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Add our tools to your site. Glossary Glossary-A Glossary-B Glossary-C Glossary-D Glossary-E Glossary-F Glossary-G Glossary-H Glossary-I Glossary-J Glossary-K Glossary-L Glossary-M Glossary-N Glossary-O Glossary-P Glossary-Q Glossary-R Glossary-S Glossary-T Glossary-U Glossary-V Glossary-W Glossary-X Glossary-Y Glossary-Z School Home Introduction to Forex What is Forex?

FX Advantages Over Stocks and Futures Reflections of a Trader in the World of Stocks Reflections of a Trader in the World of Commodities Reflections of a Trader in the World of Options What do I need to get started? Forex Basics Currency Pairs Pips and Profits Transactions Costs - Spreads and Commissions Overnight Interest, Rollover or Swap Rate Leverage, Lots and Margin Trade Order Types Chart Types Market Hours Best Hours, Days and Months to Trade Currency Pair Correlations Risk and Money Management Caution!

Market Maker with a Dealing Desk Two Non-Dealing Desk NDD Broker Types: STP and ECN Forex Regulation in the USA NFA Regulated US Brokers Three Popular Non-US Regulated Jurisdictions: Britain, Switzerland and Australia Easy Account Opening and Funding Methods Benefits of Higher Leverage Benefits of Micro Lot Trading Broker Custom Service Decent Trading Platform and Software Example of Narrowing Down a Broker Types of Trading Technical Vs Fundamental Analysis Trading Styles: Day, Swing, Position Scalping Optimal Scenarios for Scalping Grid Trading: Pure and Modified Martingale Trading: The King of Currency Flows Business Cycles and the Relationship to Interest Rates Central Bankers Risk Aversion: The Goliath of Price Movement Intermarket Correlations US Dollar Fundamentals US Dollar Overview: Declining Internally and Internationally Interest Rates: Ultra-loose 29 Year Downward Trajectory Fed Money Creation: Hyper-Active and Inflationary Inflation: Cumulatively Creeping and Leaping Upwards US Debt: Enormous and Destructive to US Economy and Dollar US Trade Imbalances: Optimization of Setup Strategy Design: The Entry Technique Optional Strategy Design: Money Management BackTesting Optimization Steps to Minimize Overoptimization MQL4 Guide to Building an Expert Advisor Introduction Basic Concepts Simple Logical Operators Basic Structure of an EA Basic EA: MA Cross Working with Price Data Order Counting Functions Retrieving Order Information with the OrderSelect Function Market Orders with the OrderSend Function Pending Orders with the OrderSend Function Closing Orders with the OrderClose Function or Custom Close Function Constructing Trade Conditions Building Strategy Conditions with Indicators Building Strategy Conditions with Oscillators Preparing Custom Indicators for Strategy Deployment: Coverting into iCustom Functions Building Strategies with Custom Indicators and the iCustom Function Example: NonLagMA Using Trend Filters to Enhance Strategies Money Management: Lot Sizing TrailingStop with Profit Threshold Auto Define Slippage and Point Values for 5-Digit Brokers Enter on Open Bar Multi-Session Time Filter with Auto-GMT Offset Trading Days Filter, with NFP and Holidays.

Show Forex Dictionary links. Still Dominant Broker Execution Type: Market Maker with Dealing Desk. The National Futures Association says it will begin analyzing trades executed by its 16 member forex firms. This would indicate a firm may be violating NFA rules mandating fair business practices, says spokesman Larry Dykeman. The group can then assess fines, and in some cases may suspend or expel a firm from membership in the organization.

The plugin was configured to accept client orders when slippage moves unfavorably against them and reject client orders when slippage goes against Gain Capital.

Virtual Dealer plugin and the likes are pure risk management and dealing programs. On the other hand, brokers some would even say that most brokers exploit the configuration of these plugins and set them to only accept orders when the market moves against their clients thus profiting a pip or two against a client in almost every trade.

When you add those pips up you get quite a nice, zero risk, daily profit for the broker.

Market Maker Forex Brokers - List Of Top Market Makers Companies

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You already have an account linked with this E-mail it maybe standard or social login. Please, sign in with it. Please, provide us your e-mail so we can verify your account. Keep me signed in. Market Maker with Dealing Desk It was not so long ago that there was only one type of broker available to retail traders of Forex, and it was a market maker MM with a dealing desk.

Large Forex brokers of today like FXCM came on the scene in , FXDD in , as market makers, and of the hundreds of forex firms that exist today, and the dozens that get born every month, the majority are market makers. Since it still represents a dominant player on the retail Forex scene, it is best to understand what this broker is, along with some of its intrinsic and historical pros and cons, before we discuss its newer alternatives, STP and ECN brokers, in the following article.

Market Maker "makes" the market As their name suggests, the MM broker controls or "makes" the market, and you buy and sell from them, not the global currency market.

This broker takes multiple prices from different liquidity providers usually large banks and decides which combination suits them, and then they add a pip or 4 to the spread and pass it along to the retail FX trader. Because they are choosing different combinations of prices and adding their spread to it, they are making a market. They create the bid and ask prices you see, and while these prices do reflect the prices of the global currency market, the prices can be manipulated at different times to different degrees, usually in their favor.

Think of the movie The Matrix: I don't want to sound too conspiratorial, however; without the greed and ingenuity of these MM brokers we would never have been able to play in this big boy arena.

What do they get out of it, for being so generous to open the doors to us? Market Makers Make Money on Spread Market makers always make money on the spread, the ask price minus the bid price.

The banks themselves usually have a small spread built into the currency quotes, and usually a forex broker will add a mark-up to this spread as a way of earning money from us. But since a MM broker does not route client orders to the banks as would a STP or ECN, it gets to keep most of the spread for themselves. How does a market maker determine the spread they deliver to us? They will markup the average spread discovered in the interbank market to a point that maximizes their own profit while still being competitive with the rest of the retail forex market.

Before , when the retail forex market was still in its infancy, relatively speaking, MM brokers could easily get away with fattening up the currency quotes to times what they would see at the interbank rate , depending on the currency. Thus, if the typical bank spread on EURUSD is 0.

After , when the numbers of retail forex brokers started to climb into the hundreds, with many of the newcomers trying to bring in clients by offering tighter spreads, there began a gradual tightening of the spreads across the board. Spread competition amongst retail brokers has dramatically lowered spread costs for us, while MM brokers are still able to profit handsomely. Today the typical MM broker may not be able to get away with a times spread fattening, but they can still get away with a 1.

It is better now that spreads are lower by half than what they were a few years ago, but they can still go much lower. If your currency trade goes in your direction, and you make money, your broker has to pay you from their pocket; if the trade goes against you, and you lose money, your loss is their profit. Now here comes the crux: How to Differentiate Winners from Losers: Client Profiling Taking the opposite side of client order transaction is the MM's dealing desk, which is able to profile their clients.

They can offset the risk by putting your trade through their name onto the Interbank market to reduce the risk and protect their net exposure. They can flag your account and IP address, and engage in a number of different dirty tricks widening spread, slowing or freezing executions, and stop hunting to make you lose more often, as we shall explore. We will examine the possible cheating tactics of MM brokers below. How to Tilt Winning Odds in their Favor: MM Rules and Manipulations Below are some of the options available to market makers to tilt the winning odds in their favor.

MM Broker Tactics Description Dealer or Virtual Dealer Plugin VDP 1. Forbid certain types of trading particularly scalping and arbitrage and traders particularly winners.