What is A-Book Execution?

What is A-Book Execution?

A-book execution is a brokerage model where your order is passed straight to external liquidity providers. The broker acts as an agent, charging commission or a small mark-up instead of trading against you. Because the broker does not benefit from your losses, this setup closely aligns the broker’s incentives with the trader’s success.

Key Traits

• Agency model: Orders are routed to banks, ECNs, or prime brokers rather than being internalized.
• Tighter pricing: Spreads reflect interbank quotes plus a transparent fee.
• Fewer conflicts: No dealing desk means fewer requotes and less chance of quote manipulation.
• Compliance friendly: Top-tier regulators often prefer true STP/ECN routing.

Evaluating A-Book Brokers

• Check regulation: Licenses from the FCA, ASIC, or CFTC add credibility.
• Compare costs: Add the commission to the raw spread to see your true cost per trade.
• Look for deep liquidity: Multiple Tier-1 LPs reduce slippage around news.
• Study reviews: Experienced traders can describe whether execution behavior matches A-book claims.

Common Pitfalls

• “Hybrid” marketing that internalizes certain flow—read routing disclosures carefully.
• Commission tiers that offset spread gains—calculate all‑in cost.
• Poor infrastructure negating routing benefits—monitor latency and slippage.

When to Choose A‑Book

If your strategy depends on tight spreads, fast fills, and low intervention—scalping, arbitrage, event trading—agency routing usually wins. For slower swing approaches, compare all‑in costs; some dealing desks may still be competitive in calm markets.

Advanced Guidance

Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.

Execution Framework

• Plan entries at levels with confluence (structure, momentum, time‑of‑day).
• Place stops beyond the logical invalidation, not arbitrary distances.
• Target at least 2–3R; scale out methodically and trail remainder.
• Avoid thin liquidity windows unless the setup explicitly requires it.
• Record slippage and spreads; poor fills can erase edge.

Review Loop

• Journal setups by session and pair to learn where they excel.
• Tag trades by catalyst (news, trend continuation, range breakout).
• Recalculate expectancy monthly; prune underperforming variants.

Risk Controls

Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.