Many beginners hardly know the forex market and 15 days are already opening its first investment accounts in Forex Broker. How do they choose these brokers? What are the criteria? The fact is that these criteria are the most possible surface, such as ease in deposits by credit card or the amount of the initial deposit bonus, which can reach 100%.

There are basically two types of forex brokers in the market. These two I'll explain quickly here. We know there are brokers "Market makers" and "ECN / STP." What you need to understand is that both want to make money from you. This is completely normal because they are companies, and profits is what businesses want.


Up to this point everything is perfectly normal. Only not. Brokers Market Makers "twist" so you have your operation at a loss. Because? For his order, in fact, it is not in the "market." Your order is on the operating table this broker, known as Dealing Desk.

Brokers Forex Market Makers

To understand this practice Brokers "Market Makers", you must first know one fact: these brokerages your order is not sent to the main provider of liquidity in the interbank market. Your order is negotiated directly with the brokerage itself. She eventually becomes the other hand, because someone will have to cover the amounts involved.

When there is the period before the launch of a news "bombastic", many orders are placed by many traders. And when these orders are placed in one direction, buying or selling, the broker does not have to cover this huge amount of God customer margin, so some go so far as to reject certain orders, causing some of its customers are without entering in the market.

What you need to understand about the Brokers Market Makers is: your profit is the loss of them, and vice versa.

But do not get discouraged. Amazingly, most of the brokers commonly known as Market Makers is regulated and supervised by leading market control bodies on the planet.

Since we understand some of the behavior of Brokers Market Makers, let's not waste too much time trying to understand the ECN broker / STP, because the operation of these brokers is the way that all investors expect. You place your order and the purpose of your broker is throw it in the liquidity providers in the interbank market. And if you win or lose is your problem, not the Broker as it will earn commissions or spread's.

The prices you see on your computer screen are actually the price of liquidity providers, which in the case of Market Makers broker may be different showing only the prices that your Broker wants to show.

Conclusion

The fact is that it is logical that the brokers want to make money. In the case of Market Makers, who are literally market makers the damage you take will profit them but we have to see that this term "Market Maker" is a play of market of Brokers who do not work that way. The vast majority of forex brokers do it, and like it or not, are the brokers that provide greater facilities for its customers.

Maybe in the future we will Brokers with similar systems with ECN or STP, which would be the maximum. But until then, most traders, especially beginners, will have to settle for the cost / benefit and have small accounts for investments. Already experienced traders and "bullet in the needle" should seek brokers with healthier practices.