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U.S. forex traders love IG Markets or FOREX.com as the best market maker forex brokers.
Market maker forex brokers act as dealers who create a market for their clients, providing liquidity by offering buy and sell prices at all times. The market marker mechanism contrasts with Electronic Communication Network (ECN) brokers, who connect traders directly with liquidity providers.
Here, Benzinga reviews the top five list of market maker brokers and why you should consider using them.
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5 Best Market Maker Forex Brokers
Here are the best five forex market maker brokers worth considering
- Best Overall: IG Markets
- Best for Trading Platform: Plus500
- Best for Beginners: eToro
- Best for Research and Education: FOREX.com
- Best for Competitive Spread: XM
1. Best for Overall: IG Markets
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securely through IG Markets’s
website
IG is a comprehensive forex broker that offers full access to the currency market and support for over 80 currency pairs. The broker only offers forex trading to its U.S.-based customers, the brokerage does it spectacularly well. Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new forex traders and those who prefer a more streamlined interface.
Best For
- New forex traders who are still learning the ropes
- Traders who prefer a simple, clean interface
- Forex traders who trade primarily on a tablet
- Easy-to-navigate platform is easy for beginners to master
- Mobile and tablet platforms offer full functionality of the desktop version
- Margin rates are easy to understand and affordable
- Access to over 80 currency pairs
- U.S. traders can currently only trade forex
- Customer service options are lacking
- No 2-factor authentication on mobile
IG is a leading global market maker forex broker that provides a wide range of excellent trading tools, competitive spreads and an extensive range of educational resources. It supports the MetaTrader 4 platform and its proprietary web-based trading platform. IG’s desktop forex trading platform is intuitive and easy to use, allowing first-timers to quickly open an account and start trading.
IG offers spreads starting as low as 0.8 pips on some currency pairs and leverage up to 400:1, making it an attractive option for traders looking to maximize their trading potential. The minimum deposit for a standard account is $250.
Pros
- Wide range of tradable instruments
- Strong regulation by multiple top-tier authorities
- Competitive spreads
- User-friendly platform
Cons
- Subpar customer support
- Offers only forex trading for U.S. clients
- High account minimum deposit requirement
2. Best for Trading Platform: Plus500
get started
securely through Plus500’s
website
86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Plus500 is a European derivatives broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments.
Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.
Best For
- Traders looking for a smooth mobile experience
- Great mobile app
- Low spreads and commissions
- Unlimited demo account
- Only derivatives are available
- Not open to U.S. residents
Plus500 is a well-regulated broker offering a user-friendly, proprietary trading platform with advanced features, making it suitable for beginners and experienced traders. The platform is also available as a mobile app for Android and iOS devices.
Plus500 offers low minimum spreads, which start at just 0.8 pips. It also features low minimum deposit requirements at $100 for most account types, making the broker accessible to traders at all levels.
Plus500 helps traders amplify their profits with leverage of up to 1:30.
Pros
- Unlimited demo account
- Excellent mobile trading app
- Competitive spread
Cons
- Not available for U.S. residents
- Limited educational resources
3. Best for Beginners: eToro
get started
securely through eToro’s
website
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
Best For
- International Forex/CFD Traders
- New cryptocurrency traders looking for an easy-to-use platform
- Traders who want to buy and sell cryptocurrencies on-the-go
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
eToro is known for its social trading features, allowing traders to follow and copy the trades of other successful traders. The platform provides an easy-to-use trading platform, strong customer support and a wide range of educational resources, making it an excellent choice for beginners, although it may not be the best choice for advanced traders.
Traders can get leverage of up to 1:50 for forex and low spreads starting from 0.75 pips. The minimum deposit requirement is also relatively low, at just $50.
Pros
- Wide range of educational resources
- Low spreads and minimum deposit requirements
- Social copy trading features
Cons
- No support for scalping
- Inactivity fee
- Comparatively limited trading instruments
4. Best for Research and Education: FOREX.com
get started
securely through FOREX.com’s
website
FOREX.com is a one-stop shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker.
Best For
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
- Cannot buy and sell other securities (like stocks and bonds)
FOREX.com is a well-regulated forex broker that excels in research and education, providing an extensive library of educational resources, including articles, webinars and video tutorials.
