Best Market Maker Forex Brokers

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Contributor, Benzinga
December 15, 2023

U.S. forex traders love IG Markets or FOREX.com as the best market maker forex brokers.

Market maker forex brokers act as dealers who create a market for their clients, providing liquidity by offering buy and sell prices at all times. The market marker mechanism contrasts with Electronic Communication Network (ECN) brokers, who connect traders directly with liquidity providers.

Here, Benzinga reviews the top five list of market maker brokers and why you should consider using them.

Quick Look: Best Market Maker Forex Brokers

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

5 Best Market Maker Forex Brokers

Here are the best five forex market maker brokers worth considering.

1. Best for Overall: IG Markets

  • IG Markets
    Best For:
    Fast Execution for U.S. Traders
    securely through IG Markets's website

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

IG is a leading global market maker forex broker that provides a wide range of excellent trading tools, competitive spreads and an extensive range of educational resources. It supports the MetaTrader 4 platform and its proprietary web-based trading platform. IG’s desktop forex trading platform is intuitive and easy to use, allowing first-timers to quickly open an account and start trading.

IG offers spreads starting as low as 0.8 pips on some currency pairs and leverage up to 400:1, making it an attractive option for traders looking to maximize their trading potential. The minimum deposit for a standard account is $250.

Pros

  • Wide range of tradable instruments
  • Strong regulation by multiple top-tier authorities 
  • Competitive spreads
  • User-friendly platform

Cons

2. Best for Trading Platform: Plus500

Plus500 is a well-regulated market maker broker offering a user-friendly, proprietary trading platform with advanced features, making it suitable for beginners and experienced traders. The platform is also available as a mobile app for Android and iOS devices.

Plus500 offers low minimum spreads, which start at just 0.8 pips. It also features low minimum deposit requirements at $100 for most account types, making the broker accessible to traders at all levels.

Plus500 helps traders amplify their profits with leverage of up to 1:30.

Pros

  • Unlimited demo account 
  • Excellent mobile trading app 
  • Competitive spread

Cons

  • Not available for U.S. residents
  • Limited educational resources

3. Best for Beginners: eToro

  • eToro Forex
    Best For:
    Copy Trading
    securely through eToro Forex's website

    CFD trading is not available to U.S. users. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

eToro is known for its social trading features, allowing traders to follow and copy the trades of other successful traders. The platform provides an easy-to-use trading platform, strong customer support and a wide range of educational resources, making it an excellent choice for beginner traders, although it may not be the best choice for advanced traders.

Traders can get leverage of up to 1:50 for forex and low spreads starting from 0.75 pips. The minimum deposit requirement is also relatively low, at just $50.

Pros

  • Wide range of educational resources 
  • Low spreads and minimum deposit requirements 
  • Social copy trading features

Cons

  • No support for scalping
  • Inactivity fee
  • Comparatively limited trading instruments

4. Best for Research and Education: FOREX.com

  • Forex.com
    Best For:
    Fast Execution and High-Volume Traders in the U.S
    securely through Forex.com's website

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% to 77.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

    The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account

FOREX.com is a well-regulated forex broker that excels in research and education, providing an extensive library of educational resources, including articles, webinars and video tutorials. 

FOREX.com offers tight spreads on over 80 currency pairs, as low as 0.2 pips for commission accounts. In standard accounts, the minimum spread tends to hover around 1.0 pips, depending on the specific currency pairs. It helps traders boost their profits with up to 50:1 leverage on major forex pairs and up to 20:1 on minor pairs. You can open a FOREX.com account with as little as $100 or equivalent in your local currency.

