Best Forex Brokers
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Key Takeaways
- A-Book (STP): Broker passes your trades to liquidity providers. The broker profits from spreads/commissions, not your losses.
- B-Book (Market Making): Broker takes the other side of your trade. When you lose, the broker profits.
- Hybrid Model: Most brokers use both—A-Book for profitable traders, B-Book for losing traders.
- Neither is "Bad": Well-regulated B-Book brokers are safe. The key is proper regulation and fair execution.
- Transparency Matters: Brokers like Pepperstone and IC Markets are known for A-Book execution.
Table of Contents
What is A-Book and B-Book?
A-Book and B-Book describe how a forex broker handles your orders internally. This determines whether the broker has a financial interest in your trading success or failure.
Understanding this distinction is crucial for traders who want to ensure fair execution and avoid potential conflicts of interest.
How A-Book Execution Works
In the A-Book model (also called STP or No Dealing Desk):
- Your order is passed directly to liquidity providers (banks, hedge funds).
- The broker makes money from spread markup or commission—not from your losses.
- No conflict of interest: the broker has no incentive for you to lose.
- Typically offers variable spreads that fluctuate with market conditions.
- Common with ECN brokers.
How B-Book Execution Works
In the B-Book model (also called Market Making or Dealing Desk):
- The broker takes the opposite side of your trade internally.
- When you buy, the broker effectively sells to you; when you sell, the broker buys.
- If you lose, the broker keeps your loss as profit. If you win, the broker pays you.
- Often offers fixed spreads and guaranteed execution.
- Creates a potential conflict of interest if not properly managed.
A-Book vs B-Book Comparison
| Feature | A-Book (STP/ECN) | B-Book (Market Maker) |
|---|---|---|
| Order Handling | Passed to LPs | Internalized |
| Broker Profit Source | Spread/Commission | Spread + Your Losses |
| Conflict of Interest | None | Potential |
| Spreads | Variable, tighter | Often fixed |
| Execution Speed | Depends on LP | Usually instant |
| Requotes | Possible | Rare (broker controls price) |
| Best For | Scalpers, large accounts | Beginners, small accounts |
How to Tell Which Model Your Broker Uses
- Account Types: "ECN," "Raw," or "STP" accounts are typically A-Book. "Standard" or "Fixed Spread" accounts are often B-Book.
- Execution Reports: Some brokers (like Pepperstone) publish execution statistics showing how orders are routed.
- Regulation: Well-regulated brokers must manage conflicts properly regardless of model.
- Ask Directly: Contact support and ask about their execution model—reputable brokers will explain.
See our ECN vs STP vs Market Maker guide for detailed execution model comparisons.
Frequently Asked Questions
What is A-Book forex broker?
An A-Book broker passes your trades to liquidity providers. They profit from spreads or commissions, not your losses. No conflict of interest.
What is B-Book forex broker?
A B-Book broker takes the opposite side of your trade. When you lose, they profit. When you win, they pay. Creates potential conflict of interest.
Is B-Book illegal?
No. B-Book (market making) is legal and regulated. Most retail brokers use it. The key is proper regulation and fair execution policies.
Do B-Book brokers trade against me?
Technically yes—they take the opposite position. But well-regulated B-Book brokers must execute fairly. They can't manipulate prices to make you lose.
Which is better: A-Book or B-Book?
Neither is inherently better. A-Book offers transparency but may have higher costs. B-Book offers fixed spreads and guaranteed execution. Choose based on your trading style.
How do I know if my broker is A-Book or B-Book?
Check your account type (ECN/Raw = A-Book), ask customer support, or look for execution statistics. Most brokers use a hybrid model.
What is a hybrid broker?
A hybrid broker uses both models—A-Book for profitable or large-volume traders, B-Book for small or losing traders. Most retail brokers operate this way.
Do ECN brokers use A-Book?
Yes. True ECN brokers use pure A-Book execution, routing all orders to liquidity providers.
Why do most brokers use B-Book?
Because most retail traders lose money. B-Book is more profitable for brokers and allows them to offer lower minimum deposits and fixed spreads.
Is Exness A-Book or B-Book?
Exness uses a hybrid model. Their "Raw Spread" accounts use more A-Book execution, while Standard accounts may use B-Book for smaller trades.
Can B-Book brokers manipulate my trades?
Regulated B-Book brokers cannot legally manipulate trades. They must offer fair prices based on market quotes. Unregulated brokers, however, can potentially manipulate.
Should scalpers use A-Book brokers?
Yes. Scalpers need tight spreads and fast execution without conflict of interest. A-Book/ECN brokers are best. See our ECN broker list.
