Last updated on September 22nd, 2022 at 09:34 pm
What is A Book vs B book in Forex trading?
What is A Book vs B book in Forex trading? B book brokers trade against you. A book brokers do not. Forex is different from equities or futures trading because your broker can choose to trade against you. This is known as B booking. When your broker sends all your trades to the real market or their liquidity providers, this is known as A Booking.
In futures or equities trading, all your trades are sent to the exchange and matched with other buyers or sellers.
In Forex, your broker can keep your trades ‘in house’. This means that your trades are not sent to the real market. Instead, your broker bets against you, taking the other side of the trade.
For example, if you were to buy 1 lot of EURUSD at 1.35000, then your broker would be selling 1 lot of EURUSD 1.35000. If you win, your broker loses, vice versa.
This simple diagram shows how your broker and B book or A book your trades
Why do Forex brokers B book?
A B book business model is a very profitable one. Statistics says that 90% of traders lose their deposits within 6 months. The statistics favour the broker significantly.
Take a look at this table comparing A Book and B Book revenues
| Clients | 100 |
| Average deposit size | $1,000 |
| Total deposit size | $100,000 |
| Trade size (lots) per client | 0.1 |
| Trading days in a month | 20 |
| Trades per day | 3 |
| Total monthly volume (lots) | 200 |
| Commission earned per lot | $7 |
| A BOOK | B BOOK |
| Total revenue from commissions | Clients lose 10% deposit in 1 month |
| Total monthly volume*commission per lot | 10%*Total deposit size |
| $4,200 | $10,000 |
Clearly you can understand why a broker would choose to B book their clients.
Note: The losing rate of traders drops significantly for deposit sizes above $10,000, which is why some A-book brokerages prefer to have a minimum deposit of $10,000
Fact: IG markets holds the largest B book in the world
———————————————————————————————————————————————
Increasing the profitability of the B book model – Hybrid Model
Yes, the B book model’s profitability can be increased even further!
What if we could identify those 10% of traders who are profitable and send their trades to the real market, while we keep the other 90% of losing trades?
This is called the hybrid model and it is a very popular model adopted by many of the large and popular Forex brokerages today. The challenge lies in correctly identifying losing and winning traders.
There are trade analysis software out there which can predict whether a trader is worth B booking.
Certain tell tale signs include:
- Maxing out of leverage,
- Risking more than 10% of account balance per trade
- No stop loss
- Deposit size less than $10,000.
———————————————————————————————————————————————
Pros and Cons of a B book broker
So what are the pros and cons of trading with a b book broker?
Well, if your Forex broker purely B books you, without giving you slippage, then it is actually good for you! You can deploy strategies that won’t work on A book brokers such as news trading.
This is because in an A book broker, if you were to place a buy and sell stop just before the news, hoping for a breakout in either direction, you will receive a lot of slippage, because there is simply no liquidity to fill your trade during news.
In a B book broker, there is ‘unlimited liquidity’, hence whatever price you want to be filled at, the broker will ‘make a market’ for you, and fill you at the price you want. As a result, there is zero slippage, and news breakouts can be very profitable.
However, B book brokers today will simulate your fill against the real market, and B book you. This means that your trade is filled as if it were to be trading on an A book (with slippage), but instead of sending your trades out to their liquidity providers, they keep your trades in house.
This way, they get the best of both worlds. You receive the slippage, and they bet against you.
———————————————————————————————————————————————
Advantage of A book brokers
Liquidity providers don’t like toxic flow from hybrid or B book brokers
All hybrid brokers will send the trades of their profitable traders out to their liquidity providers. This flow is known as ‘toxic flow’, because these are profitable traders and no one wants to bet against them correct?
When banks and other LPs receive these toxic flow, their trade rejection rates are higher. Some of your trades will be rejected by the banks or LPs (known as ‘last look’) and you will receive a worse price, because you will be filled at the next best price.
The good news is that none of this is relevant when trading with a purely A book broker. Liquidity providers like the balanced flow of an A book broker and they are much less likely to reject your trades. This means you get better fills at the prices you want.
———————————————————————————————————————————————
Brokers that are pure A book
Logically speaking, it would be good to trade with brokers that are ‘on your side’ isn’t it? They want you to win, and will support you in any way to win. Because when you win, they win too. This means they don’t play tricks on you, such as slippages, requotes, or delay your trade execution times.
- One of the pure A book brokers I’ve encountered is Global Prime Australia. How do I know?
Global Prime is able to show you the liquidity receipt for every single one of your trades. Just drop Jeremy from Global prime an email ([email protected]) with your trade ticket number. This is one of their unique selling points, which no other broker will do.
———————————————————————————————————————————————
If you’re interested in trading with Pure A book brokers
If you’re interested in trading with Global Prime, I’m glad to say that Abundance Trading Group is able to help reduce your trading costs through providing you with discounted commissions rates.
Global Prime – $5.50 discounted commissions instead of $7 per rt.
If you are interested in the discounted commission rates, please visit the following page for more information on how to register:
- Global Prime
- Or you can open an account immediately here
I hope this article has truly benefited you! I truly enjoyed writing it and tweaking this article to be as beneficial as possible! May you benefit greatly from it!
———————————————————————————————————————————————
What about CFDs? Isn’t that also B booking?
Yup Mick, you’re absolutely right. CFDs is 100% B booking, unless your broker decides to pass off your CFD risk to other liquidity providers, like LMAX.
LMAX would purely act as an exchange between CFD liquidity providers and the trader.
In Singapore, I speculate that most brokerages that allow CFD trading mostly B book CFD traders
So no matter where we trade, there area alway got someone is trading against us ???
