Things to Avoid with FOREX Brokers
Requoting. This is the practice of giving you a different fill from what you were given by your online execution. I am happy to report that while requoting still occurs, its frequency has dropped substantially. You may thank both competition and NFA Compliance Rule 2-43, which limits the times and circumstances that prices can be requoted by brokers.
Market makers uniformly deny stop harvesting -- the practice of running prices to elect a stop-loss order.
Brokers will often widen or balloon the bid-ask spreads on currency pairs when the markets are quiet and illiquid and just before and after a news release. This happens on both market maker and ECN trading platforms. It is a natural occurrence for ECNs, and market makers do it to protect themselves and manage their book. How much it happens and how wide the ballooning becomes are the questions of where effective management ends and profit incentive begins. If you know when and under what circumstances it will occur, you can act accordingly and not be hurt or surprised.
By Michael Duane Archer