A large majority of Forex brokers are market makers, meaning they determine prices offered for trading to their clients, and act as counterparties to their clients’ trades.
While many argue this creates a potential conflict of interest, other analysts point out that for some traders, using a market maker can result in a better and less risky trading.
Top Market Maker Forex Brokers List
- FXTM, Best all-around broker with high floating leverage and fast execution.
- FP Markets, ECN trading with leverage up to 1:500.
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
- Eightcap, Competitive pricing + excellent daily videos.
- Plus500, multi-asset and CFD broker.
Best Market maker Brokers Comparison
| | | | | |
Regulators | CMA, FCA, FSC Mauritius, FSCA | ASIC, CMA, CySEC, FSCA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID | ASIC, CySEC, FCA, SCB | ASIC, CySEC, FCA, FMA, FSCA, MAS |
Year Established | 2011 | 2005 | 2006 | 2009 | 2008 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP | Market Maker | ECN/STP, Market Maker | Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.1 pips | 1.2 pips | 0.9 pips | 1.0 pips | 1.3 pips |
Average Trading Cost GBP/USD | 0.2 pips | 1.4 pips | 1.5 pips | 1.2 pips | 1.7 pips |
Average Trading Cost Gold | $0.18 | $0.16 | $0.29 | $0.12 | - |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | Other, MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based+ | MetaTrader 4, MetaTrader 5, Trading View | Proprietary platform, Web-based |
Islamic Account | |||||
Negative Balance Protection | N/A | ||||
| Visit Website | Visit Website | Visit Website | Visit Website | Get Started Visit Website82% of retail CFD accounts lose money |
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFXTM offers Forex traders the MT4/MT5 trading platforms but has also developed its user-friendly mobile app FXTM Trader. The pricing environment for the market maker model starts with spreads from 1.5 pips or $15.00 per 1.0 standard round lot. The minimum deposit requirement is $500 or a currency equivalent. The high-quality price improvement technology can decrease trading fees by an average of $3.00 per round lot.
Besides currency pairs, FXTM offers spot metals, commodity and Index CFDs, cryptocurrency CFDs, equity CFDs, and physical share dealing. It makes FXTM one of the best market maker Forex brokers on my listing.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- Limited choice of commodities
FP Markets
In Summary ECN trading with leverage up to 1:500The market maker model at FP Markets is available for MT4/MT5, which is upgraded by 12 plugins, Trading Central, and Autochartist. Minimum trading fees start from 1.0 pips or $10.00 per 1.0 standard round lot. The well-balanced asset selection includes cryptocurrencies, ETFs, and bonds, while the minimum deposit is $100. Therefore, I consider FP Markets one of the best market maker Forex brokers.
FP Markets offers copy traders the embedded MT4/MT5 solutions, the in-house FP Markets Copy Trading service, fee-based Signal Start, and Myfxbook Autotrade. Micro lot trading from 0.01 lots or 1,000 currency units is also available.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade offers reasonable commission-free Forex costs from 0.9 pips or $9.00 per lot, making it one of the best market maker Forex brokers on my listing. It provides beginners, the primary traders using market makers, with the MT4 Guardian Angel plugin and the fee-based Ava Protect insurance policy protecting against trading losses. AvaTrade is also an excellent choice for copy traders, offering its in-house Ava Social, embedded MT4/MT5 copy trading service, plus DupliTrade and ZuluTrade.
Traders can use the proprietary WebTrader and the mobile app AvaTradeGO, with embedded Trading Central services, or the optimized Ava Option for options trading.
Pros & Cons
- High quality educational offering via AvaAcademy
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
Eightcap
In Summary Competitive pricing + excellent daily videosEightcap offers Capitalise AI, enabling algorithmic trading in a code-free MT4 environment. It lowers the entry bar for algorithmic trading essential for profitable Forex traders. It makes Eightcap one of the best market maker Forex brokers on my listing. The market maker model has reasonable Forex fees from 1.0 pips or $10.00 per 1.0 standard round lot. MT5 traders benefit from the FlashTrader plugin, and news traders get an AI-powered economic calendar.
Social traders can connect to TradingView, where 50M+ peers share and discuss trades. Eightcap also maintains a well-balanced asset selection of liquid assets, including 100+ cryptocurrency CFDs.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
Plus500
In Summary multi-asset and CFD brokerI rank Plus500 among the best market maker CFD brokers on my listing as it has the lowest trading fees. Traders benefit from commission-free Forex spreads starting from 0.6 pips or $6.00 per 1.0 standard round lot, on par with many commission-based ECN/STP/NDD brokers. The well-balanced asset selection includes options, ETFs, and cryptocurrencies. Plus500 offers a user-friendly, web-based proprietary trading platform and mobile app, which includes a sentiment-based indicator.
The high-quality data-driven analytical tool +Insights delivers competent research. Plus500 offers real-time email, SMS, and push notifications based on price alerts, percentage-based hourly and daily price changes, and sentiment changes.
