So of course, I can the FPA registry, and when I see people complaining about this broker or that broker is not a true ECN broker, be that as it may, and provide some sort of explanation that makes no sense, I need to speak up. Once and for all, people, here is what ECN means: So how do you know for sure you are on an ECN? How do you know if you are on an ECN that is not a market maker's synthetic market in spite of what I just wrote in the previous sentence? In other words, if your broker always puts your orders on the A-book and sends them to its LPs to fill them, the broker's system will talk to an aggregator and matching engine that facilitates communication between all the IT systems involved using a protocol called FIX sometimes they use a binary protocol like ITCH or OUCH--you can learn all about it here: If this is the case, then your broker should be able to provide you with a full report showing where and when your order was created, and all the processing stages your order went through all the way to when the order was filled, by whom it was filled, how it was filled, and so on.
That is the only way to know your broker is not B-booking you, ie using the market maker model. But there is 1 exception as we just saw with FXCM recently.
For those who don't know, a brief recap: In this case, broker can claim he is not on the other side of the trades, and even produce a report showing this 3rd party as being the LP filling all the client orders. And yet, you are not trading in a real NDD environment; your orders are passed through directly to this 3rd party so technically it is STP but the 3rd party behaves like a market maker! Global Prime in Australia uses the same setup as all client orders go through its parent company, Gleneagle Securities, which is the counterparty to all client orders even though they make a big fuss of claiming that there are very transparent precisely because they will provide you with a FIX report.
You can find this information in their legal documentation, so don't take my word for it. I mention it only to illustrate the point that there is more than 1 broker out there deceiving their clients in this way.
Dukascopy is a hybrid, meaning that the broker will take the other side of some client orders, match some client orders with another client orders aka cross-matching, what MBTrading used to call EXN , and send some client orders STP directly to external LPs even though their software trading infrastructure is designed to behave like an ECN.
Or get even more money and open an account direct with any of the institutional ECNs. Otherwise, the best retail traders can get is STP via a broker licensed to act only as a matched principal or sometimes as an agency broker and also when you check their licence, make sure they are not authorized to trade on their own account, which many are.
So it depends on what you need. Of course, manual trading is also going to be OK. No A-book broker will offer anything higher than So whatever you are told by the And this starts by knowing to ask the right questions. Oct 3, Messages: I've often heard A Book and B Book used. A meaning STP and B meaning keep all trades in house aka bucketshop. I haven't seen much about C Book.
Is that for hybrids of some sort? Perhaps for brokers that keep trades in house and hedge themselves against an outside LP every so often?
Just re-read myself and spotted a few mistakes. Where is the edit button? PM the corrections to AsstMod and he'll do the repairs. Editing only works for a few minutes after you post.
Too many companies blackmailed traders into hiding information. Although the following is sourced from an article on Finance Feeds about the evolution of OTC trading in China and how it is the next frontier given the sheer size of the Chinese market, it contains interesting tidbits that help illuminate what is really going behind the scenes at most retail FX brokerages and product issuers such as CMC Markets among others that is right, CMC is not a broker.
The first thing to understand is that to be allowed to play with the big boys, aka given access to the real market, the gatekeepers have now raised the minimum capital requirements for their clients retail brokers, high net worth individuals, fund managers, etc , capital that is required to receive credit lines that can then be passed on to the broker's clients to trade with leverage. Why is this a problem? The vast majority of small and medium retail brokers will create a synthetic market, ie systematically internalize their client order flow, ie trade against it, ie act as a market maker, and manage client risk this way, fingers crossed that most clients will be losers.
I say 'cross fingers' because their risk management process does not allow them properly hedge those positions in the real SPOT market due to lack of access because the broker itself is too undercapitalized and thus represents too much of a counterparty credit risk in the eyes of the institutions that are supposed to extend credit lines to it. So, I believe it is fair to say that: If you know of any other broker offering true ECN trading conditions, or an ECN venue that onboards retail traders and not only professional or high net worth entities, please let us know.
Would be interesting to find out who else offers ECN trading conditions to the retail crowd. Although ICMarkets is large enough that they could offer real ECN market conditions on cTrader, I am still waiting for the proof that this is the case. Another great read from Finance Feeds: I am striking gold today. Great articles from Finance Feeds: Read on to find out more.
Another must-read for all traders, again from Finance Feeds: Read on and find more here: You must log in or sign up to post here. Share This Page Tweet. What is your trusted broker pomidor , Oct 16, Please advice good forex trading Ruble , Oct 6, Davidofx Oct 10, Hello- Any Good Bitcoin Courses?
Btcbeginner , Oct 5, PruPJ Oct 6, Sive Morten Dec 1, at 5: Sive Morten Nov 24, Sive Morten Nov 17, Peter O Nov 11, Andrew Mitchem Nov 23, Andrew Mitchem Nov 14, Andrew Mitchem Nov 7, Sive Morten Dec 6, at 1: Can not withdraw deposit and profit! Woodychan Dec 6, at 7: Daily economic news digest from Forex. Gap mickvolpe , Feb 9, Oedipean , Feb 7, Georgii Bartenev Dec 6, at 4: Joh Dec 6, at 4: Your name or email address: Do you already have an account? No, create an account now.
Yes, my password is:More...