Yes exactly. If you trade in a stock exchange, there must be another seller for you to buy.
In Forex, it is the same principle. It is just whether your broker trades against you, or they pass your trades on to the liquidity providers
Where are you forex broker business
Is FinFx A or B?
A book
hello why not try fxclearing.com its me sam
Which of the below brokers are A, B or A+B (hybrid)?
AxiTrader
Solidary Markets Fx (Axi feed)
Excel Markets
Liquid Markets UK (they stopped the CY operations recently)
3TG
Pepperstone
SpediaFX
FxOpen
FXCM
AAAFx
ThinkForex
HotForex
FxPrimus
Ic Markets
Vantage Fx
Divisa Capital
Sorry it is quite a list. Could you also mention if they have a B license?
Hi Giancula,
Which of the below brokers are A, B or A+B (hybrid)?
AxiTrader (A+B)
Solidary Markets Fx (Axi feed) (not sure)
Excel Markets (not sure)
Liquid Markets UK (they stopped the CY operations recently)(not sure but I suspect A+B)
3TG (not sure)
Pepperstone (A+B)
SpediaFX (not sure)
FxOpen (I speculate, B book but they only use it for order matching purposes. They don’t take positions against their clients. They match orders via B book because it is cheaper. They don’t have to send the trades to their LPs which costs money. If trader A wants to buy 1mil EURUSD at 1.35 and trader B wants to sell 1mil EURUSD at 1.35, instead of sending both orders to LPs and incur LP charges, why not match them both via a B book instead? they can do this because their proprietary MT4 bridge and ECN order matching software allows them to do so. No other broker has this I believe.)
FXCM (I speculate A+B…they have cheated their clients so many times..why would you trade with them…?)
AAAFx (not sure)
ThinkForex (not sure)
HotForex (not sure)
FxPrimus (A+B ..their fixed spread account is B book)
Ic Markets (A book)
Vantage Fx (not sure)
Divisa Capital (I have traded with them before, but I’m not sure)
Sorry it is quite a list. Could you also mention if they have a B license?
Pepperstone has a licence to make markets (i.e. take positions against you) The rest I’m not sure. It is written in the fine print of their legal agreements when you open an account with them.
Thanks Linton!
So best to use only the three brokers mentioned by you which only run an A book right?
Hi Gianluca,
Yes that is correct, A book is the best. However, A+B book (hybrid) is also fine, so long as they don’t mess with your trades. Such as give asymetric slippage (means give negative slippage, but keep all the positive ones to themselves), or intentionally delay your trades using virtual dealer plugin.
I trade with Axitrader, IC markets, Global prime and Tickmill
Axitrader is hybrid, thus you do not know when you will be A-booked or B-booked
Xdirect r XTB brokers are which type brokers A r B?
I speculate A+B book
Great post.
What about Dukascopy Swiss and Dukascopy Europe? A or B?
Ducascopy swiss and europe are both A book.
Well they introduced CFDs and Binaries now. And lower acc mins for DukasEurope. I suspect that they are A+B now.
Thanks for this eye opening article but what about blackwell global,the alparis & magnatis finance known as MFI.
Blackwell Global is A book, For Alpari on their classic accounts it is pure B book. Alpari’s PRO account is pure A book.
I am not sure about magnatis finance as I have not heard of them before. I think it would be better if you go with brokers who do not have a licence to B book such as Sensus Capital.
thank you abundance.l’l the contact
You’re welcome 🙂
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I wonder how do they pick customers to put under B-book? 😐
Most likely if you’re losing money, you’re on the B book 🙂
Hotforex is definitely A-book broker as it has STP execution, which means they just transfer orders to LPs. ECN brokers is very likely to use B-book techniques as their device allows them to do that..
Hi Jeff,
That is not exactly true. As long as a broker STPs 1% of their client’s trades (hedges 1% of their clients trades with the LPs), they are allowed to call themselves an STP broker.
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Hi Linton, what are these like in terms of being A or B book?
CLM forex(Core Liquidity Markets au),
DirectFx au,
Citifx au,
Armada,
Pacific Financial Derivatives(PFD),
GDMFx
FXPig. The last three are from New Zealand.
Sorry about the long list.
Hi Jacob D. Vils,
CLM forex – Hybrid (a & b book) – read their product disclosure here: https://clmforex.com/wp-content/uploads/2013/04/Core_Liquidity_PDS_Margin_FX-1.pdf
We may not hedge a client’s position or post the trade
“straight through” (known as Straight through
Processing, or STP) and instead, we set the prices at
which we are prepared to deal with you. In some
cases, client trades are “hedged” by passing the
equivalent volume of instrument traded through to a
liquidity partner, thereby mitigating client risk
resulting from adverse market movements
DirectFx AU – A book
Citifx AU – hybrid
Armada – A book
PFD – hybrid
GDMFx – B book – http://www.gdmfx.com/gdmfx-order-execution-policy
“GDMFX will act as the principle for all orders submitted by the client. ” only when they act as the Agent, then they are not b booking
FxPig – A book
Hi Jacob,
You can find out whether they are A or B book usually by reading the fine print of the customer / legal agreements on their website
Best regards,
Fxpro and Ironfx, are they A or B book?
They are both A+B book (hybrid)
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I understand that stoploss and take profit EA can be used to hide your stoploss and take profit target from price manipulation from B book broker. How does it work, can you elaborate on this.
The EA remembers your SL & TP price internally, and closes your trade when it reaches the specific SL or TP level. It doesn’t send the SL or TP prices to your broker.
