Follow Us
In the News
Tags
Stock & Options Broker News
Forex Broker News
Stock Broker Reviews
Comparing the New MB Trading Account Types
As we all know, there is no such thing as a free lunch. Commission-free forex brokers are no different. They simply increase the spread by a small amount to compensate themselves for routing the order. Is this always bad? Not necessarily. In fact one of the most transparent and affordable brokers in the industry is now offering a commission-free pricing model for their ECN.
MB Trading (read our review) is now accepting live accounts for their new “free ECN plan.” When I first learned about this I was worried. Normally brokers incorporate their commission into the spread as a way of hiding the true cost of the trade. However MB Trading still offers their commission based account option (where they also pay you for limit orders) and their commission free account has much lower spreads than I expected. In fact, if you normally do not use limit orders, it is most likely to your advantage to use the commission free trading model. Actually there are several reasons why an investor would pick one or the other, which I feel speaks highly of MB Trading for offering different options for a variety of trader types.
So why would you want to use this new ECN plan account type? If you’re a Metatrader 4 user this is a good option for you. Metatrader isn’t the best platform when it comes to placing limit orders and trying to work orders in at optimal price levels. However, it is very powerful for automated strategies which often times rely on market orders to hit their marks. Since you wouldn’t be taking advantage of the limit order rebate you would want to stick with the cheapest and simplest commission structure to maximize your gains. I believe this to be the best account right now if you’re using expert advisors exclusively.
On the other if you prefer to trade only with with limit orders, or are accustomed to using MB Trading’s desktop platform (the new free ECN plan is only available on MT4 for now), I suggest sticking with the standard account with the routing fees. You will pay less commission because of the limit order rebates and you get the added granular of being able to account for your trade commissions separate from your gains and losses.
Either way, the spreads are still the best in the industry when compared to other FX brokers with no-commission pricing. We will monitor them separately over time with our proprietary spread tracking tool so we can determine if there is a pure cost advantage by choosing one or the other. Right now they offer demo trading on both account types, so at a minimum test away and see how you like it!
Leave a reply