You Can be a Successful Forex Trader

The Different Types of Forex Brokers

"Not all Forex brokers are the same, there are some major differences on how each type of broker executes trades, this can have a major impact on your success or failure as a trader...pick the right type of broker.

Types of Forex Brokers

Dealing Desk or DD Brokers
Forex brokers that route orders through the Dealing Desk and quote a fixed spread. This type of dealer makes money thru the spread and by taking positions against the client. A Dealing Desk Forex acts as a Market Maker where they create the market for traders. When a trader decides to sell his position, they will buy it from him and when that person decides to buy the DD will sell that position. That is they always take the opposite side of the trade and create the market. The trader never sees the actual market quotes which lets the Dealing Desk brokers manipulate the quotes to wherever they need to complete the client order. Basically a dealing desk provides pricing along with liquidity and makes trades.
To list just a few of the many Dealing Desk Brokers:
10PIPS, EXNESS, Finexo Global Investments, Ava FX, TFIFX, LiteForex, Master Forex, InstaForex, Forex WebTrader, Finotec, BTrader, Forex Place (4XP), DfxTrade, Financial Pacific and WSD Global Markets.
The No Dealing Desk brokers are either STP or ECN+STP.

Forex STP Broker
STP is short for Straight Through Processing where the Forex brokers send orders from customers directly to liquidity providers. Liquidity providers are banks that trade on the Interbank. An STP brokers can have one to several liquidity providers. The greater the number of banks that the broker deals with the more liquidity is available which results in better order fills for the customers. This allows traders access to the real market where trades are executed instantly with no dealer interaction.

These are some of the Straight Through Processor (STP) brokers with highest user ratings:
Loyal Forex, eToro, Investors Europe, IamFX, JadeFX, Advanced Markets (AMIFX), 2 WayFX, EXTO Capital, 1pipfix, Divisa Capital and PCIFX.

Forex ECN Brokers
Electronic Communications Network or for short ECN. This is an open exchange where the broker provides a market where many market makers, banks and traders enter bids and offers into the network where trades are completed by many providers of liquidity in an electronic trading environment. The trades are completed in the name of the broker so the traders’ identity is never known. A trader can see the best bid and offer prices in addition the market depth which is the total volume available at each strike price. Given the larger market participation the ECN broker provides tighter spreads between the ask and bid price. ECN's will normally charge a nominal fee for offering trades between clients and liquidity providers.

Some of the highly rated ECN Brokers are:
Paragon FX, Enfinium International, FXM Financial Group, Broco, MB Trading, FXOpen and Equilor Trader.

Well rated brokers that offer both STP and ECN are Black Stone, WSD Global Markets, Persepolis Capital Management, FXPRIMUS, FXBEST, SmartTradeFX, FxCompany and swiss pb.

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