Most traders are familiar with brokers who act as intermediaries on the forex market but do not know much about the types of brokers. Market Maker is another type of broker with a favorable and unfavorable investor. In this article, we explain what a market maker is. How helpful, including both the advantages and disadvantages of Market Maker.

Definition of Market Maker

Market Maker forex is a broker that centralizes client information and employs personnel to maintain client information. Every order is not sent directly to the central market, and the price displayed is not the actual market price but rather the price set by the broker. Simply put, they are brokers who help the market become more liquid and move within a reasonable range, not manipulation caused by stock manipulators.

The Role of Market Maker

The main role of Market Maker

1. Provide liquidity in the market

A liquid market is a good market. In contrast, if the market is quiet, no transactions will occur. When the market is too quiet, the Market Maker acts as a trader to create volume within the market and can trigger buying and selling in the market. Some traders may presume that it is similar to stock manipulation, but the difference is intent, as it will result in market liquidity when the market has demand and supply.

2. Demand-Supply in the market

The price of each currency in the market will fluctuate, and the price will rise and fall as the market maker allows retail traders to see the currency's value and decide to trade in that currency. On the contrary, trading in the market may be quiet as no one comes to trade or make profits.

Advantages of Market Maker

1. Create demand and supply on the Forex market.

2. It affords investors the possibility of profit.

3. Maintains market movement.

Disadvantage of Market Maker

Even though market makers can benefit traders on the forex market and cause market movements, traders still suffer from this process.

1. Traders are insecure because they cannot determine whether or not they are being scammed because the broker sets the price.

2. Victimize beginner traders due to their inexperience in forex trading.

3. Make the price different from the actual market price because the broker does not send buy-sell orders directly to the central, thus making the price different from the actual market price.

Conclusion

In conclusion, in order to become proficient in forex trading, traders should educate themselves on the forex market and regularly practice trading techniques.

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