WHO RULES THE FOREX MARKET? A BOOK OR B BOOK BROKERS?

Once a trade is made, the only thing a trader is concerned about is if the resulting trade ends in Profit or not. For most traders, A Book or B Book might look like some technical Jargon, but that's the only way you know which broker makes money from Customers and those who don't, as well as who rules the Forex Market.

WHO ARE A BOOK BROKERS？

A Book in forex is defined as a type of execution model that is STP or let's say Straight through Processing. You might have come across some forex brokers who call themselves, STP broker, or an ECN broker or a non-dealing desk kind of broker.

What this means is that a broker operating under this type of a model passes your orders directly to the liquidity pool. A liquidity pool comprises of a number of entities acting as a counterpart to the trades flowing out from your forex broker.

An A Book broker usually charges commission on the trades, this is the fee you pay when you open and close a position.

With an A book broker, the forex broker does not act as your counterparty. For many traders, this is what matters the most – to be able to trade with a broker that does not have a conflict of interest when processing your orders.

WHO ARE B BOOK BROKERS？

When a forex broker processes your trades in-house (with a dealing desk), it is a B book. In the case of a B Book, your forex broker acts as a counterparty to your trades. The B book broker goes by different names such as market maker or a fixed spread broker. While this might be the case, there are some advantages that a B book forex broker has to offer. For one, you can get guarantee fills on your trades. Even when liquidity is low, you get a good execution of orders because your broker acts as the market maker.

Another point to remember is that a B book forex broker offers fixed spreads. This means that whether you trade during peak market hours or during off-market hours, a B book forex broker is more beneficial.

B book forex brokers typically charge a fixed spread which you pay for every time you open or close a position. This again has some advantages and drawbacks. For one, having fixed spreads makes it easier for you to trade when there are market shocks.

WHICH IS BETTER？ WHO EARNS MORE？

The answer to this depends on what you are looking for as a trader. For example, if you were based in a time zone where your start of business day usually means that the rest of the world is sleeping, a B book forex broker that offers fixed spreads is a better solution.

But if you are in a time zone such as the European trading session which is very active, trading with an A book broker is more ideal. This is because you are most likely to get the best possible spreads due to higher liquidity. In such cases, it is best to compare which of the two execution models are ideal for you. This allows you to make a more wise decision when choosing a forex broker.

In conclusion, whether it is an A book or a B book, you cannot trade without a counterparty. The question is whether you see any distinct advantage between the two execution models and of course there is no much debate in this that the B Book Brokers rule the Market. The Certainty of this is unmatched.

BRIEF BIOGRAPHY OF WRITER

Akabogu Chukwuebuka Nicholas CEO of Intelpro Forex Trading Limited Nigeria, over the past years I have been encouraging and training young individuals on how to trade on the exchange market. Intelpro Forex is working tirelessly in reaching the landmark of making over 10,000+ Nigerians as well as more individuals around the world aware of the art of Forex trading and how they can earn from the Forex Market. we also connect Traders with top brokerage companies around the world. we recently won the prestigious Golden challenge For Best partner 2021 with SuperForex brokerage company.