By the way, all the brokers on our website do not engage in price manipulation. You should give them a try if you are stuck with a broker that hunts your SL & TP
I’m happy to hear that the brokers in your website do not gauge in price manipulation. Please can you list them especially the A book and (A+B) hybrids.
Hi Sutivserv,
Axitrader: A+B book
IC Markets: A book
Global Prime: A book
Tickmill: A book
SynergyFX: A book
FxOpen AU: A book
LMAX: A book
Sensus: A book
FinFX: A book
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Please can you recommend any true ECN/STP brokers that have the following attribute:
1. Maximum leverage: 100:1
2. Minimum Lot size: 0.1
3. No markup on spread
4. No stop loss hunting
5. No slippage
6. No re-quoting
7. low commission
8. low swap
9. Guarantee no negative account balance
Hi Sutiserv,
1. Maximum leverage: 100:1
2. Minimum Lot size: 0.1
3. No markup on spread
4. No stop loss hunting
5. No slippage
6. No re-quoting
7. low commission
8. low swap
9. Guarantee no negative account balance
I would recommend Tickmill. They:
1. guarantee no negative account balances.
2. They have *low slippage* (not no slippage, not possible)
3. no requotes
4. low commission 3.8 per rt after Abundance Trading Group discount
5. no markup on spread
6. no stop loss hunting
7. However, minimum lotsize is 0.01, not 0.1.
8. Max leverage is 500:1 not 100:1, however, this can be adjusted to 100:1
As for a broker that meets all your criteria..this is the closest so far. I am currently searching for brokers that meet your criteria. Drop me an email at [email protected] and I can keep you updated.
Hi,
Very nice and helpful article.
But now I am wondering how B booking works on cTrader.
Traders expect that there is no conflict of interest between brokers and traders on cTrader but Spotware, developer of cTrader publishes the article that tells A/B booking feature exists.
I also saw the screenshot of cBroker(provided by IC Markets) that shows clients are grouped in B book.
How does this work?
There is no disadvantage to be categorized in B book in this case?
Thanks.
Hi Kei,
Good question.
“Traders expect that there is no conflict of interest between brokers and traders on cTrader but Spotware, developer of cTrader publishes the article that tells A/B booking feature exists.”
This is not true. Clients can be b-booked under cTrader as well. However, using the cTrader platform, the broker cannot intervene in the client’s trading i.e. cause slippage, delay trade execution. These are all old tricks (2007-2010) of the MT4 platform, which very few brokers use nowadays.
In cTrader’s website it says: Dealing desk intervention is impossible, guaranteeing you a level trading field that helps you reach your trading goals.
By that, they mean that the broker cannot intervene in the execution of your trades. However, they can still take the other side of your trade (B book). Still I feel there is no cause for concern. To me, as long as the broker cannot intervene in my trades, it doesn’t matter which side he is on (A or b book).,
Linton
Hi Linton,
But now I’m wondering who the counter-party is.
If the broker takes the other side of traders positions are their trades filled in house?
Or all trades are filled in ECN even if traders are b-booked and in addition brokers place orders for their own profit?
Thanks.
Kei
To be honest and I not sure of the right answer and can only make a good guess. My guess is that trades are filled via ecn and then the broker opens addition positions. Because, if the trades were filled inhouse, you would not receive any slippage. Still I dont think this seems correct. There should be another way where the broker can B book you while simulating real life fill conditions
What is the main difference between Dukascopy Bank SA and Dukascopy EU?
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hy.. i losse very much in forex trading i use broker from rusian n cyprus belize, when i trade i alwaus losse.. they stop hunting. n if i no sl they pushing me until i blown my acount. after that the price back to my prediction is always happen to me. my questiob how to avoid this market maker? is there any time they cant trade again us? in news release?? coz in regular hour imposible we win coz they trade again us. thanks
Hi Jajang,
You can try Global prime Australia, they are a broker that definitely doesn’t trade against you because they provide you the liquidity provider receipts of the LP who filled your trade.
Regards,
Linton
hi Linton,
i was just wondering if you can please help me. i’m looking for a good broker and i see that you with AxiTrader,
what i would like to know is that, with all the knowledge you have on brokers, what made AxiTrader stand out for you.
i’m currently with a broker called Capital Index and i’ve lost $5000 with them. i now that i know i’m good trader, however overtime i take a trade i always get stopped out no matter how deep may stop loss may be.
is Capital Index a B Book broker and have they been stealing from me all this time.
would really appreciate you input and advise.
regards
Tshepo
Hi Tshepo,
I’ve responded to you via email.
Cheers,
Linton
Help me aswell. I have same problem.
Hi,
Great job here. I have the same question about Axi. Why do they stand out for you?
As far global prime is concerned indeed the receipts from the LP is something i find amazing. But is there any way to cross check with the PL that they refer to your actual order?
Thanks.
Reply from Linton:
Hi Stakos, Had to reply here because the system didn’t allow me to reply to your message.
Yes there is a way to cross check with the LP that they refer to your order. You will see your order currency, your order size, and your order time & price. These 3 will match up exactly with your order specifications (price, time, currency, size) on MT4
Axitrader is a competitive broker, on par with IC markets, global prime. Personally I prefer IC markets slightly more, because of their lower spreads.
Me to!! Please help. Are they A or B book
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dear linton,
so good to bump on your writing, really appreciate it my friend.
I consider between global prime and dukascopy, and wondering, since the commision of global prime quite high.
Whats different between dukascopy Swiss and dukascopy Euro?
Thanks linton
Hey there johnzoe,
Thanks for dropping by! Global Prime’s commissions are actually cheaper than Ducascopy’s commissions (After abundance trading group’s discount: https://www.abundancetradinggroup.com/global-prime-rebates/ @ USD5.50 per rt). In order to get the same commission rate of $5.50 at ducascopy, one has to deposit >25,000 USD. Global Prime’s minimum deposit is USD$500.
