I am loioking at jumping into this forex dimension with the rest of you. I researched different opportunities and I like the FOREX.com presentation, but I was hoping for some sage advice about whether they're a leader. Would I be plugged in directly with their platform or not? It's a lot to absorb, but I am serious and realistic. Any specific advice is appreciated.
Best to use an ECN forex broker (Interactive brokers or MB trading) than a market maker(FXCM, etc.). The only exception is Oanda which is a market maker. They are very good. An ECN style broker just passes your order onto one of several banks (called liquidity providers) for execution. A market maker style broker trades against your position. ECNs charge you a commission which is always a fraction of a pip. MM do not charge you a commission but instead charge you the spread. What that really means is that MM give you a spread quote that is at least .5 pips wider than the intermarket (Bank dealing) spread. The average MM spread is 1.5 pips wider than the interbank. If you trade long term and liquidy pairs, a MM could be an ok choice. If you trade short term, day trade, or scalp, your best bet is with an ECN or with Oanda.
Thank you, that's what I was wondering, because I saw "market maker" on the forex.com website and from reading a few threads here that sounded like it wasn't the best avenue. I'm just putting the pieces together as I go and trying to read as much as I can. Thanks again.
Oanda have excelent order execution but the REAL spreads are not what they advertise. I suggest using a game account and checking out the min/max phenomenon as it may effect you greatly if you use stop/limits and trade medium term. You might save on the spread but you probably won't get the pips you deserve.
You might have some misunderstanding about spread and the charts. Mid price charts like candlesticks do not show the spread, min/max charts show the spread (the extreme variations in price from bid to ask). The spreads on the current rates window are what you get. Nothing else in there, basic concepts.