MM or ECN brokers?

If you type "forex brokers" on google you can find a lot of small brokers that tell you they can make you rich by trading the currencies. More beginner start theirs trading carrer opening a demo account with such brokers, believing they are the best around...

High equity traders and experienced traders know that there are some "elite" brokers that can offer a saver service: true ECN brokers.

This type of brokers are much more safer than MM because they can offer you the best spreads from central banks, the same that market makers brokers get!

Anyway there are some more reason to choose a ECN, and I'm going now to show you whitch they are and why I prefer them:

1) Market Makers brokers sometimes have interest in make you lose money, with direct or undirect methods. This is not a proof of theirs bad service, but I think that if there's only one single reason to steal your money the system isn't enought save, even if my broker would be regulated by NFA. MM earn money from spreads & market manipulations, and this can really hurt you.

MM make money by:
- Spreads difference from central banks* (see below)
- Internal spreads difference** (see below)
- Interest on client deposit
- Losses on client's trades that were never offset

So MM can manipulate the market you "see" to match theirs spreads difference, or in the best case they can "simply" reject orders, widing spreads or create lags in according to theirs interest.

2) True ECN brokers doesn't have any interest in make you lose money, because they offer you the same spreads that normal MM take from central banks. There are some ECN brokers that doesn't make you pay a spread, but only a commission for evey trade.

They make money from:
- Commissions on every orders
- Interest on client deposits

Those brokers doesn't have any interest in offering a bad service or make you lose money because the more you earn, the more interest they have on your account, and they don't manipulate the market because the do not have any spread commission.
ECN are open only for high equity traders (but now you can get it with just some thousand of dollars...), don't you ever asked why?

True ECN requires higher minimum deposit, but they can offer a save broker system for those that want to sleep good at night. MM sometimes can be happy if you get a "bad service" or if you lose money. ECN are happy only if you keep to pay commission and yes, they are much more happy if you grow your account up... because more equity = more trades or more lots = more commissions every trade.

Don't forget that scalpers can only trade with an ECN broker or a direct and personal central banks connection, because MM are used to offer higher spreads and slower trades exsecutions.

* = The difference between the spread the broker quotes to clients and the spread the broker receives from the banks they offset from. If the broker is unable to match a buyer and seller internally, the broker will, after the positions become sufficiently large, offset with larger banks that quote them cheaper spreads.

** = If the spread is 3 pips, and the broker is able to match a buyer and a seller internally, they collect 3 pips.