Taking the other side
A market maker, sometimes called a dealing-desk broker, quotes its own bid and ask prices and can act as the counterparty to your trades. When you buy, it may effectively sell to you; when you sell, it may buy from you, managing its overall book of client positions.
This model is entirely legitimate and very common. Many well-regulated brokers operate this way, and it can offer benefits such as fixed spreads and the ability to trade in small sizes that a pure network might not accommodate as smoothly.
The conflict of interest
The obvious concern is a potential conflict of interest: if the broker is on the other side of your trade, your loss can be its gain. This does not mean market makers cheat — most hedge their exposure and profit from spreads and volume rather than from your losses — but the structural conflict is real and worth understanding.
This is precisely where regulation earns its keep. A seriously regulated market maker is bound by rules on fair execution and cannot simply move prices against you at will. An unregulated one has no such constraints, which is why the same business model can be safe or dangerous depending entirely on oversight.
How to think about it
Rather than treating "market maker" as automatically bad or "ECN" as automatically good, focus on the things that actually protect you: strong regulation, a track record of honouring withdrawals, and transparent, consistent pricing. The execution model is a secondary consideration behind these.
If a broker's model is unclear, or if it dodges questions about regulation and how it makes money, that opacity itself is the warning sign. A trustworthy broker of either type will explain plainly how your orders are handled.