On to the differences…both Global Prime and Ducascopy provide traders liquidity via ECN. This is good. Ducascopy is marketplace model (like stock exchange), where traders can see their own bids and offers in the depth of market (when they place a limit order), while bids and offers (limit orders) @ Global Prime are executed as a market order when the price is triggered.
Global prime offers liquidity receipts to traders to show them they who was the liquidity provider who filled their trade. This is to show the trader that Global Prime isn’t trading against them (b book).
Ducascopy unfortunately does not have such a service.
I hope this explanation works for you 🙂
Best regards,
Linton
Hi there, I am a late arrival here.
I am looking at opening an account with INVAST (Sydney office). Looks like a descent firm on the surface. Do you have an opinion? Cheers.
Hey Steve, never too late!
It’s indeed a decent firm. (conversed with them over email before). One of the advantages is you can trade DMA equities CFD together with Forex too (not on MT4 I think, but on their proprietary platform).
I think you’re in good hands Steve. Best of luck!
Linton
Cheers Linton.
The spreads are very reasonable and commission is very attractive at $35 per million round trip.
By the way I love Singapore, I was there a few weeks ago visiting a fund manager friend based in Singapore.
Cheers,
Steve
I feel fortunate to reside in Singapore too. Glad you could come by and experience my country for a short visit 🙂
PS: We also offer discounted commissions @ 27.5 per million for Global Prime (Equally reputable pure A-book, Aussie broker as well). Since you’re with Invast, you’re also in good hands. If in the future you would like the 27.5 per mil rate, just let me know or visit this page: https://www.abundancetradinggroup.com/global-prime-rebates/
Best wishes,
Linton
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Hi Linton
Your website is great interesting, Thanks for all these precious informations…
Below, are they A or B book, please?
Vipro Markets
Fxfinpro Capital
JFD Brokers
One Trade
KEY to Markets
Axiory Eu
Solforex
Synergy Fx
Sorry the list is long…
Did you really try them all or you just checked their licenses?
Thanks a lot for your responses and help.
Papaye
Synergy FX is A book
For the other brokers, you will be able to find out by checking through their customer agreements or legal documents on their website.
Best regards,
Thanks, Linton, for the valuable services you are providing us private fx traders.
Please, I would like to ask, where can I get to buy a Stop Loss/Take Profit EA (or stealth EA)? I have been trading for many years, and I have not seen a broker who does not hunt SL.
Second question: does Ducascopy now use mt4? That has been the reason I
could not sign up with them a couple of years ago.
looking forward to your professional reply.
ONYEKA R.
Hi Onyeka,
Apologies for seeing your message so late.
You can get a stop loss or TP stealth EA here: https://www.ea-coder.com/stealth-ea/
However, to be honest with you, all the brokers on my website do not hunt stop loss. You can consider opening a free account with them.
Ducascopy still does not offer MT4, but they provide a third party bridge to use MT4 to connect to their Jforex platform.
Best regards,
Instaforex is A book or B book ?
In Asia , which broker is A book ?
Hi saren,
Apologies for missing out on your message.
Instaforex is most likely B book, and they will send their consistently profitable clients to A book.
In Asia, Global prime Forex is A book. IC Markets is A book too
Best regards,
Hi Linton,
How to know the broker is an A Book or B Book?
Thanks for your answer.
Hi Rizal,
Apologies for missing out on your question earlier,
Usually if the broker doesn’t advertise they are A book (like Global Prime), they are not pure A book.
Best regards
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Hi Linton,
what about Purple Trading former Axiory broker? Admiral markets? Lynx?
They all seems to have pure ecn model but behind I still think of A+B.
Thanks for your opinion.
Hi Bezousek,
I believe these brokers are not pure A book, because if they were, they would proudly advertise it, like Global Prime
Best regards,
Here is a Descriptive PDF explaining all you relative questions regarding a Forex Brokerage Business Model and Operations,
https://www.slideshare.net/KhaleelMusleh/forex-broker-business-plan
Excellent stuff Khaleel! This is very useful, thanks for sharing!
Hi Linton, many thanks for sharing broker types.
I have another few brokers, could you please let me know are they A or B types?
JustForex
ICM Capital
FBS Inc
InstaForex
Trade24
Ateios Capital (UK Regulated)
Thanks
Hey Hari,
I believe all of them are B book, and they run an A book for those profitable clients, so they don’t lose money trading against you.
You would be better off trading with A book brokers like Global prime.
Just to be doubly sure, you can read their legal documentations on their website, the one most people ticked that they read the terms and conditions of the agreement when they signed up for the broker. In there, it will usually say whether the broker can trade against you or not.
Best regards,
Linton
Hi. We have recently launched our A Book Trading Brokerage, and would like to get our brand out there. Our website is http://www.vtsgold.com.
Let us know what you think.
Regards
Christo
i’m currently with a broker called Capital Index and i’ve lost $5000 with them.
is Capital Index a B Book broker and have they been stealing from me all this time.
Can spredbetting be stp.or only cfd
Hi Moe,
I believe capital index is a B book broker. Usually spread betting brokers are B book or hybrid model
Maybe you should give global prime a try!
Best regards,
Linton
I have been looking at your website very good. On there website they say pure STP. I paid for education 10k through them with learn to trade. They say they will give 50k funded account so if it’s b book that’s wrong. It meens they teach me wrong info.
Can spredbetting be A book or imposible?
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Excellent overview, thank you so much!!
