have just a few big players that know what they are doing then that could offset that but I think that they monitor that stuff. Probably they are hedging on successful traders or they are just placing their trades ecn. What do you guys think? Also I think brokers prefer profitable traders because unsuccessful traders disappear after a while (no funds lol) but a successful trader should provide income for a broker for many years to come.
  • #22
  • Aug 24, 2015 11:50am Aug 24, 2015 11:50am
If market makers have conflict of interest with their Traders. why there are still a lot of market maker brokers out there? and why do Traders continue opening account with them?
sdtprojectsphilippines
  • #23
  • Aug 24, 2015 3:56pm Aug 24, 2015 3:56pm
Quoting sdtprojects
If market makers have conflict of interest with their Traders. why there are still a lot of market maker brokers out there? and why do Traders continue opening account with them?
Probably their sign-up bonuses make new(er) traders think they're getting more for nothing. They don't bother to read the small print.
  • #24
  • Edited 8:12pm Aug 24, 2015 7:54pm | Edited 8:12pm
Quoting sdtprojects
If market makers have conflict of interest with their Traders. why there are still a lot of market maker brokers out there? and why do Traders continue opening account with them?
Market maker brokers or what I call casino brokers keep getting opened because it's easy money. They trade against their clients and they win no matter what. If they win, their clients lose, they win. If they don't win and their clients win, they accuse their clients of latency arbitrage and get to keep all their profits and they still end up winning.

Traders continue to open accounts with them because they don't know. More and more people are getting into forex trading thinking they can make money fast. They get a demo and demo for just 2 weeks and see all the money they made in demo and think this is how much they can make in real trading and plus those welcome bonus that those casino brokers dangle in front of them and they get sucked in and open accounts with them.

Seriously casino brokers should be banned. They don't serve any purpose except using people like ATM machines. Their clients are NOT even trading in the foreign exchange market.
Make your losses in demo. Earn your profits live.
  • #25
  • Aug 24, 2015 8:07pm Aug 24, 2015 8:07pm
Quoting bfis108137
I have been wrestling with this for a while now. I am pretty sure I am with an mm but they claim that they are not. Trading pointis who it is. I have often considered switching but quite frankly I like the fast execution. With an ecn broker will there ever be orders that can't be filled? Also aren't most ecn brokers charging a commission? I also assume that a mm can make plenty of money without resorting to sl hunting etc. If you just assume that 95% of traders are unsuccessful then that would be enough to profit alone. Obviously if you have just...
Most of the more known brokers in retail forex are MM brokers that hedge. Some hedge against all clients trades like Oanda and FXCM, some hedge against just the successful traders but trade against the unprofitable ones called B-booking. Why make money from commissions alone when you can make money trading against clients AND the spread when hedging AND commissions. The money there is just too good to pass up. There are only about four as far as I know operate as ECN and then the rest are MM what I call casino brokers like IronFX, Forex.com that just trade against clients and keep all the profits when the traders lose against them and forfeit all the profits from the traders when the traders actually win.
Make your losses in demo. Earn your profits live.
  • #26
  • Aug 25, 2015 2:46am Aug 25, 2015 2:46am
Quoting Forexia
{quote} Market maker brokers or what I call casino brokers keep getting opened because it's easy money. They trade against their clients and they win no matter what. If they win, their clients lose, they win. If they don't win and their clients win, they accuse their clients of latency arbitrage and get to keep all their profits and they still end up winning. Traders continue to open accounts with them because they don't know. More and more people are getting into forex trading thinking they can make money fast. They get a demo and demo for just...
And what you say about bank platforms? They are also MM for clients. But biggest speculative players on FX are using only them)
  • #27
  • Aug 25, 2015 3:48am Aug 25, 2015 3:48am
Quoting M967
{quote} And what you say about bank platforms? They are also MM for clients. But biggest speculative players on FX are using only them)
The banks are the ULTIMATE MM's in the forex market and they are among the worst! They employ pretty much the same dirty tricks that casino brokers at retail level do, requoting, last look etc. Just because they are bigger that does NOT mean they are better. I dunno why people bother to invest with them, for long term maybe.

