Brokers with commission

A

angelnish

Active Member
#1
#1
What is the advantage of a broker offering a narrow spread plus commission if the total fee is the same as a broker with no commission?

I am specifically reffering to Pepperstones Razor account (commission plus minimum spread) and am wondering what the advantage is over the standard account (no commission normal spread).
 
N

Newbie Day-Trader

Well-Known Member
#2
#2
Usually, normal commissionless accounts are those where the broker continuously quotes buy & sell rates therefore, if you lose, he wins, & when you win, he loses so there is a conflict of interest & therefore, some such brokers will sometimes take out stop-losses or not honor their traders' profits, etc

On the other hand, commission-accounts are usually ECN-accounts, where the broker allows its traders to trade on the interbank market rates & thereby doesn't take the opposite side of the transactions & therefore there's no direct conflict of interest between the broker & his clients, that's why some traders prefer ECN-accounts

Here is an article about it - http://www.investopedia.com/articles/forex/06/ECNmarketmaker.asp#axzz1yKQ5Zklg
 
A

angelnish

Active Member
#3
#3
Newbie Day-Trader said:
Usually, normal commissionless accounts are those where the broker continuously quotes buy & sell rates therefore, if you lose, he wins, & when you win, he loses so there is a conflict of interest & therefore, some such brokers will sometimes take out stop-losses or not honor their traders' profits, etc

On the other hand, commission-accounts are usually ECN-accounts, where the broker allows its traders to trade on the interbank market rates & thereby doesn't take the opposite side of the transactions & therefore there's no direct conflict of interest between the broker & his clients, that's why some traders prefer ECN-accounts

Here is an article about it - http://www.investopedia.com/articles/forex/06/ECNmarketmaker.asp#axzz1yKQ5Zklg
Click to expand...
Thanks for this useful article and link:thumb:
 
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