Market maker and ECN: types of brokers in Forex.

A very important aspect in investing in Forex is the choice of a good broker, because depending on whether we choose a broker or another, we can turn our daily trading into a quiet operation or a real hell.

Differences between Market Maker and ECN

There are 2 types of brokers:" the market maker and the ECN".

On the one hand, brokers Market Maker, or brokers with trading desk, are brokers in which transactions with the purchase and sale of currencies are not made directly on the exchange market, but remain on the work table of the broker.

These brokers make an internal market for their clients, in which all the transactions they make, are married to each other, in fact, the same broker can make counterpart in the operations of its clients. This type of broker, by its way of operating, can create conflicts of interest between the broker and its customers.

The advantages of these types of brokers is that they allow you to open an account with fewer resources, its platforms are easier to use and allow you to do more leverage.

ECN brokers are "no dealing desk" brokers, that is, they allow their clients' orders to interact with one another. They provide a kind of market where they allow all participants: banks, brokers market makers or individual operators to operate against each other by sending very competitive purchase and sale prices within the system.

Participants within this market system get the best quotes available at any given time.

Your profits are always commissions. There is no conflict of interest and participants can operate freely.