I am with BDSwiss (an FX and binary regulated from Cyprus). I have combed through their Terms and Conditions. I can’t find a section about the counterparty. What section could the counterparty info normally be found?
I did find these terms though. Are they cleverly disguising themselves under the ‘Execution Venue’ term and does it seem like they are B-book only?
“Execution” means the execution/completion of client’s orders on the Company’s trading platform, where the Company acts as the Execution Venue to Client’s transactions.
“Execution Venue” the counterparty for transactions and holder of the Clients securities or other assets deposited.
The Company in accordance to its CIF authorisation is authorised to provide the following
investment services which are governed by this Agreement:
1. Reception and transmission of orders in relation to the Financial Instruments the Company is
authorised to provide.
2. Execution of orders on behalf of clients
9.8. Placing Orders: All Orders in Binary Options with the Company are executed as Market Orders
i.e. at the best available market price.
Hey Bella,
I believe you can find more information about the ‘counterparty’ in the order execution section here: https://www.bdswiss.com/app/uploads/2016/07/BDSwissOrderExecutionPolicy.pdf
3 The Company, when executing client orders will always act as a principal
(counterparty) and this Policy shall apply whenever the Company executes
orders on behalf of the Client.
You can also find all their terms and conditions here: https://www.bdswiss.com/general-terms-and-conditions/
Including their ‘conflict of interest policy’, which says: https://www.bdswiss.com/app/uploads/2016/07/Conflicts_of_Interests_Policy.pdf
The Company’s department whose interests may conflict with clients are:
i. Dealing Room
So I believe they are either a B book, or Hybrid model, because they having a dealing room (if you are pure A book it is not necessary), and it says above that BDswiss will always act as a counterparty when the company executes an order on behalf of the client.
Basically, they are saying they are trading against you.
Hope this helps. Give Global prime or IC Markets a try. Using our promocode link. They are good brokers who don’t trade against you. I will be your introducing broker and if you have any queries with the brokers or IC Markets/Global prime you can always reach me via email too, and I will assist you. [email protected]
Sign up Global prime: https://globalprime.eappform.com/Initiate.aspx?Adviser=FOREX&PCode=ATG
Sign up IC Markets: http://icmarkets.com/?camp=12338
HI
Thank you for this important information.
Is XM A book or B book?
Most likely hybrid model (A+B book)
B book for unprofitable clients, A book for profitable clients.
Cheers,
Linton
HV markets A or B?
Hi Peter,
I believe they are hybrid (A+B book). They are actually a representative or white label of Synergy Financial Markets
Check this page out: https://www.hvmarkets.com/en/legal/. Synergy is hybrid broker
Kind regards,
Linton
What about Rakuten Securities Australia? Are they A or B book brokers?
Hey Billy,
Rakuten should be B book, because they offer fixed spreads.
Cheers,
Linton
Dear Linton,
Very nice article,
I work as a broker (Managed Accounts through LPOA) with Swissquote and Dukascopy banks for almost 8 years now, some FX companies offered me a sharing of the losses, is that legal ? i think that all of them are B Book brokers, the sharing percentage is really persuasive, around 35% on every lost account. but i’m worry if they cover the profits also, and they always try to convince me to start with small amounts between $50k – $100K
i need your opinion about that, kindly advice.
Note that i do manage accounts of almost $4.6 Mil USD with the mentioned banks.
Hi Saleh,
I am shocked to hear that. I think that is legal, since some brokers say there will be a conflict of interest between the client and the broker as the broker can act as a dealer.
This could also be a very Grey legal area and I would suggest you do not take up their offer. Instead I would think long term and grow my clients assets.
If you are very serious about trading with a broker that does not trade against you, you can try Global Prime, or IC Markets.
Open an account with me:
https://icmarkets.com/?camp=12338
https://globalprime.finly.com/c/ATG
Linton
Please is mtrading a A or B book
Hi Caleb,
I believe mtrading is a B book broker.
Cheers,
Linton
Dear Linton
Extremely helpful information …. really many thanks for this.
I have never traded in my life but wanted to enter to FX market.
Need your professional advise in whether Managed accounts are effective and should I prefer to go with them as against trading of my own?
As currently I will not be able to devote as much time as needed.
Also can you refer some best managed account brokers. I reside in Dubai, UAE
Thanks in advance for your support
Hi Abhijit,
I have replied to your email.
Linton
Hi,
Appreciating your efforts in responding the users. Thanks for that.
I read your article about “Guaranteed Stoploss” and came to know that .. if we win a trade means broker lose when we opt for GSLO. Thanks for the clarity.
—————————————–
I have been searching for the Stock Brokers those who provides “Guarantee StopLoss” on US Stocks;
Checked with IG.COM , LCG.COM but stop distance is around 10% on the US stocks which is too expensive if something goes wrong against to my trade;
I am unable to find the stock brokers who provides “Guarantee StopLoss” with low stop distance like less than 5%. Even many of the stock brokers not offering GSL. I am just afraid of stock slippage as I lost earlier.
**Could you please help me with stock brokers who provides “Guarantee StopLoss” with low stop distance on US stocks.
Thank You in Advance
Raj
INDIA
Hi Raj,
In general, guaranteed stop loss is a losing game for traders.
The brokers are not stupid to give you a guaranteed stop loss for a cheap price. They usually count in the expected volatility of a big move (usually <10%) before they determine how far your GSL has to be.
Think of GSL as buying an insurance – the person who buys the insurance never wins, but he has a peace of mind and has hedged his risk
My suggestion is try not to buy stocks that are on a downtrend – this is where market can gap down, and cause big losses (which requires a GSL)
Also, try not to buy stocks near resistance (this is also where stocks can gap down and cause big losses, requiring a GSL)
Instead, buy stocks on an uptrend, or when in a range, buy near the support.