http://www.financemagnates.com/forex...nc-volatility/

And the regulators are zeroing in on them:

http://www.financemagnates.com/insti...nks-last-look/

http://www.wsj.com/articles/forexs-l...bed-1432768404

So hopefully things will change for the better but still with the broker and the clients' interest not aligned but in fact directly in conflict of each other, I am not sure how much can be improved.
Make your losses in demo. Earn your profits live.
  • #28
  • Aug 25, 2015 3:55am Aug 25, 2015 3:55am
Quoting Forexia
{quote} The banks are the ULTIMATE MM's in the forex market and they are among the worst! They employ pretty much the same dirty tricks that casino brokers at retail level do, requoting, last look etc. Just because they are bigger that does NOT mean they are better. I dunno why people bother to invest with them, for long term maybe. http://www.financemagnates.com/forex...nc-volatility/ And the regulators are zeroing in on them: http://www.financemagnates.com/insti...nks-last-look/...
Assume we're speaking different things. PB Single bank platform has no LL and no requoting. Because 100% execution is critical for big players. Those platforms are relationship business. Of course MM on retail level are pure crocs. What I mean that there're 2 different MMs.
  • #29
  • Aug 25, 2015 4:17am Aug 25, 2015 4:17am
Quoting M967
{quote} Assume we're speaking different things. PB Single bank platform has no LL and no requoting. Because 100% execution is critical for big players. Those platforms are relationship business. Of course MM on retail level are pure crocs. What I mean that there're 2 different MMs.
No MM's are MM's no matter whether it's at institutional level or retail level and no matter the size. Think about it. If they are taking the other side of your transactions, WHY would they want you to win? It's a zero-sum game. You will only win if THEY lose and WHY would they want to lose to let you win?

No I saw what those big banks like Citi offer on their platform for forex trading; it's the same sh1t, huge spread and the same slow speed of execution. Like I said before, as long as their interest is not aligned with ours and are on the opposite side of ours, we shouldn't expect any fair dealing from them. Anything in contrary to that is either delusional or temporary.
Make your losses in demo. Earn your profits live.
  • #30
  • Aug 25, 2015 4:45am Aug 25, 2015 4:45am
Quoting sdtprojects
If market makers have conflict of interest with their Traders. why there are still a lot of market maker brokers out there? and why do Traders continue opening account with them?

Because they don't act as a market makers only. They utilize sophisticated hybrid schemes hedging only successful trades with their LPs. I believe most popular brokers operate in this way.
  • #31
  • Aug 25, 2015 6:48am Aug 25, 2015 6:48am
Quoting Forexia
{quote} No MM's are MM's no matter whether it's at institutional level or retail level and no matter the size. Think about it. If they are taking the other side of your transactions, WHY would they want you to win? It's a zero-sum game. You will only win if THEY lose and WHY would they want to lose to let you win? No I saw what those big banks like Citi offer on their platform for forex trading; it's the same sh1t, huge spread and the same slow speed of execution. Like I said before, as long as their interest is not aligned with ours and are on...
Ok. Let it be, Amen)
  • #32
  • Aug 25, 2015 7:39am Aug 25, 2015 7:39am
Quoting M967
{quote} Assume we're speaking different things. PB Single bank platform has no LL and no requoting. Because 100% execution is critical for big players. Those platforms are relationship business. Of course MM on retail level are pure crocs. What I mean that there're 2 different MMs.

Oh really? Maybe read this then:

https://www.jpmorgan.com/pages/disclosures/fx_notice
  • #33
  • Aug 25, 2015 10:49pm Aug 25, 2015 10:49pm
Quoting sdtprojects
If market makers have conflict of interest with their Traders. why there are still a lot of market maker brokers out there? and why do Traders continue opening account with them?
because ecn brokers will make you lose more. They just relay the conflict of interest but never erase the conflict. Why do not you trade against a market maker directly without paying anything? Because you believe market makers will make you lose. The reality is ecn brokers will make you lose more
  • #34
  • Aug 29, 2015 11:25am Aug 29, 2015 11:25am
Quoting shrike
{quote} Oh really? Maybe read this then: https://www.jpmorgan.com/pages/disclosures/fx_notice
YOU'RE AMAZING! I love how they word of what they did.
  • #35
  • Last Post: Sep 1, 2015 1:29pm Sep 1, 2015 1:29pm
This is very insightful, direct and authoritative. Not something favorable for traders. Big thanks to shrike.
I thought the LP should be regulated some how but apparently not. So all brokers are MM directly or indirectly.
True?

Quoting shrike
{quote} Oh really? Maybe read this then: https://www.jpmorgan.com/pages/disclosures/fx_notice
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