15 Forex Trading Books Forex Traders Should Read

LiteFinance Global LLC does not provide services to residents of the EEA countries, USA, Israel, Russia, and some other countries. The ECN system is another market participant, an intermediary providing the technological ability to process orders. The broker can create its own ECN system, but then it becomes senseless, as there will be a relatively small number of participants. If there is no DOM of level 2, which can be used to assess supply/demand and the further direction of the price, you do not deal with an ECN broker. Other brokers present themselves as STP, being in fact common Dealing Desks or kitchens.

You can learn more about trading conditions provided for both types of trading accounts here. ECN specification is here, Classic account specification is here. Large aggregators (usually banks) are the other one, a broker is an intermediary for traders, an aggregator is a participant that collects orders from brokers.

Brokersome!

While regulations alone are not enough, they sure do help gain the trust of traders in the market. Exness has top-tier regulations by the FCA in the UK and the CySEC in Cyprus. On top of that, it is regulated by the FSCA in South Africa and the CMA in Kenya. We introduce people to the world of trading currencies, both fiat and crypto, through our non-drowsy educational content and tools.

• Well, the broker has been in business since 2006 which gives it enough experience in the market.
• However, the perception of B-Book brokers having a conflict of interest is a bit narrow and doesn’t capture the whole picture.
• You follow the FXTM traders, known as strategy managers in this case, with the risk management principles and system that align with your expectations.
• Just because a forex broker acts as your counterparty does not mean that they want to see you lose.

The CFTC oversees a wide range of markets; commodities futures and options, foreign exchange, exchange-traded securities, and securities traded in OTC markets all come under the CFTC’s purview. If you live in the United States, you can read our picks for best U.S. forex brokers, featuring likes, dislikes and a bottom-line summary for each broker. Check out some screenshots from CMC Market’s trading platforms, taken by our research team during our product testing. CMC Markets is regulated by some of the most important global financial regulators, including five Tier-1 jurisdictions. CMC Markets is also publicly traded – to become publicly traded, brokers must make numerous public disclosures for compliance purposes.

Horizontal volumes indicator in Forex trading

We constantly check which platforms brokers are integrated with and AvaTrade performs well in this regard, scoring 8/10 in this category. In addition to the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5), AvaTrade offers its own proprietary AvaTradeGO platform, and specialty AvaOptions platform. Get tight spreads, no hidden fees, access to 12,000 instruments and more. Like The New Market Wizards, this book is a collection of interviews with traders that are under the radar and not well-known but that have had great success. The interviews reveal how they achieved their success and are centred around traders who started out small but over time were able to grow their account exponentially.

Therefore, today the pure STP model is rare, although some brokers continue to focus on it. Differently put, a Price Giver places an order in the interbank market indicating the purchase volume in lots and the price at which it is ready to buy/sell the asset. The order enters the Depth of Market, Price Taker accepts the most suitable order for it (at the best price and sufficient volume), entering into a deal with Price Giver. Compared with the volumes of interbank transactions, the internal volumes on the broker’s platform are too small. You only need to click on the button to open an order, and a confirmation of the transaction appears on the screen. Rates, terms, products and services on third-party websites are subject to change without notice.

A-Book vs B-Book Forex brokers: definition, how they work and differences

You might still pay commissions and/or a mark-up on the spread, but this does not mean that your trades will go STP. To explain this in simple terms, if you place a buy order, your broker will be selling to you and vice versa. The primary concern is that these brokers could potentially take advantage of your trading history and pattern and thus make a profit off you.

Instead, the broker earns from the spread or commission, and any risk from the trade is transferred to a third party. As a result, in the A-Book model, the trader’s and broker’s profits and losses with directly cancel each other out. A B-Book Forex broker primarily earns through Non-deliverable Forward Ndf the spread on trades and profits from client losses. In this model, the broker always acts as a counterparty to trades, meaning when a trader loses, the broker profits. This structure is especially lucrative considering 74-89% of retail accounts typically incur losses.

Market Makers in Forex. How do you trade like a market maker?

A Dealing Desk can change the leverage, spread, affect the accuracy of the quotes, artificially increase slippage, manipulate client’s orders. Traders should be wary of brokers that are not regulated by a reputable body, as this can increase the risk of fraud or other unethical behaviour. When a broker uses the A-Book business model, all of its clients’ orders are transmitted directly to the forex liquidity provider, who in turn routes them to the interbank market. Exness operates as a market maker which means it is a B-Book broker. Notably, Exness is one of the most famous brokers in the market today. This broker site allows its traders to dip their foot in a variety of markets.

However, fixed spreads may be slightly higher compared to variable spreads during periods of low volatility. Traders should carefully consider their trading style, frequency, and the currency pairs they trade to determine which spread model suits their needs. This transparent execution model ensures that traders receive fair prices and potentially faster order execution. For example, when a trader places a buy order for a specific currency pair, an A-Book broker will find the best available price from multiple liquidity providers and execute the trade at that price. On the other hand, B-Book brokers execute trades internally, which means they act as the counterparty to their clients’ trades. While this may result in quicker execution speed, as the broker doesn’t have to rely on external liquidity providers, it also introduces the possibility of slippage or requotes.

Brokers considered to be of higher quality in the Forex trading industry, such as Pepperstone and IC Markets, often favour the A-Book model. In other words, even if the trade opened by the trader goes into profit, causing a loss for the broker, the broker will make up the loss with the trade he opened with his liquidity provider. A B-Book broker, also referred to as a Market Maker broker, prefers this model because it is often more profitable than only collecting spreads markup or commissions, like in the A-Book model. While this might be the case, there are some advantages that a B book forex broker has to offer. Even when liquidity is low, you get a good execution of orders because your broker acts as the market maker. Since price is what profits and losses are based on, it is the only thing that matters.

Traders who have small deposits but trade with high leverage are riskier and therefore such trades see B book execution. IG offers a diverse range of proprietary trading platforms (IG Trading Platform, L2 Dealer, ProRealTime) which are all robust and highly suitable for experienced traders. You can also use MetaTrader 4 if you’re more accustomed to this platform. Of IG’s retail investor accounts, its CFD account has reasonably competitive spreads from our testing of UAE-regulated brokers. Spreads are 1.13 pips for EUR/USD, 1.01 for AUD/USD and 1.12 for USD/JPY however we thought 1.66 pips for GBP/USD and 1.98 pips for USD/CAD was a bit high. Simply put, IG is a well-regulated and highly trusted forex broker.

A-Book Vs B-Book Brokers

The trading platforms available to use include MetaTrader 4, MetaTrader 5, and WebTrader. These offer traders fast order execution with 99.35% of orders executed in under 1 second. OANDA is a market maker broker that offers financial services since 1997. In the US, this is one of the top brokers offering over 68 different currency pairs to trade.

– Good For Fixed Spreads

Market makers are brokers that create a market for their clients whereas No Dealing Desk brokers route orders to liquidity providers including banks and other financial institutions. At 91 pages, this is a short forex trading book, introducing traders to forex and how the market operates. It also provides practical tips on selecting a forex broker, how to place trades and basic strategies.