ECN Broker Versus Market Maker – Which one is better?

And there is a ton of differences between the two which every forex trader must be aware of since his choice of a broker to use for his trading activities will greatly impact his trading performance.
Let us focus first on the more notorious of the two – the Market Makers. These are brokers who have a ready buy or sell order for every order passed through them and will process any transactions immediately based on the price they quote on their dealing desks. They set their own bid and ask price and build in their profit into the spread or the difference between the bid and ask price.
They often act as the counterparty to the trades placed with them, matching every order be it a buy or a sell with an opposite order of their own. This, in effect, is tantamount to trading against their own clients.  There are times, though when they try to hedge orders by passing them on to other liquidity providers. With their own interest in mind, a market maker may hold on to a position if the market is favorable to their position as counterparty to a trade and pass it on to other liquidity providers if the market is unfavorable to the position they hold.
Market makers are also known to manipulate prices on thin volume markets just to trigger the trading stops of their clients or prevent their clients from reaching their set trading objectives. They are also known to make horrendous quotes which are several pips away from prevailing market quotes.
In contrast, ECN broker merely passes on prices coming from multiple liquidity providers like banks, market makers, and other traders belonging to the network. They collect the best quotes from these market participants and post them on their trading platforms for their clients to trade on.
Unlike market makers, they don’t make money on the spread and because of this, they are able to provide very tight spreads and better bid/ask prices sourced from different liquidity providers belonging to the same network. They also don’t trade against their own clients. Instead, they merely match all orders with opposite orders coming from other clients within the company while the unmatched orders are passed on to other liquidity providers in the same network.
The only drawback that working with a broker of an electronic communications network entails is that they usually require larger deposit amounts to be able to trade with them whereas market makers have smaller initial deposit requirements.
The choice of broker you use may spell the difference between making money and getting burned trading the currency market. The ECN brokers may give you the best quotes all the time, but opening an account with them may be prohibitive for upstart traders with limited capital to start with. The market maker on the other