In this article, we are planning to talk about market makers, who typically refer to themselves as retail brokers. They simply give traders from home or those with a trading platform that usually trade amounts less than millions of dollars per day.
Many of these offers are rather actual but some can be somewhat confusing and that is where new traders get stuck. Hence it is the objective of this short article to funnel out the bad truth about market maker /retail forex agents.
Market makers defined
The term ‘ not an illegal one; although market maker’ is rather a scary one. What this means is that the Forex broker (the market maker) can make its market. It does that were ask and the bid can be manipulated for their financial advantage by setting your order in its marketplace. That is, should you put them in an excessive amount of risk, they trade against you. They would not be capable of getting this done as they have no control there if your order was put into the market that is open. So, it pays to be a bit cautious because this ‘lousy play’ just isn’t prohibited, when signing up to a brand new trading account.
Commission free trading explained
The ones that don’t bill commission to make a profit from manipulating the bid and ask prices. When they didn’t do that they’d simply not make a profit. Therefore, while it could seem that trading is commission free, charges and exploitation are being created and undertaken elsewhere to cover the losses of not charging a commission.
It is not unlikely that your broker is a market maker if you have experienced a market price freeze throughout a trading session. Price freeze is literally a stage at which you need to enter the market but the trading platform either ‘freezes’ and does not let you enter or you get a very long pause where the agent is searching to find the best cost (for them) to enter the market. The time you filled, it’s probably too late. You aren’t trading in the open market if you might have experienced some of the above. In the open market, you’re in a position to enter and depart if you desire. The broker is unfair by making you wait or just not allowing you to enter or depart.