HomeDaily ResultsMegadroid Results: Wed 21st Sep 2011*


Megadroid Results: Wed 21st Sep 2011* — 7 Comments

  1. Richard,

    I recently come across an ECN broker called ThinkForex. Do you think Megadroid will be more profitable with an ECN broker rather than a market maker like IBFX?

  2. Hi Ling,

    ALL MT4 brokers are Market Makers.

    Remember, when the MT4 brokers say “ECN”, what they really mean is they are using “Market Execution” instead of “Instant Execution” on their MT4 platform i.e. they’ve removed any slippage control. So you won’t get requotes, but the downside is your orders can be slipped significantly. (see MT4 Brokers – Instant Execution Vs Market Execution)

    There is no exchange in spot forex, so the term “ECN” is very misleading IMO and more of a marketing gimmick. A term like ECN applies to a trading platform that connects to a real exchange such as NASDAQ, NYE, or futures exchanges. In this situation there is a common market place, and the brokers just facilitate the trade – it doesn’t matter what broker platform you use, the level 2, trading volume, bid and ask prices will be the same. By contrast, spot Fx is an artificial market place where the trades are matched against each other on the Market Makers computer. There’s no real exchange. Market Makers are free to adjust spreads and prices as they choose. The Market Maker function is often outsourced by the MT4 broker.


    I have no personal experience with that broker. You’ll need to do some background checks on them to make sure your funds are safe i.e. do some background checks on the companies owners, make sure they’re regulated and haven’t had any recent issues with the authorities, find out how long they’ve been in business for, make sure they have a real physical address (and view with Google Maps) that isn’t located in some off-shore tax haven etc etc.

    Assuming they pass those Safety Checks, the next step is the trade a small amount in a small account, and compare the performance to the other brokers.

    That would be my approach.

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