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Is Admirals (Admiral Markets) An ECN Broker? or Market Market? Review broker?
Is Admirals (Admiral Markets) An ECN Broker? or Market Maker? Review Broker
In the world of online trading, brokers play a crucial role in facilitating transactions between traders and the financial markets. When choosing a broker, it is essential to understand whether they operate as an ECN (Electronic Communication Network) broker or as a Market Maker. In this article, we will dive deep into the operations of Admirals (formerly known as Admiral Markets), a well-known online trading platform. We will review its offerings, assess whether it functions as an ECN broker or Market Maker, and help you make an informed decision.
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What is an ECN Broker?
Before analyzing whether Admirals is an ECN broker or a Market Maker, it's important to understand the difference between these two types of brokers.
An ECN broker operates by providing direct access to the interbank market, enabling traders to trade directly with other participants, including financial institutions, banks, and liquidity providers. With an ECN broker, the broker does not take the opposite side of your trade. Instead, it acts as an intermediary, matching buy and sell orders based on available liquidity.
Key features of an ECN broker include:
No Dealing Desk (NDD): ECN brokers do not have a dealing desk. This means there are no manual interventions, ensuring that orders are executed at the best available price.
Tight Spreads: Since orders are matched directly with liquidity providers, ECN brokers offer tight spreads, often ranging from 0 pips, though they may charge a small commission per trade.
Transparency: Traders can see real-time prices from multiple liquidity providers, providing a high level of transparency in trade execution.
What is a Market Maker?
A Market Maker broker, on the other hand, operates differently. Rather than connecting traders directly with other market participants, a Market Maker acts as the counterparty to a trader’s order. In simple terms, the broker takes the opposite side of the trade, providing liquidity themselves, and may adjust the price to ensure that their positions are profitable.
Characteristics of a Market Maker broker include:
Wider Spreads: Market Makers tend to offer wider spreads compared to ECN brokers, as they adjust prices to maintain their own profit margins.
Dealing Desk (DD): Market Makers generally have a dealing desk, meaning they can intervene in the order execution process.
Requotes: Sometimes, Market Makers may requote prices if they cannot fulfill a trade at the quoted price, leading to potential delays in execution.
Now that you have an understanding of ECN brokers and Market Makers, let's dive into a detailed review of Admirals to determine its nature.
What is Admirals (Admiral Markets)?
Admirals, formerly known as Admiral Markets, is a global Forex and CFD broker offering access to various financial markets, including Forex, stocks, indices, commodities, and cryptocurrencies. With a history dating back to 2001, Admirals has established itself as a prominent broker, catering to both retail and institutional traders. It operates in over 100 countries, providing a range of account types, trading platforms, and educational resources.
Admirals' Trading Platforms
Admirals provides traders with two major platforms: MetaTrader 4 (MT4) and MetaTrader 5 (MT5). These platforms are widely popular due to their user-friendly interface, powerful charting tools, and automated trading capabilities. Both platforms support Forex, commodities, indices, and cryptocurrencies trading.
The MT4 platform is the industry standard, preferred by most traders for its simplicity and robust features. However, the MT5 platform offers more advanced features, including additional timeframes, more order types, and an economic calendar.
Does Admirals Operate as an ECN Broker?
One of the main questions traders ask when reviewing any broker is whether it functions as an ECN or a Market Maker. In the case of Admirals, the broker offers both types of execution models, depending on the account type and the instruments being traded.
Admirals offers ECN-style trading on its Admirals Zero Account, which provides direct access to the interbank liquidity pool. The Zero Account offers tighter spreads and more transparent execution by connecting traders directly to liquidity providers. However, even though the Zero Account operates with ECN execution, the broker still applies a small commission on each trade.
In addition to the Zero Account, Admirals also provides Standard Accounts, which operate with Market Maker-style execution. In these accounts, the broker acts as the counterparty to trades, and spreads are typically wider compared to the ECN account. The absence of commissions and lower minimum deposit requirements may appeal to new traders.
