When making the important decision on which Forex broker to use there are several criteria that should be taken into consideration.
It is important to understand what the different types of Forex brokers are.
ECN Forex Broker
ECN stands for electronic communications network. ECNs originated from the equities world and were used in stock trading in the US many are familiar with Archipelago ECN and Island ECN. The same concept is now used in the Forex trading world.
ECN is used to either match traders to each other or to match traders to a market provider. ECN brokers usually require a higher deposit amount in order for you to trade on that network. These amounts are usually between $25,000-$100,000 depending on the particular broker. ECN broker will also probably charge a per million commission rate to the trader.
STP Forex Broker
The STP here stands for straight through processing. These brokers will send the trade data and the account data through to another liquidity source. Clearing and settlement for the trades are done at this liquidity source. The STP Forex broker automates the entire trade process and limits manual intervention.
Market Makers
Market Makers are brokers that act in the capacity of a market maker broadcasts a price to his clients and is willing to assume the risk of the other side of the trade. During normal trading conditions the market maker may give instant execution and execution without any issues by during news events or economic events the broker may slow trading down disable trading or may have the climate have experience other issues.
These are the three different types of brokers and one can determine which one fits their trading needs best.
To learn more please visit www.clmforex.com
Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company
