Which type of broker should I choose? Trading desk broker? Still no trading desk broker?
It all depends on you! One type of broker is no better than the other because it will depend on your trader type.
It is up to you to decide whether you need a tighter spread, but instead pay a commission for each transaction, rather than a wider spread and commission.
Usually, day traders and scalpers are more inclined to adopt smaller spreads because the market needs less expenses to cover the transaction costs, so it is easier to get a meager profit.
At the same time, for long-term fluctuations or position traders, the broader spreads are often negligible.
To make your decision easier, here is a summary of the main differences between market makers, STP brokers and STP + ECN brokers:
(MARKET MAKER) NO DEALING DESK (STP) NO DEALING DESK (STP+ECN)
Fixed Spreads Most have variable spreads Variable spreads or commission fees
Take the opposite Simply a bridge between client A bridge between client and liquidity
side of your trade and liquidity provider and other participants
Artificial quotes Prices come from Prices come from liquidity providers
liquidity providers and other ECN participants
Orders are filled by
broker on a discretionary Automatic execution, Automatic, no re-quotes
basis no re-quotes
Brokers are not evil… most of them are not!
Contrary to what you read elsewhere, forex brokers are really not trying to get you.
They want to do business with you, not let you lose your job! Think about it, if you lose all the money in the transaction, they will also lose customers.
The ideal client for trading desktop brokers is a person who is more or less balanced. In other words, the customer neither wins nor loses.
In this way, the broker makes money on the client’s transaction, but at the same time, the customer stays in the game by not bragging about his account. In essence, brokers want their customers to continue to come back more (transactions)!