Hi,
That's completely up to you because one type of broker isn't better than the other because it will all depend on the type of trader you are. Usually, day traders and scalpers prefer the tighter spreads because it is easier to take small profits as the market needs less ground to cover to get over transaction costs.
Meanwhile, wider spreads tend to be insignificant to longer term swing or position traders.
To make your decision much easier, here is a summary of the major difference between Market Makers, STP brokers and STP+ECN brokers:
That's completely up to you because one type of broker isn't better than the other because it will all depend on the type of trader you are. Usually, day traders and scalpers prefer the tighter spreads because it is easier to take small profits as the market needs less ground to cover to get over transaction costs.
Meanwhile, wider spreads tend to be insignificant to longer term swing or position traders.
To make your decision much easier, here is a summary of the major difference between Market Makers, STP brokers and STP+ECN brokers:
| Dealing Desk (Market Maker) | No Dealing Desk (STP) | No Dealing Desk (STP+ECN) |
|---|---|---|
| Fixed Spreads | Most have variable spreads | Variable spreads or commission fees |
| Take the opposite side of your trade | Simply a bridge between client and liquidity provider | A bridge between client and liquidity provider and other participants |
| Artificial quotes | Prices come from liquidity providers | Prices come from liquidity providers and other ECN particpants |
| Orders are filled by broker on a discretionary basis | Automatic execution, no re-quotes | Automatic, no re-quotes |
| Displays the Depth of Market (DOM) or liquidity information |
No comments:
Post a Comment