Greetings from Ukraine Linton!
Justing writing to thank you for your website(no reply required as you must be busy).Very helpful guidance.
You have mentioned that IC markets are true ECN but they do offer 500:1 leverage for their clients.
On your article, you said that the true ECN brokers will not offer more than 100:1 leverage.
Since IC markets offer 500:1 leverage so they are not true ECN or these days, the brokers offer even 500:1 leverage to clients even though they are offering the true ECN?
Also I just wanted to make sure I understand the regulation correctly, in the US, the ECN account is offered for only high net-worth individual, minimum $100,000 trading size must be over 50 lots a day but it looks like other brokers in Australia and UK? The reason is for this is the different regulation the US government and others, is that correct?
Hi Matt,
IC Markets does indeed offer 500:1 leverage if your account has a smaller balance. As your balance increases to more than a certain amount, the leverage offered will be lower. (because offering higher leverage on a high balance means the broker is subject to high risk in the event of a margin call – See alpari during the swiss crash 2015). As long as their leverage offered falls with higher balances, this is consistent with being an A book.
In a B book, the broker will offer higher leverage on larger balances, because studies have shown that higher leverage leads to trades blowing their accounts faster. A safe amount of leverage is 10:1. This doesn’t mean you have to ask your broker to reduce your leverage to 10:1, but you just have to remember that if you have $100,000
balance, then you can only open a maximum of 10 standard lots (1 million)
For your question regarding the US ECNs needing $100,000 minimum balance, I think that is just a broker marketing technique of naming different account types.
For me, when a broker says they are ECN, it means they must route my trades to the ECN they are connected to to fill my trades. that’s all. Not necessary to have a minimum balance (unless the ECN they are connected to has specific requirements, but it usually has something to do with minimum size per trade. For eg, you can only send 1 lot or more trades to the ECN.)
My 2 cents.
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Hello Linton,
I’ve been reading through all your inputs above differentiating A/B book brokers. I have to first say you’re really doing a wonderful job here, and it is really kind of you.
I’ve been previously trading with Tickmill FCA for over a year, I have to say they are quite a decent broker. Due to the ESMA new regulation in the Europe reducing all brokers’ leverage down to 1:30, they have suggested me to switch over to their Seychelles’s branch (for better leverage), but I feel insecure with the brokers that are operating in those funny islands..
I believe there are many people like myself looking into Australian brokers due to the ESMA regulation. I’ve been looking up on IC Markets, and Global Prime, both of them seem to receive very good reviews on the internet.
I believe Global Prime is a purely A booking broker, but I’m not sure if IC Market is a purely A Booking broker, or could they be a hybrid A + B? They seem too offer leverage 500:1, and I have received calls from their representative that is based in Cyprus, instead of Australia…
Nevertheless, I do agree with you that regardless A or B booking broker, as long as they do not manipulate your trades, I am absolutely fine with it as well.. My next question would be, from your experience, can we tell if the B Booking broker is or is not manipulating? And am I right to say that it is illegal to manipulate the trades, since they are regulated and being audited by the auditors?
Apart from the above 2 brokers, i was reading up this Rakuten Securities which seem pretty new to the market, and it is a subsidiary to the Japanese Rakuten internet company. I believe Japanese companies are famous for their integrity in doing businesses, however, I’ve spoke to the representative and they do admit that their are market maker, and the provide fixed spread without slippage 95% of the time. They do STP to their internal Liquidity first, before deciding whether or not send it to their LPs. So this seem like they are “betting” against us (or better to say that they are providing the liquidity to us since they are a market maker anyway), but i’m also worry if they will manipulate our trades, since our trades have to go through them first, instead of directly to the market…
Again, if they don’t manipulate, I’m fine whether if they are A or B or A+B Booking.. But i’m just wondering if they are allow legally manipulate our traders? “Manipulation” sounds illegal by its definition already, but what if like a sudden sell/buy in massive volumes (being a Market Maker/LP, it seems like a normal thing to do) to push the market and cut our SLs off (like a stop hunting), before heading to our directions that we want and so on…
Thanks a lot mate, looking forward to your advice!
Best Regards
Nick
Hi Nick,
Can we tell if B book brokers are manipulating – Some manipulation is easy to tell, some are not
Easy to tell ones:
Change your entry price (no one does that – downright illegal)
Harder to tell ones:
Asymmetric slippage – Whenever you place a trade, there is a chance the price will move from the time you place your order till it reaches the broker’s server and it is filled. Asymmetric slippage means, whenever price moves in your favour, the broker will fill you at your requested price (without positive slippage),but when there is a negative slippage, the broker will pass it on to you. This is the thing that caused FXCM to be kicked out of the USA.
You can manually try and measure it, but it is hard. Nonetheless, I don’t believe brokers are doing it, else they will be banned from operating in their respective jurisdictions. The bigger named jurisdictions should be safe (ASIC, UK).
Delay to fill your order: You can tell this by downloading the execution speed test EA from this page: https://www.abundancetradinggroup.com/trade-execution-speed-tester/. They should be similar to other brokers who also have servers in the same location (i.e. both IC markets and Global prime have servers in New York)
Both are illegal by the way. (all trade manipulation is illegal)
In general, I would have a peace of mind and go for the A book brokers, rather than Fixed spread ones.
And your point on pushing the market to cut your stop loss – In my opinion, no retail broker does this. To push the market requires millions of dollars just to hunt your stop, which is probably a few lots. It doesn’t make financial sense.
