Why Do Many Forex Brokers Only Use B-Book Execution Now?

why nowForex platformAre all the brokers only doing business in position B and not in position A?

There are actually three reasons:

The first point: As the competition in the industry becomes more and more fierce, the spreads of the trading varieties provided by these Forex platform brokers are getting lower and lower. Many Forex platforms have launched so-called ECN accounts, which are actually low spread or zero spread accounts, and then only charge a small handling fee. This handling fee is not enough to throw the order to the LP for clearing. Therefore, for the Forex platform, throwing your order to the clearing or market is to go A. The Forex platform will definitely lose money, so in this case, the platform can only do the business of B position.

Second point: Many Forex platforms have poor technical development capabilities. Customer orders can only go directly to the automatic trading mode of MT4 or MT5. In this case, the Forex platform does not need to do any transaction processing, or it is thrown to the LP through the bridge. The bridge itself is provided by a third-party company, and then The technical docking between Bridge and LP is also a technical service provided by a third-party company. Once an order is generated in this intermediate process, some problems will occur during the intermediate execution. For example, the order fails to be completed, and the order does not have a profit or loss stop. If these problems occur, who will pay the money in the end? This responsibility is difficult to determine. It is not very profitable to take customer orders to book A and leave them to the market. Once order problems arise again, the gains outweigh the losses. Therefore, for many Forex platforms, in order to avoid this kind of trouble, they simply go to book B instead of book A.

The third point: In fact, it is also the most important point. 90% of customers lose money when making transactions. Therefore, for Forex platforms, as long as the number of platform customers is large enough, it does not matter even if a small number of customers make profits, but overall, most customers of the platform lose money. In this case, the Forex platform will definitely make money, so it is the simplest and most effective way for the Forex platform to put all customers into position B. Finally, the editor reminds you that if you are more confident in your trading ability and think that your profit probability is relatively high, or you have a relatively large amount of funds, then you can go toForex platform account openingWhen you do so, you can explain to the platform and put your account in book A. Otherwise, the platform may not allow you to withdraw money after you make a profit. Depending on the actual situation, many large platforms can also withdraw money from book B. When you grow in size and make more profits, the platform leverage will be reduced. We don't know whether the platform will put you in position A. Nowadays, it is basically very difficult to find a platform that can really put your order to the market and take LP or position A.