Pros & Cons
- Broad asset selection in equities and options
- Free and unlimited demo account
- Advanced free-of-charge analytical trading tools
- Global and regulated fintech platform
- Sub-standard trading platform without support for automated or social trading
Market Makers Brokers List Comparison
| | | | | |
Regulators | CMA, FCA, FSC Mauritius, FSCA | ASIC, CMA, CySEC, FSCA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID | ASIC, CySEC, FCA, SCB | ASIC, CySEC, FCA, FMA, FSCA, MAS |
Year Established | 2011 | 2005 | 2006 | 2009 | 2008 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP | Market Maker | ECN/STP, Market Maker | Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.1 pips | 1.2 pips | 0.9 pips | 1.0 pips | 1.3 pips |
Average Trading Cost GBP/USD | 0.2 pips | 1.4 pips | 1.5 pips | 1.2 pips | 1.7 pips |
Average Trading Cost Gold | $0.18 | $0.16 | $0.29 | $0.12 | - |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | Other, MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based+ | MetaTrader 4, MetaTrader 5, Trading View | Proprietary platform, Web-based |
Islamic Account | |||||
Negative Balance Protection | N/A | ||||
| Visit Website | Visit Website | Visit Website | Visit Website | Get Started Visit Website82% of retail CFD accounts lose money |
Once you have decided that a market maker Forex broker suits your trading needs, you will have plenty of choices. The most important considerations you should have in making your final choice are the broker’s regulation and reputation, fees, and range of assets offered. The best approach is to make a shortlist based upon these factors then compare our assessments to see what will give you the best deal for your trading style.
Market Makers in Forex Trading
Despite the widely negative portrayal of the market maker broker execution model compared to ECNs, market makers can offer a good deal to many traders. Traders will often find that during more illiquid markets, market makers offer superior spreads, execution, and liquidity to what is offered by ECN brokers.
Market maker platforms do not charge commissions but function as wholesalers, earning revenue via mark-up on raw market spreads which they get from their liquidity providers, who are larger (usually non-retail) brokerages or banks. For example, if the EUR/USD trades with a 0-pip spread on an ECN (electronic communications network), accessible via ECN brokers which charge volume-based commissions, a market maker might display the same with a mark-up of 0.8 pips.
Since market makers brokers have their own inventory of assets, they can also directly profit from the losses of their traders. Market makers typically operate two order books, often known as the A and B books. Traders with profitable records are assigned into the A book, with all others placed in the B book.
There is a strong reason why it is important to be very careful in selecting a market maker Forex broker, and to use a reputable listing such as ours as a guide – the execution model can be ripe for abuse in the hands of unregulated or unscrupulous brokers. Sharp practices to watch out for include stop-loss hunting, which generates premature trading losses by spiking spreads artificially, typically using a news event as cover for plausible denial. Traders should ensure that market maker brokers offer reasonable mark-ups. The best market maker Forex brokers will quote EUR/USD spreads ranging between 0.4 pips and 0.8 pips during the London/New York overall, with all major currency pairs below 1.2 pips and most minors below 2.2 pips.
What are the Differences Between Market Maker and ECN Brokers?
- Market makers are wholesalers, who often operate without covering their exposure to their clients. ECN brokers are essentially exchanges, matching liquidity providers to their clients in return for a commission per trade.
- Market makers often charge only spread and no commission. ECNs almost always charge commission.
- Spreads are often more fixed and higher at market maker brokers, while ECNs offer spreads that can sometimes fall to zero or even be inverted for brief moments.
- Market makers can profit when their clients lose, while ECNs do not gain by their clients losing, which can mean market makers have a potential conflict of interest.
- ECN brokers tend to require higher minimum deposits than market maker brokers, making them less accessible to lower-deposit traders.
- Market makers will sometimes suspend trading in assets at the times of high-impact news events or other unusual events, or widen spreads massively, frustrating traders. ECNs can also see big fluctuations in spreads, but their markets should remain open.
- Market makers are more likely to offer trading in smaller minimum position sizes, such as nano-lots, which ECNs are unlikely to be able to offer.
Forex Market Markers - Pros & Cons
Using Forex market maker brokers comes with both pros and cons.
Pros:
- More predictable spreads
- Lower minimum deposit requirements
- No or low commissions
- Smaller minimum position sizes
Cons:
- Potential conflict of interest between broker and client profit
- Total trading fees often higher on average
- Slippage / requotes / suspension of trading more likely
How to Open an Account with a Market Maker Broker
- Draw up a shortlist of the best market maker Forex brokers which will accept you as a client. Some brokers have restrictions on countries they will market to, and many have minimum deposit requirements.
- Compare the remaining brokers other attributes, with the two most important being regulation and fees. You can probably narrow down your shortlist much more after this step to just one or two potential brokers.
- Consider narrowing down your list even more by evaluating nice-to-have features such as trading platforms etc.
- Open demo accounts with your remaining shortlisted brokers, and after a few weeks of paper trading you will likely have seen enough to know whether you will feel comfortable opening an account there with real money.
- Finally, open a real money account by following the account opening instructions at the market maker Forex broker(s) of your choice.
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