How LMFX's STP Forex is different from Market Makers and Bucket Shops
Who is LMFX STP broker?
LMFX is a relatively young company, but they take the reputation seriously and value every partner or client.
LMFX can confidently tell you that they have the best interbank market spreads, the highest standard of service, and reliable partners that you can learn more about on LMFX Official Website.
All of this is a result of the hard work LMFX has put into the company and the clear-cut policies, the main purpose of which is to satisfy LMFX’ clients’ needs in trading, investments and increasing their wealth.
Finally, LMFX would like to note that there are many companies, it is up to you to decide which one you should trust.
However, LMFX is certain that once you try their services, you won’t need to look for any other broker.
LMFX’ doors are always open for the daring and confident people who want to grow their capital.
LMFX is sincerely interested in your success, and they strive to grow with you.
LMFX is a STP Forex broker
It so happened that when confronted with the word “commission” people think that somebody wants to earn on them, it causes a negative reaction.
Traders hasten to take advantage of those who does not use commission, and we think that these companies are more honest and fair.
The same thing is happening in the financial sector. Is it really? Are Commissions scary? Are Fair those who provides attractive bonuses, without commissions?
Try to understand. Speaking of those who exposes the commission, we mean STP-broker like LMFX.
What is STP Forex Broker?
STP Broker (straight through processing) is a type of brokers, which is connected to one or more providers of liquidity.
Such broker directs dealings on those transaction provider which offers the best price.
The main income of STP broker is a payment of commissions that it receives from each client, however, note that in this case the broker is interested in winning of their customers, is committed to fully support them and are interested in long term cooperation.
Now we consider a situation in which you offer good leverage, various bonuses and did not charge commission.
We are talking primarily about Bucket shop.
What is the concept of Bucket shop?
Bucket shop is a slang expression in the field of brokerage.
We are talking about the fact that in this case the client requests do not go outside of the company, the trader does not get access to liquidity.
In this situation, there is no need of “external” deals.
In other words, we are talking about a distorted internal “clearing”.
In a classic example, if the broker has no counter requests, there is a necessity to implement a deal with an external counterparty, or to be as independently opposite side and take on market risk.
After this situation, Bucket shop has to be hedged in the foreign market.
During the Performing transactions on himself, Bucket shop does not carry out any balancing operations.
In fact, the broker is just beginning to correct the client’s balance sheet.
In this case, obviously, there is a conflict of interests, the loss of client becomes a profit for the broker and the profit of client becomes a loss.
Thus, we speak right, Bucket shop earns on your loss and does everything that you were a loser.
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Bucket shop with a bookmaker
In this case, we compare Bucket shop with a bookmaker.
Such organizations do not receive finance from external sources.
If a person made a bet and won, the bookmaker pays out independently, and their main profits are your losses.
Obviously, the clients with such “broker” are on opposite sides of the barricades.
In connection with this, there are very common cases when brokers do not pay winnings and deposits.
However, Bucket shop has its own clients.
Do not they know about the current state of things? Probably they know. Bucket shop can also be useful.
In which case it makes sense to become a client Bucket shop?
Suppose you have a small amount about $200 and want to learn the basics of trading in the currency market.
Bucket shop allows you to trade with such small amount.
You learn how to play, analyze calculations follow exchange rate, gain experience, however, in which case you should be prepared for the loss that will come sooner or later.
These are the realities of these companies. Perhaps this is all the pluses of bucket shops.
Why you should choose STP Forex Brokers like LMFX?
If you have sufficient capital (usually $1000), it makes sense to turn to STP, a broker that gives you transparent prices and let you withdraw your money on demand, because the activities of such broker is controlled by the relevant government authorities.
This is not true for the bucket shops.
LMFX is an STP broker with a European license (regulated by the Cyprus Commission for Securities and Exchange Commission (‘CySEC’), which is directly interested in the success of their clients.
LMFX has provided the traders with everything necessary for efficient and profitable trade such as lots of training material, various personal services to help its customers, including beginners, a large volume of unique analytical material, round the clock customer support.
When you refer to the Bucket shop, this is equivalent to as if you decide to buy fake goods.
It is an illusion of trading, which carries certain attractive points, however, this does not cease to be an illusion.
STP broker like LMFX is one of the most reliable ways to protect yourself from unforeseen risks and start building your financial way not on sand, but on the solid basis of the fair.
Become part of a large and strong team of professionals LMFX today and start your way to financial freedom.
What is the difference of Market Maker and STP broker?
Market Maker and STP- broker, what is the difference between them and who is more reliable?
Today, people often think about all the companies that operate on the model of market makers and brokers STP.
“Who will really help me to earn? Can I become richer with them?, Who is a reliable partner? What is the difference between them??
We will try to understand all matters.
Formerly people called the exchange like place or building where traders and intermediaries, stockbrokers for transactions in the securities or commodities were going at a certain time.
Before the era of computerization on transactions parties agreed orally.
Now trading is in electronic form using specialized programs that provide a variety of brokers.
Let’s try to understand the concepts of market makers and STP broker.
What is a market maker or liquidity provider?
A market maker or liquidity provider is a company, or an individual, that quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid-offer spread, or turn.
In the United States, the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX), among others, have Designated Market Makers, formerly known as “specialists”, who act as the official market maker for a given security.
Transactions carried out by telephone or via the Internet and takes seconds.
On the stock exchange Market Maker may be a brokerage firm, which according to the agreement with the stock exchange, is obliged to keep within a certain time (say, less than 90% of trading time) at the same time exposed applications with the difference between bid prices on buying and selling no more than a specified value.
Through this exchange market maker provides certain benefits, such as payment of commission.
What is STP (Straight Through Processing)?
STP (Straight Through Processing) enables the entire trade process for capital markets and payment transactions to be conducted electronically without the need for re-keying or manual intervention, subject to legal and regulatory restrictions.
STP brokers send orders directly from clients to the liquidity providers, international banks.
STP brokers may have either a single supplier or several.
The greater the number of banks involved in the process, and accordingly, more liquidity, the better for the customers.
The main essence of STP platform is in access to the real market traders and market prices, plus the ability of immediate execution of orders without the dealer.
Comparison of Market Maker and STP broker
Now that we understand the meaning companies, we will try to carry out a comparative analysis of “Market Maker” and “STP broker” below.
| Market Maker | STP- broker |
|---|---|
| Fixed Spread | Varying spread |
| Direct execution | Possibility of slippage |
| Stop lots Hunting | No conflict of interests |
| Imposing risks (high leverage) | Fair pricing |
| The imposition of risks (high leverage) | Broker earns together with the trader |
As can be seen, a market maker has a significant advantage in that it can provide traders fixed spreads and direct execution of the order, which is very important.
However, the main source of income of these companies are the financial losses of customers, which often entails the non-payment of winnings.
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Invest with LMFX the STP broker
LMFX is STP broker and is regulated, consequently, the main interest of the company is successful stable earnings of the clients.
Thus, the LMFX makes closer their customers to the transparent and fair trading.
In LMFX’ work, they use a model, which eliminates the conflicts of interest between companies and broker-trader.
Thus, LMFX is always on the side of clients, helping maximize profits while trading without dealing.
LMFX does not manipulate prices, which means you can lead your trading activities without unnecessary fears and prejudices.
LMFX is changing your representation of the Forex market and speak openly that they earn is not on your losses, but on bank charges.
Want to note that LMFX, being a socially company is always thinking one step ahead about the latest technologies that help traders become more successful.
LMFX provides all the necessary information for learning and professional growth.
LMFX grows and evolves with you.
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