Why is Forex Broker Comparison a Must For Any Trader?.
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MultiBank does not allow the manipulation of the system by Arbitrage Trading, and the company reserves the right to correct the trading calculations6.
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Lot Sizes Micro Std Lot. Dukascopy Bank Special Forexlive Offer: ActivTrades Special Forexlive Offer: EightCap Special Forexlive Offer: Royal Special Forexlive Offer: The first step in comparing and evaluating the list of forex brokers is to ensure that you are aware of the various types of brokers and trading accounts that are available to you. Here are some of the major types of financial trading platforms that you will find according to the different market access protocols:.
A dealing desk Forex company is often referred to as a market maker because it has its own dealing desk, trading conditions, and fixed spreads.
The market maker or dealing desk brokers are able to fix their own price in the market, and may go above and beyond the general market price of a specific underlying asset. The price fixing nature of the Market Maker model is why some Forex brokers quote different prices in their trading platforms than the real-time interbank rates that are prevalent in the markets.
Meanwhile, a market maker involves a significant conflict of interest with its clients, as the company may choose to act against its clients. Therefore, unless regulated by reliable authorities, market maker brokers may not be suitable for large traders. No Dealing Desk brokers are able to offer the best prices from the markets by receiving a live feed from several liquidity providers, which keeps the spreads low and competitive. No Dealing Desk trading not only involves competitive spreads, but it also involves the largest liquidity in the market, which is highly suitable for Direct Market Access DMA trading.
A DMA Forex broker, through its partnership with leading liquidity providers, should be able to offer a highly favorable trading environment; however, the spreads and liquidity are never fixed.
In the case of high volatility, the spreads can change their value suddenly, and orders are only filled according to the specific market situation. No Dealing Desk brokers may induce partial fill of orders, and such type of trading can induce large slippages. ECN trading conditions are highly preferred by professional traders and institutional investors, primarily due to the open liquidity and direct market access that does not involve any conflict of interest with the broker.
ECN networks show real-time quotes, orders, and the most competitive spreads in the market, thereby helping traders to reduce their cost of trading. While ECN trading is highly preferred for large traders, there are slight drawbacks to ECN accounts, which includes a commission per trade, partial order fills, and massive slippages.
Most STP Forex brokers try to connect their traders to the interbank liquidity pool by offering direct market access trading, but in a significant majority of STP accounts, the brokers may connect their STP traders to a Market Maker or dealing desk protocol. STP accounts may be suitable for smaller traders, especially since there is a significant lack of slippages or commissions. On the downside, STP trading may involve requotes, price manipulation, high spreads, and brokers may choose to offer a market maker account to its clients — MTF Multilateral Trading Facilities might also be considered as a type of a broker protocol, but this type of exchange activity is not regulated at all.
MTF serves as a self-regulatory exchange for financial instruments, where buyers and sellers use unconventional investment platforms for trading financial products that are usually not available at regulated mainstream exchanges. Besides having a thorough knowledge of the types of brokers and the trading protocols, it is also important to know how to judge them and to tell the difference between the good ones and the bad ones. Our following Forex broker comparison guide can help you to determine the most important factors to distinguish FX brokers from each other.
The origin and the history of a broker help us to see how reputable the company really is, and enables us to learn how this broker has operated in the market over the years. Meanwhile, the country of origin, as well as the jurisdiction where the broker is located also matters due to the regulatory and trading restrictions that are common in certain geographic locations. Citizens of certain countries are prevented from exercising complete freedom on Forex trading, most notably for traders from the US, and such traders cannot use brokers from other specific nations due to legal or regulatory policies.
Therefore, it is essential for traders to particularly careful about the geographic location of a Forex broker while comparing the different options in the market.
Forex trading platforms are a critical component in numerous Forex broker comparisons, and a significant majority of comparison guides will have a dedicated Forex platform comparison and a review section to offer great insights into the platform options. Whether a trader is looking for a browser based platform, or if he wants to adopt a professional approach by downloading a trading software to install on his PC, brokers should always be competitive and innovative in their approach, or else risk losing their intended audience.
These days, Forex trading software is also available for use on mobile devices, and it is likely that traders will all be able to trade on the go through simplified mobile trading apps that are available for most third-party trading platforms and proprietary trading software through the respective mobile app stores. Bonuses may also be considered as one of the striking features that alleviate the status of a company, making a broker different or better than its immediate competitors in the eye of a trader.
One more important thing: For the most recent information please visit the company's site.
Whether a trader is looking for a browser based platform, or if he wants to adopt a professional approach by downloading a trading software to install on his PC, brokers should always be competitive and innovative in their approach, or else risk losing their intended audience.