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MM vs ECN, one question still not asked
May 02, 2016 at 06:47
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3 Replies
forex_trader_318221
Membro Desde Apr 07, 2016
37 postagens
May 02, 2016 at 06:47
(editado há May 01, 2016 at 23:35)
Hi!
I make some tradings in spot market of bitcoins and learned what means "maker" and "taker" and so I understood the reason of the CFD brokers are called of Market Maker. Isn't because the MM broker are manipulators of price and yes because are act to like maker traders, providing liquidity, and we, the customers, are necessarily the takers. We taker the liquidity of the broker.
This initial consideration is for repudiates the discussion of MM are manipulator/maker of price or not, this is not the focus of this thread.
----
Look this simple comparison
#MM
-- Advantage
----- No comission
----- Orders executed instantly
-- Disadvantage
----- Spread
#ECN
-- Advantage
----- No spread
-- Disadvantage
----- Comission
----- Orders executed no instantly
Now, the question: Orders of buying in a ECN broker can be executed by bid price (buy by bid price means buy cheap = profit) and orders of selling in a ECN broker can be executed by ask price (sell by ask price means sell expensive = profit). So, the profit made due buy by bid price and sell by ask price is sufficient for pay the cost of comission?
Another question is the following: "Joseph and John are customer of X ECN broker and Mary is customer of Y ECN broker. Joseph can make trading directly with John (I have no doubt that, because they are clients of the same X ECN broker) but can Joseph make trading directly with Mary (who is client of another broker)?
I make some tradings in spot market of bitcoins and learned what means "maker" and "taker" and so I understood the reason of the CFD brokers are called of Market Maker. Isn't because the MM broker are manipulators of price and yes because are act to like maker traders, providing liquidity, and we, the customers, are necessarily the takers. We taker the liquidity of the broker.
This initial consideration is for repudiates the discussion of MM are manipulator/maker of price or not, this is not the focus of this thread.
----
Look this simple comparison
#MM
-- Advantage
----- No comission
----- Orders executed instantly
-- Disadvantage
----- Spread
#ECN
-- Advantage
----- No spread
-- Disadvantage
----- Comission
----- Orders executed no instantly
Now, the question: Orders of buying in a ECN broker can be executed by bid price (buy by bid price means buy cheap = profit) and orders of selling in a ECN broker can be executed by ask price (sell by ask price means sell expensive = profit). So, the profit made due buy by bid price and sell by ask price is sufficient for pay the cost of comission?
Another question is the following: "Joseph and John are customer of X ECN broker and Mary is customer of Y ECN broker. Joseph can make trading directly with John (I have no doubt that, because they are clients of the same X ECN broker) but can Joseph make trading directly with Mary (who is client of another broker)?
Membro Desde Feb 22, 2011
4573 postagens
May 02, 2016 at 08:08
Real ECN trades are executed instantly
It is very principle of ECN that there is no dealing desk affecting your trades execution
It is very principle of ECN that there is no dealing desk affecting your trades execution
Membro Desde Aug 17, 2015
20 postagens
May 24, 2016 at 07:08
I think those "Joseph" and "Mary" can probably trade directly with one another, in case X and Y have the same liquidity providers. Or I misunderstand something?
Membro Desde Aug 17, 2021
87 postagens
Nov 13, 2021 at 16:16
Thank you for sharing
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