There are many challenges faced by profitable Forex traders, that all traders should consider when choosing their ideal broker for their investments.
As an estimated 85% of retail Forex brokers are Dealing Desk brokers (market makers), profitable traders are at an extreme disadvantage due to the fact this broker model makes money when clients lose and lose money when client’s win.
The most common trading strategies to be affected the most are Scalpers, News Traders and Day Traders, and the reason is because these strategies can be very profitable, and executed by trading robots (EA’s), meaning that any trader can make profits trading the Forex markets.
When an EA or manual trading strategy is profitable, a dealing desk broker losses money, and can often implement restrictions to ensure that the trader’s profit is limited, limit the ability to trade using these strategies or even disqualify the trader completely.
Why you should trade with STP and ECN brokers?
To combat this, profitable Forex traders choose to trade at STP/DMA brokers as there are no conflicts of interest.
STP brokers make money on the spread or ECN commissions only, and do not make money on client’s losses, giving traders a level playing field and a fair chance in the markets.
Below are some of the key facts about trading with a True STP Broker:
Traders are placed with liquidity providers, often tier-1 banks and ECN’s to ensure no dealing or intervention on your trades.
Identifying an STP broker can be tricky, look for 5-digit pricing, market execution and variable spreads.
STP brokers offer neutral prices that mirror the global (real) market conditions.
You will benefit from more competitive pricing (tighter spreads), no re-quotes and price improvements (positive slippage).
There will be no restrictions or limitations for scalping, hedging, news trading and HFT’s.
STP (DMA or ECN) brokers have no conflicts of interest with their client’s trading activity.
You can be confident that your trades won’t be manipulated for the broker to have odds stacked in their favour as it would be with a dealing desk broker.
Advanced Forex Trading
Highly sophisticated and profitable trading systems are extremely sensitive to many market aspects.
So anonymous trading highly recommended.
Anonymous trading ensures that the liquidity bank or ECN (execution venue) doesn’t have access to any details about the trader and his/her orders.
This includes protecting how the client is trading (manual or EA), having pending actions hidden (SL/TP/Pending Orders) and of course no history on the trader’s past, profitability or strategy.
In conclusion, there is clear proof that trading with an STP broker is highly beneficial for profitable traders, EAs or strategies.
We would like to invite all interested traders to review the Yadix STP Broker services and benefits to learn more.