What is a Market Maker Broker
What Exactly is a Market Maker Broker?
A market maker broker (also called a dealing desk broker) sets both the bid and ask prices for currency pairs and takes the opposite side of your trade. Unlike an ECN broker that matches you with other traders, a market maker profits from the spread and sometimes from your losses. For Gabon retail forex traders, this means you can trade instantly without waiting for a counterparty.
How Does It Work?
When you open a buy order for EUR/USD at 1.1000, the market maker sells you that position from its own inventory. If the price rises, you profit and the broker loses; if it falls, you lose and the broker profits. The broker earns the spread (the difference between bid and ask) on every trade. For example, if you trade $1,000 USD with a 2-pip spread, the broker makes about $0.20 per round turn.
Why It Matters for Gabon Traders
Gabon traders often face challenges like limited banking options and slower internet. Market maker brokers can offer fixed spreads, guaranteed stop-losses, and faster execution because they don’t need to search for counterparties. However, the conflict of interest means you should only trade with regulated market makers that segregate client funds.