No Conflicts of Interests
A clear and straightforward regulatory status (i.e. License) is probably one of the most important factors to look for whenever considering and assessing the level of Conflicts of Interests, Transparency, Integrity and Safety of Client Funds that may affect your experience when selecting a Retail Broker of choice.
We at Edge Brokers are exclusively licensed as a Matched Principal Broker (100% DMA/STP Agency Model), which may not hold any proprietary positions, has no exposure, and is therefore only acting as an intermediary between its Clients, Liquidity Providers and major Exchanges, hence strictly operate a Commission-based Revenue Model.
If the vast majority of Retail Brokers, including those extensively promoting ECN/STP/NDD/DMA operations via PRO or DIRECT trading accounts do hold the permissions to make the market (i.e. dealing on own account), we at Edge Brokers deliberately chose NOT to be authorized and licensed to conduct market making activities, hence have NO rights to operate any Dealing Desk (i.e. not even partially), have NO conflict of interests with our clients, and for those who may still have any doubt this is verifiable on the ACPR, FCA, ACP and BaFin websites.
Any Broker promoting Direct Market Access (i.e. DMA), Straight Through Processing (i.e. STP), Electronic Currency Network (i.e. ECN), Non Dealing Desk (i.e. NDD), or PRO/DIRECT trading accounts may nevertheless “Make the Market” even if only partially (i.e. pass 50% of clients’ orders to the inter-banking market and hold on their B Book the other 50%) as and when they wish. In theory, there is nothing wrong with this configuration as long as the Broker runs an ethical business. In practice, Regulators such as the NFA and the FCA have both demonstrated condemnable practices conducted against clients’ interests by brokers claiming ECN/STP/NDD/DMA operations. The temptations to manipulate pricing and execution to the sole interest of the broker’s bottom line remain systematic.
For us the equation is straightforward, the more our Clients trade, the more profitable they are, the more loyal they are, the more successful we shall be in turn. We are strictly in business to match and exceed our Clients’ expectations; their interests are our main and sole interest, full stop.
Post-Trade transparency is also one of the most important factor to look for whenever considering and assessing Conflicts of Interests, Transparency, Broker’s Integrity and Safety of Client Funds.
We at Edge Brokers protect our clients’ interests by granting them with full transparency. Pre-trade (i.e. No Spread Mark-up): we pass to our clients the exact same spreads we receive from our Liquidity Providers, with the EUR/USD spread often averaging 0.1 pip.
Post-trade (i.e. full Execution Reports): upon clients’ request we systematically present the name of the Liquidity Provider which filled their trade, how fast (execution times are often in the sub 2 milliseconds), at what price and at what time. That is how Transparency shall be understood and implemented, that is how the MiFID Directive sees it, and that is precisely how we believe any Retail Broker should operate. Anything else cannot be qualified of Transparent by MiFID standards.
In addition, we protect our Clients’ positions and strategies with Full Anonymity at the inter-banking market level. Unlike with Market Makers, without any exceptions 100% of our Clients' trades are DMA/STP to the marketplace, and most importantly our Clients' identity and orders are kept 100% anonymous (i.e. including Take Profits and Stop Losses limit orders) to our Liquidity Providers. This minimizes any information leakage risk, which is the absolute protection against unethical brokerage practices such as Stop Hunting.
No Requotes & Price Improvement
There are two standard ways to execute trading orders: “Fill or Kill” or “Fill or Fill”. The vast majority of Market Makers do not enable “Fill or Fill” and instead abuse from the “Kill” by forcing a few seconds of delay in the execution of an order, just enough to allow price movement and justify a requote.
Clients’ winning trades are most notably affected by requotes. In effect, market makers have happened to prevent their clients from generating profits. Such practices have been condemned several times by international regulators such as the NFA (i.e. NFA fined “world class” Market Makers for systematically delaying of up to 5 seconds trades winning more than USD 2000, reports available online). A practice we at Edge Brokers do not support and also condemn vigorously.
Every single one of our Clients’ orders are systematically Straight Through Processed to our Liquidity Providers on a "Fill or Fill" basis (i.e. no requotes) with both positive and negative Slippage enabled (i.e. no broker intervention). We pride ourselves for being able to provide upon Clients’ requests all relevant Post-Trade Execution Reports presenting Execution Times (often averaging sub 2 milliseconds) and naming which Liquidity Providers filled our Clients’ orders.