FOREX.com offers tight spreads on over 80 currency pairs, as low as 0.2 pips for commission accounts. In standard accounts, the minimum spread tends to hover around 1.0 pips, depending on the specific currency pairs. It helps traders boost their profits with up to 50:1 leverage on major forex pairs and up to 20:1 on minor pairs. You can open a FOREX.com account with as little as $100 or equivalent in your local currency.
Pros
- Vast selection of educational and research resources
- Access to over 80 currency pairs
- In-built TradingView charts
Cons
- Limited product portfolio
- No account protection for U.S. users
5. Best for Competitive Spread: XM
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XM is a market maker forex broker known for its competitive spreads, making it an attractive choice for cost-conscious traders. The platform supports MetaTrader 4 and MetaTrader 5 trading platforms, providing traders with a range of powerful trading tools and features. XM also offers extensive educational resources, including webinars, video tutorials and market analysis.
Starting at 0.6 pips, XM has one of the lowest minimum spreads of the brokers on this list. The minimum deposit amount required to start trading forex is $5 with leverage of up to 30:1
Pros
- Low minimum spreads
- Wide range of tradable instruments
- Comprehensive educational materials
- Strong regulations
Cons
- Limited product portfolio
- Standard account spreads are higher than the industry average
What are Market Makers?
A market maker is a financial institution or individual that actively buys and sells securities, currencies or other financial assets to provide liquidity to a market. In the forex market, market makers facilitate trading by providing buy and sell quotes for currency pairs and profit from the spread between the bid and ask prices. They play an important role in ensuring that there is always a buyer or seller for a currency pair, even during times of low trading activity.
What’s the Difference Between Market Makers and ECN Brokers?
Market makers act as a counterparty to their clients’ trades, meaning they take the opposite position of their clients. When a client buys a currency pair, the market maker sells that same currency pair and vice versa. Market makers typically offer fixed spreads and can provide liquidity even during low trading volumes.
On the other hand, ECN brokers connect traders directly to the interbank market, where they can trade directly with other market participants. ECN brokers typically offer variable spreads and charge a commission on trades. They provide traders with access to deeper liquidity and potentially tighter spreads, especially during high trading volumes.
Forex traders might choose a market maker if they prefer fixed spreads, want to avoid paying commissions or if they are trading during low trading volumes. Conversely, traders might prefer an ECN broker if they want deeper liquidity, more pricing transparency, potentially tighter spreads and are willing to pay a commission on trades.
Advantages of Market Makers
Market makers offer several advantages to forex traders, including:
- Fixed spreads: This means traders know exactly what they will pay as spread when they enter a trade. This can be beneficial if you want to know your costs upfront.
- Liquidity provision: Market makers provide liquidity to the market, allowing you to buy and sell currencies even during low trading volumes, which makes it ideal for when you need to execute trades quickly.
- Price stability: Market makers stabilize prices by supplying liquidity and taking the opposite side of their client trades, which helps clients avoid sudden price movements.
- Risk management tools: Market makers help traders manage risks and limit losses with risk management tools, such as stop-loss orders and guaranteed stop-loss orders.
Disadvantages of Market Makers
Market makers also have some disadvantages that traders should be aware of, including:
- Conflict of interest: Market makers act as a counterparty to their clients’ trades, which means that they can profit when their clients lose money. This creates a conflict of interest which could impair trust.
- Requotes: Market makers may require requotes when there is a significant change in market conditions or when there is a large order size. This can be frustrating for traders who are trying to execute trades quickly.
- Limited transparency: Market makers do not always provide transparent pricing information, making it difficult for you to know if you are getting a fair price.
Your Forex Success: Choosing the Right Market Maker Broker
The brokers mentioned in this post are some of the best in the industry, offering competitive spreads, reliable execution and a range of trading platforms to suit different needs. It’s important to do your own research and consider your individual trading goals and preferences before selecting a broker.
Frequently Asked Questions
Who is the biggest forex market maker?
The largest forex market makers are often major banks or financial institutions.
Answer Link
Do market makers make money?
Yes, market makers make money through the difference (or spread) between the bid and ask prices.
Answer Link
Is a market maker a broker?
Yes, a market maker can be a broker that facilitates the buying and selling of currency pairs in the forex market.
Answer Link
The post Best Market Maker Forex Brokers by Anna Yen appeared first on Benzinga. Visit Benzinga to get more great content like this.