It is possible banks do this, but it is because they have client orders to buy at the ‘fix’ or the close for the day. So the traders start buying proprietary positions before the fix, and at the ‘fix’ they sell their positions to clients who want to buy at the ‘fix’ and make a profit.
The reason why your stop seemingly gets it, then price immediately reverses is not because someone is hunting your stop. It is probably because there are many stop orders there (institutional clients included), and the bank traders know where all the orders are, so they push the price there, hit the stop orders, make a few pips, and then once there is no one pushing the price anymore, the price eventually reverses.
Another reason is just due to pure volatility – Volatility in its nature means it is a mean reverting environment. So if you notice there is volatility, you should always look to fade (trade against), the volatility move, because it is likely it will mean revert very soon.
Hi Linton,
Thank you very much for the quick feedback, appreciated much! I’ve learn a lot here, I guess I would take the A book brokers for peace of mind like you mentioned. Most probably to go for IC Markets or Global Prime. With IC providing slightly more flexible leverage, probably just go with them at the moment, although I still feel slightly strange why they were calling me from Cyprus.
By the way, I believe you’re from Singapore. I’m from your neighboring country, Malaysia :).
Thanks mate! I will continue to follow your page 🙂
Nick
Hi Neighbour 🙂
I believe it is because some of IC Markets support team work remotely from Europe.
That’s how they answer queries 24 hours a day.
Sure, Do open an IC Markets account with me – we have arranged a 22% commission discount for True ECN accounts, and 8% commission discount for cTrader
Open an account with the discount here: http://icmarkets.com/?camp=1441
This is our page which has the same cashback offer: https://www.abundancetradinggroup.com/ic-markets-rebates/
Hey, Linton I’m From India. I Have Opened An Anccount with Hantec Global Ltd. Is This One A Or B Book!
Thank You!
Hi Krisha,
I believe they are B book.
Cheers,
Linton
Hi Linton
My name is Hendra,
I just join this new broker. Can you check whether he is A book or B Book.
http://www.fullertonmarkets.com
Thank you
Hi Hendra,
Most likely B book. In the order execution policy, it states:
https://www.fullertonmarkets.com/terms-and-conditions
2.5 The Policy shall apply whenever the Company executes orders on behalf of its clients.The Company will always act as principal (counterparty) when executing client orders. Despite the fact that the Company takes every reasonable step to obtain the best possible result for its clients, it does not guarantee that when executing a transaction, the client’s price will be more favourable than one which might be available elsewhere.
Meaning that they are the counter party to your orders, not the agent (A book) who acts on your behalf.
Furthermore, they have negative balance protection (link below), which is a service only a B book broker can give, because they have to take the other side of your trade in order to provide negative balance protection
https://www.fullertonmarkets.com/fullerton-edge
Hope this helps. I encourage you to explore Global prime and IC markets, who are A book brokers. I have been using them since 2013.
We have arranged a discounted commission rate with them of $5.50 per round turn (usual $7 per rt), if you’re interested.
The link to open a Global Prime account with our rate of $5.50 per rt is here: https://secure.globalprime.com.au/c/ATG
The link to open an IC Markets account with our discounted rate of $5.50 for MT4, MT5, or 8% commission discount for cTrader is here: http://icmarkets.com/?camp=1441
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Is jfdbrokers Abook broker?
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ICM CAPITAL
Z.COM
LBLV
AVATRADE
ROBOFOREX
AMARKETS
ACTIVTRADES
EXNESS
NORD FX
IS A BOOK OR B BOOK?
Hi,
I believe all of them are Hybrid or B book.
You can also tell whether they are hybrid/b book or not too. If they offer negative balance protection, it is highly likely they are a B book/hybrid broker. This is because the only way they can offer you negative balance protection is to take the other side of the trade, such that in the even you lose, they win, so they are able to forgive your losses.
However, if they don’t take the other side, and they are just an agent facilitating your trades(A book), then when you incur negative balance, they actually owe their prime broker/liquidity provide/panel of banks your negative balance also, so they need to request you pay the negative balance so they can pay their liquidity provider.
Hope this helps!
Best,
Linton
MY QUESTION IS : CAN THE BROKER PLAY ON THE CHART TO MAKE YOU LOSE ,I HAVE SEEN A VIDEO BEFORE ABOUT MT4 AND THE POSSIBILITY TO PLAY ON THE PRICE TO WHICH POINT THAT IS TRUE ???
Yes. MT4 software allows for that. I’ve also seen that video you are talking.
However, no broker would do that. Basically that is outright illegal, and if their regulator (especially the stronger ones) like ASIC, UK FCA audit and find out they have been manipulating price, they might lose their licence.
So they would not do this, as they would risk their entire business just to earn some money from 1 customer.
Also, the customer is also not foolish. He knows that his price has been manipulated and can compare his chart with other free forex chart sources like tradingview.com and know whether his price has been manipulated or not.
Best,
Linton
can the traders deal directly with prime brokers ???? many thanks
Hi,
Yes, but you need a large amount of capital in order to open a prime brokerage account. somewhere around 1mil USD.
To be honest, there is no advantage in opening a prime broker account, unless you do very high volumes or you need physical delivery of the currency.
Because the prices that good forex brokers give, like Global Prime, IC Markets, Axitrader all have sometimes even better spread than 1 prime broker, because they aggregate multiple prime broker’s pricing, via ECN
Hi Linton,
Thank you for your explanation.
I’d like to know if a broker with B book is more likely to commit fraud.
I heard that B book is vulnerable to manipulate in purpose of scam.
Have you heard about MetaTrader4 or 5 made and provided by MetaQuotes, a russian software company?
Is it necessary to trade foreign exchange?