ECN Execution on the Zero Account
Admirals' Zero Account offers direct market access (DMA), making it suitable for advanced traders who want to benefit from tight spreads. ECN execution allows for fast and transparent trade execution, and traders can access the liquidity pool provided by top-tier financial institutions.
As an ECN broker, Admirals guarantees no requotes and fast order execution, as orders are processed without any dealing desk intervention. This is ideal for scalpers and day traders who rely on fast, accurate trade execution.
Market Maker Execution on Standard Accounts
For those who prefer not to pay commissions or those just starting out, Admirals’ Standard Accounts offer Market Maker-style execution. As a Market Maker, Admirals may widen spreads during periods of high volatility to protect itself from potential losses.
The key difference with Market Maker execution is that the broker may profit if a trader loses a trade. However, this does not necessarily mean that the broker manipulates prices or behaves unfairly. Market Makers must still adhere to strict regulatory guidelines to ensure fair trading practices.
Admirals Trading Conditions
When choosing a broker, traders must consider factors such as spreads, commissions, leverage, and available markets. Admirals offers competitive trading conditions on both its ECN and Market Maker accounts.
Spreads and Commissions
Zero Account (ECN): The spreads on the Zero Account are typically very tight, often starting from 0.0 pips on major currency pairs such as EUR/USD. However, the broker charges a commission of around $3.50 per lot on each trade.
Standard Account (Market Maker): On the Standard Account, spreads are wider compared to the Zero Account but there are no commissions. The spreads on major currency pairs like EUR/USD typically start from 1.0 pip or more.
Leverage
Admirals offers leverage on both account types, with a maximum leverage of 1:500 available on the Standard Account and up to 1:30 on the Zero Account for retail clients. Higher leverage allows traders to control larger positions with a smaller initial investment, but it also increases the risk of significant losses.
Available Markets
Admirals offers access to a wide range of markets, including:
Forex: Major, minor, and exotic currency pairs.
Stocks and Indices: Shares of major global companies and indices like the S&P 500 and Dow Jones.
Commodities: Precious metals, energies, and agricultural products.
Cryptocurrencies: Popular digital currencies like Bitcoin and Ethereum.
Regulations and Security
Admirals is regulated by several top-tier financial authorities, including:
Financial Conduct Authority (FCA) in the UK
Estonian Financial Supervisory Authority (EFSA)
Cyprus Securities and Exchange Commission (CySEC)
These regulatory bodies ensure that Admirals adheres to strict financial standards, providing traders with a secure trading environment. In addition to regulation, the broker uses SSL encryption to protect personal and financial data.
Pros and Cons of Admirals
Pros:
Variety of Accounts: Admirals offers both ECN and Market Maker account types, catering to different types of traders.
Regulation: Admirals is regulated by top-tier authorities, ensuring a high level of security.
Competitive Spreads: The Zero Account offers tight spreads, ideal for scalpers and active traders.
Educational Resources: Admirals offers a variety of educational tools and resources for traders at all levels.
Multiple Platforms: The broker provides access to both MT4 and MT5, allowing traders to choose the platform that suits them best.
Cons:
Commissions on ECN Accounts: While the Zero Account offers tight spreads, traders must pay commissions, which could add up over time.
Wider Spreads on Standard Accounts: Traders with Standard Accounts may find the spreads to be wider than those offered by ECN brokers.
Limited Cryptocurrency Offerings: Although Admirals offers crypto trading, the selection is not as extensive as some other brokers.
Conclusion: Is Admirals an ECN Broker or Market Maker?
Admirals is a versatile broker that offers both ECN-style trading on its Zero Account and Market Maker-style trading on its Standard Accounts. The choice between these account types depends on your trading style, experience, and preferences.
If you’re looking for tight spreads and direct market access, the Zero Account with ECN execution is a great option. On the other hand, if you prefer to trade without commissions and are okay with wider spreads, the Standard Account offers a suitable solution.
Ultimately, Admirals is a solid choice for both beginner and experienced traders. Its combination of competitive trading conditions, advanced platforms, and strong regulatory oversight makes it a trustworthy broker in the competitive online trading space. Whether you prefer ECN execution or Market Maker execution, Admirals has options to meet your needs.
