Good day fellas, Forex Trading Education is happening right now, if you want to trading Forex with actual system by joining a Forex brokers, read this before action, there are two types of Forex brokers, dealing desk Forex brokers and the other one is non dealing desk Forex brokers, Here's a look at the different types of Forex brokers:
Dealing Desk Forex Brokers (DD)
This the simple description, the type of Forex broker is called a "market maker," which essentially means they can quote their own prices and they often trade against your position and vice versa, For example, a dealing desk broker will take a counter position to you, and in effect, your losses are profit for the broker or one of the broker's clients. Thusly, the majority of trades are fulfilled using the broker's own liquidity. They more effective
Dealing desk Forex broker make their money on the spread - the difference between buy and sell prices for a currency - and they don't take commissions. Yet, as market maker, the broker sets their own fixed price quotes, and sometimes these prices differ from actual market prices. It's because they can quote their own prices, Also, since winning trades are often fulfilled through the broker's own liquidity pools, you often won't be passed onto the interbank market to be paid.
What about No Dealing Desk Forex Brokers,
Unlike DD brokers, no dealing desk, or NDD, brokers enable traders to buy directly through the interbank market, the description of no dealing desk Forex brokers is meaning the broker links up two parties on the interbank market who want to make opposing trades. More competitive
Usually the Forex Trading Platform is more complex, These trades are facilitated through the broker's electronic platform. One difference is that the spreads offered by NDD brokers are not fixed, but variable. And thus during market volatility, the spreads can quickly widen. This is the actual risk, NDD brokers also can make money on the spread, or they may choose to charge a commission as well.
By the way In general Forex Trading Platform, there are two major types of NDD traders - STP and STP + ECN brokers. STP means Straight Through Processing and that means the that the broker offers fully digital trading through the interbank market without interfering with trades. In effect, trades are quickly filled and processed. ECN, or Electronic Communication Network, means the broker also provides real-time order book data, which increases the transparency of the trading. At the end result is, you must have a good knowledge about all of this to manage your Forex Trading more profitable
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