A forex broker refers to an agent who acts as a relationship between buyers and sellers in the Forex market. Most brokers in the Forex market have large banks that provide it with market prices of various currencies which are then transferred to traders as requests or offer prices. To find out and identify the best forex brokers, it’s good to find out various types of brokers on the market. It may also be important for you to rent or consult with a well-established forex company to guide you in trading. After technology that continues to increase, online forex trading is very common and you can make or lose money in trading through the internet and the worst of all you can scamous. Make sure the first thing you deal with legitimate FOREX companies is established. The existence of four types of brokers are established is the market maker (DD), direct processing brokers (STP), no dealing table brokers (NDD) and electrical communication network brokers (ECN).
Market makers have what is known in the Forex market as a transaction table and that is why they are abbreviated DD. Most traders hold the view that these brokers do not have their interests with the heart because as the name suggests, they (this broker) only makes the market for forex traders. For traders who want to sell, DD brokers buy from them; For traders who want to buy, this broker sells them. These brokers make money with no trading support their clients and through spreads. They have never been on the same trading side with brokers because the main purpose of their intermediaries is to create a market for forex traders. In this case, traders cannot see the actual market price quotes and DD brokers can manipulate offers (ask or offer price) where they produce big profits. Most forex trading experts prevent traders from trade with DD brokers because only brokers benefit from trading in many cases and not traders.
NDD is a broker that deals with the provision of market access between banks without order through the transaction table. This order passes market quotes because they are to traders and have no great intention to produce big profits by manipulating the supply or demand price. This broker gets profit by collecting the trade commission or by increasing the spread so that forex trading is free from any commission. Most NDD brokers are a combination of ECN and STP brokers or the same as STP brokers.
The STP broker sends client orders directly to liquidity providers that banks usually participate in interbank trade. Possible STP brokers at a time and instance only have one provider for liquidity at other times, they may have several. Increasing the number of banks and liquidity in the system means better and more profitable trade for brokers. Traders can indeed access the market and trade without this broker. This broker is preferred by most foreign exchange traders because of transparency and honest in trade.
The ECN broker is considered by most foreign exchange traders and other online forex trading professionals due to their transparency. These brokers allow all Forex trading participants to trade freely by sending competitive offers and bidding to the market. There is free interaction and no interference or liaison one participant with the other. ECN brokers only charge a small fee for their services.