## Three main models
### Market Maker (MM / Dealing Desk / B-Book)
The broker **is your counterparty**. You win = they lose; you lose = they win.
Surface conflict of interest. But large MMs (IG / CMC / OANDA) run internal hedging pools: long clients offset short clients, residual net exposure hedged externally.
Profit sources:
• Spread (wider, 1-2 pip)
• Swap differential
• Loser losses (residual pool)
### STP
Broker forwards your order **straight through** to upstream LPs. Profit: spread markup (+0.3-0.8 pip on raw LP quote).
### ECN
Broker drops your order into a **liquidity pool** with other ECN participants (banks, hedge funds, other retail) — direct matching.
Profit: **fixed commission** ($3-7 round-turn per standard lot), zero spread markup.
See EUR/USD quoted 1.0870.0 / 1.0870.2? That's ECN (5-digit pricing).
## How to pick
• **Day-trading / scalping** → ECN (tight spread + low commission)
• **Swing trading** → STP (moderate spread, no commission, low multi-day cost)
• **Beginner + small size** → MM (no commission + educational resources)
## Spotting lies
Many brokers claim "True ECN" but are STP/MM hybrids. Tells:
• True ECN always offers Level 2 (depth-of-market)
• True ECN charges commission (how else does it earn?)
• True ECN doesn't restrict scalping / HFT
