Why the Choice of Forex Broker is Important in Algotrading

The choice of the right forex broker is the basis for successful trading with our trading system.

In order to participate in foreign exchange trade, you require a forex broker, because individual participation on the forex and foreign exchange market is not possible without an exchange agent. There are large differences between individual broker houses with their third party order modules and the traders on the foreign exchange market. The forex broker provides a trader with STP or ECN access to the foreign exchange market.

STP Forex Broker (Straight Through Processing):

With a STP forex broker, your trades/orders will be directly forwarded to the connected liquidity provider. Thus, you receive direct access to the market. At the bank, one speaks of the concept liquidity provider (LP). The spread is at inter-bank level with all STP forex brokers. Some STP forex brokers charge commission. The speed of execution is much higher than by other forex brokers. You are able to participate directly in inter-bank trading. There are, however, STP forex brokers who work without commission, but have set the spread slightly higher. This is no disadvantage for the trader. This can be cheaper for scalpers, the traders who are only in the market for a short time.

 

ECN Forex Broker (Electronic Communication Network):

In a similar fashion to STP forex brokers, your trades will also be transferred directly to the liquidity provider and you are 100% directly in the market. This is also interesting for scalpers, who are only on the market for a short time. The essential difference is that ECN forex brokers can compare the trades/orders of their clients. This brings an additional speed advantage in implementing orders. Like with STP forex brokers, ECN forex brokers give the actual order of customers to the market. These ECN forex brokers share this without commission – this is considerably cheaper for you as a customer and you are also directly active on the foreign exchange market. Further important characteristics that a broker should fulfil: Transparent costs Low marginal requirements in forex (minimum leverage 1:200) Stabile provision of meta-trader 4 with additional mobile platforms Quick implementing of orders Low additional costs, i.e. finance costs and swap costs Hedging possibility EU-Regulation - the well-known: FCA, CySec, Bafin, etc. Established broker with worldwide representative offices Deposit protection No fees for deposit and withdrawal on the trading account Minimum trading volume micro-lots (0.01) as allowed tradable order size If you have further questions about our partner brokers or generally to the choice of your broker, contact us with our contact form. Our team will be in contact with you. test