Nowadays, in a modern world including the developing trading industry, It is okay to be more sensitive at the same time be more wise in knowing the important of what the market maker and the ECN/STP brokerage system are. It’s like you’re choosing the best internet provider with high connectivity, otherwise, most of the traders must know how to choose the best, reliable, and a good broker especially if its involved online broker.
Knowing the differences between the true and false Electronic Communications Network/Straight Through Processing is not hard to recognize. However, there are some important signs that you need to recognize and studying to locate the true broker.
The False brokers are offering an impossible low spreads to attract more traders. And this is usually happens because of their liquidity providers are controlling the situation. Few of them are offering a zero spread. ON THE OTHER HAND, the true broker has no control on the spread that they have offered.
And also, they can’t take it below the amount they have offered. The commission is the only one method by which the brokers have received their money.
Any of the brokers that are offering a swap-free account is not a true broker, because most of the provider will have to charge for the swap account. This is one of the best way to identify which of them are true and a false. Take Note that the different liquidity providers are charging different swap amounts.
A true provider and a broker never supports the micro-sized lots. So, if you have any broker that you have encountered and offering micro-sized lots are a false brokers.
When identifying by which of them are true when a strong liquidity providers offer a leverage maximum of 100:1. Otherwise, any of them, the brokers, are offering more leverage is a false broker. BUT, bear in your minds that any of the broker that changes the leverage is a false broker and offering a lower leverage on weekends.
True brokers, the traders can use the scalping techniques and the robots to close their positions because they don’t care how much money the trader makes. ON THE OTHER HAND, the false broker do not allow the traders to use the scalping techniques.
In order to avoid being scammed, you need to check first especially if they’re offering high bonuses. Well, the bonuses are another important factor that recognized as a true broker from a false one.
NEGATIVE BALANCE PROTECTION
Most of the true brokers are connected to not just only one liquidity provider but many more. Choosing the best one that is offering the best terms and the order is routed automatically to the specific provider. And, this will be the service for the trader.