When you click “Buy” on your MT4 terminal, where does that trade go? The answer depends entirely on whether your broker operates an A-Book or B-Book model.
The A-Book Model (STP/ECN)
In an A-Book model (Straight Through Processing), the broker acts purely as an intermediary. They route your trade directly to a liquidity provider (banks or hedge funds).
- How they make money: By charging a commission or slightly marking up the spread.
- Conflict of Interest: None. They want you to trade as much as possible, and they don’t care if you win or lose.
The B-Book Model (Market Maker)
In a B-Book model, the broker takes the opposite side of your trade. They do not send your order to the real market.
- How they make money: When you lose a trade, your loss is the broker’s direct profit.
- Conflict of Interest: Massive. Since 90% of retail traders lose money, B-Booking is highly profitable. However, if a trader is consistently profitable, they become a liability to the broker.
How to Spot a B-Book Broker
Unscrupulous B-Book brokers may use plugins (like the infamous “Virtual Dealer”) to induce artificial slippage, widen spreads during your trades, or delay execution to ensure you lose.
If you are a consistently profitable algorithmic trader, you MUST trade with an A-Book / True ECN broker. Read our Broker Reviews to find transparent, regulated institutions.