I’d believe the “real” or “live account” marked in the MetaTrader4 is true?
Can you tell me how I can prove that a broker or user manipulates data or trading details?
Best regards,
Jin
Hi Jin,
In general, B books from properly regulated jurisdictions are less likely to do so. Like ASIC or fca UK
In the olden days of 2006 when forex first started, they could manipulate your trades in MetaTrader 4 by changing the price value to create a spike in price, to stop your trade out.
But that is highly illegal. These days if they do so, like FXCM US, who have since been kicked out of the US for doing such things, can perform asymmetrical slippage. This means, if the trade has positive slippage, the broker keeps it, but if it is negative slippage, they pass it on to the client.
Real or live account in MT4/5 means the trade has been funded by real funds. There are paper money accounts available in MT4/5.
Alternatively, you can trade with interactive Brokers, or cTrader as alternate platforms.
Not sure what you mean by is it necessary to trade foreign exchange. Do you mean in the context of earning a return on capital?
You can tell if the broker manipulates your trade with asymmetrical slippage by recording each of the positive or negative slippage in your trade and then averaging them out. They should roughly equal to 0
Hi Linton,
I wonder if only MT4 is a necessary software to trade foreign exchange. I think it is possible to trade through many softwares. Is it exclusive software for trading FX? And do I have to make an agreement with MetaQuotes, a russian software company?
I don’t believe my broker. He has been insisting my money is still safe for 3 years because the status on MT4 account is marked as “real”. Even though he showed me the captured screen, he didn’t fail to return my money and he was arrested for fraud. That’s why I can’t believe the word of “real”, “live”, “main” or “prod” on MT4 account is true.
Can you show me what steps he cheated on me regarding MT4? What should I do to check my real money I sent? If he kept my money, I think he could show me his bank statement or account balance linked with MT4. Am I right?
Hi Jin,
MT4 is not the only tool to trade forex. You can use Brokers with cTrader, like IC markets, or interactive Brokers (IB), which is huge globally also.
Both have very competitive pricing, with IB being cheaper. IB’s platform is less user friendly though.
Firstly, sorry to hear about your loss. I can’t show you how he tricked you on the MT4 side because I don’t have access to MT4 backoffice software (only Brokers have it)
I would suggest you always put your money with regulated Brokers in proper jurisdictions, like australia(asic), Singapore (Mas), or UK (FCA), so that Brokers cannot just lie about having your money with them, when in reality it is not there. I believe these jurisdictions will revoke the Brokers license if such fraudulent actions were discovered. Usually Brokers in such proper jurisdictions are also audited and when there is a mismatch between the client funds they publish in their system, vs the funds they have in their bank, the Auditors will refuse to sign off that this Company has proper accounting practices because such actions are outright fraudulent.
Sorry for the slow reply. Feel free to join our telegram group as I am trying to build a community to help each other avoid such pitfalls, and share advice on FX trading, broker selection, etc https://t.me/joinchat/DgqiahUk0klh4ePxMeqm1w
Hello Linton,
Thank you very much for the quality content!
Is IC Market still a A or Hybrid broker? Because I became suspicious after the accounts are not labelled as “True ECN” anymore but instead as “Raw Spead”.
Any advice?
Thank You!
Hi Beginner,
I would have to look through the legal documents on ic markets website, to look for any disclosures if there any conflicts of interest, or that it states if ic markets are able take positions against clients.
The last time I looked through it, there were no such conflicts of interest but I would have to look through it again to give you a proper answer.
You can find it here: https://www.icmarkets.com/au/en/company/legal-documents
Look at terms and conditions, product disclosure, and finance services guide
Very Helpfull information, Av been trading with Templer Fx and they manipulate my trades and find away to take my funds, This site Is an Eye oppener
Hi There,
Great Article.
My question is on the Liquidity providers, are they purely B book then?
Thanks
Hi Jasveer,
It would depend how much risk they want to hold inhouse and how much risk they want to offload. You can think of it like insurers. When an insurer takes on too much risk and reaches its risk limit, they offload the risk to someone else called re-insurer. For liquidity providers it is the same.
It is really a helpful blog to find some different source to add my knowledge.
Hey there, how about FXTM? I am trading with their ECN account and sometimes I do get positive slippage in my favour. Is this a sign that I am trading with a pure ECN NDD broker? thanks in advance.
Hi Tesh,
Firstly, let me clarify that a broker can be a hybrid (A and B book) and still call itself an ECN NDD broker as long as it channels some trades into the ECN. Most brokers use automated dealing, so it can technically call itself ‘NDD (non deal desk)’.
There are a few reasons why I believe FXTM is not a pure A book broker.
1. If they were pure A book, it would be a big selling point and they would tell you on their website, like Global Prime does.
2. In their Client Agreement, https://www.forextime.com/docs/fxtm-client-agreement, it states:
“7.2 The Client consents to and authorizes the Company to deal with or on behalf of the Client in
any manner which the Company considers appropriate, notwithstanding any conflict of interest
or the existence of any material interest in a transaction, without prior reference to the Client”. This leads me to infer that some trades may be B booked, while others A Booked.
Again, I emphasize that hybrid or B book does not equal to a ‘bad broker’ or poor execution. In fact, as you experienced, a hybrid broker may sometimes experience better execution if the trade is B booked, because it does not need to be executed in the market, hence it has a ‘perfect fill without slippage’, or may even have positive slippage passed on to you.
B book or hybrid brokers may also give you great trading conditions, to improve their offering on the market. However, ultimately, A book brokers are more incentivized to ensure your success as compared to B book/Hybrid, purely because A book brokers win only when you win.