Pros

  • Vast selection of educational and research resources
  • Access to over 80 currency pairs 
  • In-built TradingView charts

Cons

  • Limited product portfolio 
  • No account protection for U.S. users

5. Best for Competitive Spread: XM

  • XM Group
    Best For:
    Beginner Forex and CFD Traders
    securely through XM Group's website

    Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

XM is a market maker forex broker known for its competitive spreads, making it an attractive choice for cost-conscious traders. The platform supports MT4 and MT5 trading platforms, providing traders with a range of powerful trading tools and features. XM also offers extensive educational resources, including webinars, video tutorials and market analysis.

Starting at 0.6 pips, XM has one of the lowest minimum spreads of the brokers on this list. The minimum deposit amount required to start trading forex is $5 with leverage of up to 30:1

Pros

  • Low minimum spreads
  • Wide range of tradable instruments
  • Comprehensive educational materials
  • Strong regulations

Cons

  • Limited product portfolio
  • Standard account spreads are higher than the industry average

What are Market Makers?

A market maker is a financial institution or individual that actively buys and sells securities, currencies or other financial assets to provide liquidity to a market. In the foreign exchange market, market makers facilitate trading by providing buy and sell quotes for currency pairs and profit from the spread between the bid price and ask price. They play an important role in ensuring that there is always a buyer or seller for a currency pair, even during times of low trading activity.

What's the Difference Between Market Makers and ECN Brokers?

Market makers act as a counterparty to their clients' trades, meaning they take the opposite position of their clients. When a client buys a currency pair, the market maker sells that same currency pair and vice versa. Market makers typically offer fixed spreads and can provide liquidity even during low trading volumes.

On the other hand, ECN brokers connect traders directly to the interbank market, where they can trade directly with other market participants. ECN brokers typically offer variable spreads and charge a commission on trades. They provide traders with direct market access (DMA) to deeper liquidity and potentially tighter spreads, especially during high trading volumes.

Forex traders might choose a market maker if they prefer fixed spreads, want to avoid paying commissions or if they are trading during low trading volumes. Conversely, traders might prefer an ECN broker if they want deeper liquidity, more pricing transparency, potentially tighter spreads and are willing to pay a commission on trades.

Advantages of Market Makers

Market makers offer several advantages to forex traders, including:

  • Fixed spreads: This means traders know exactly what they will pay as spread when they enter a trade. This can be beneficial if you want to know your costs upfront.
  • Liquidity provision: Market makers provide liquidity to the market, allowing you to buy and sell currencies even during low trading volumes, which makes it ideal for when you need to execute trades quickly.
  • Price stability: Market makers stabilize prices by supplying liquidity and taking the opposite side of their client trades, which helps clients avoid sudden price movements.
  • Risk management tools: Market makers help traders manage risks and limit losses with risk management tools, such as stop-loss orders and guaranteed stop-loss orders.

Disadvantages of Market Makers

Market makers also have some disadvantages that traders should be aware of, including:

  • Conflict of interest: Market makers act as a counterparty to their clients' trades, which means that they can profit when their clients lose money. This creates a conflict of interest which could impair trust.
  • Requotes: Market makers may require requotes when there is a significant change in market conditions or when there is a large order size. This can be frustrating for traders who are trying to execute trades quickly.
  • Limited transparency: Market makers do not always provide transparent pricing information, making it difficult for you to know if you are getting a fair price.

Your Forex Success: Choosing the Right Market Maker Broker

The brokers mentioned in this post are some of the best in the industry, offering competitive spreads, reliable execution and a range of trading platforms to suit different needs. It's important to do your own research and consider your individual trading goals and preferences before selecting a broker. 

Frequently Asked Questions 

Q

Who is the biggest forex market maker?

A

The largest forex market makers are often major banks or financial institutions.

Q

Do market makers make money?

A

Yes, market makers make money through the difference (or spread) between the bid and ask prices.

Q

Is a market maker a broker?

A

Yes, a market maker can be a broker that facilitates the buying and selling of currency pairs in the forex market.

Get a Forex Pro on Your Side

FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade. 

You can also tap into:

  • EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
  • Powerful, purpose-built currency trading platforms
  • Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program

Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.