Forex Broker Types: Dealing Desk vs No Dealing Desk

A Forex broker having access to multiple liquidity providers can offer better spreads to itsclients, whereas a Foreign exchange broker with a single liquidity provider will have wider spreads. Traders can only use the ask price when buying and the bid price when selling. Thus, by opening https://www.xcritical.com/ andclosing a position, they pay the spread charged by the Forex broker as a fee. ECN brokers are non-dealing desk brokers,meaning that they do not pass on order flow to market makers. Instead, theymatch participants in a trade electronically and pass the orders to liquidityproviders. Since an ECN broker only matches trades between marketparticipants, it cannot trade against the client, an allegation often directedagainst some unscrupulous retail forex brokers.

Forex Broker Types: Dealing Desk vs No Dealing Desk

They are more expensive, often with commission-free trading, and most retail orders never reach the market as dealing desk brokers fill them internally. NDD advantages include access to raw interbank market spreads and lower trading costs, but exceptions exist. These enhance profitability, especially for short-term high-volume trading strategies. Non-dealing desk Forex brokers ecn vs stp act as intermediaries between traders and the interbank market. There is no conflict of interest between broker and traders, as an NDD broker usually relies only on commissions charged for services rendered, without mark-ups on raw spreads.

KuCoin Card Review: Exploring KuCard Features and Fees

It is enough to be connected to a multitude of clients that are accessing the platform and creating an ECN, although they may not necessarily be Tier-1 banks or financial institutions. The Non Dealing Desk broker uses the prices of other FX participants, usually banks, financial institutions and sometimes other traders to create the bid/ask quote. Dealing Desk brokers, also called Market Makers, are a type of broker that takes the opposite side of their clients’ trades.

What Types of Forex Brokers Exist?

Founded in 2006, FxPro is an award-winning no-dealing desk broker that provides an excellent offering for professional traders. With ultra-fast execution under 13 ms, no-dealing desk intervention, and commission-free trading from the MT4, MT5, and cTrader platforms, FxPro is definitely a broker worth considering. Founded in 2005, FP Markets is our best overall no-dealing desk broker recommendation. From its Raw ECN pricing and Direct Market Access (DMA) trading accounts, you can trade more than 10,000+ instruments with low commissions and deep interbank market liquidity. Dealing Desk brokers take the opposite side of a client’s trade, creating a counterparty risk.

Are there risks in trading with NDD brokers?

IC Markets offers access to popular trading platforms such as MetaTrader 4, MetaTrader 5, and cTrader, all known for their advanced charting tools and customizable features. Therefore, for certain account types, XTB functions as an NDD Forex broker, providing direct market access to interbank liquidity without dealer intervention. Exness is a versatile broker designed to serve both new and experienced traders. Beginners can benefit from the Cent account, which offers access to the user-friendly Trading Terminal platform, allowing them to limit their risk in the live market.

Which is the best No-Dealing Desk broker?

It ultimately comes down to the trader’s preferences and trading style. A no dealing desk (NDD) model is a system in which trades are executed directly with liquidity providers, without the intervention of a broker. This means that the trader is buying and selling currencies directly from the market. Depending on the type of the brokerage house, different account types exist. ECN accounts, STP accounts,fixed spreads, variable spreads, etc, are just a few examples. But the most impressive thing about the current Forex brokers is that they ceased to be just aForex brokerage house.

What Your Broker Wants, What They Really Really Want

The average order execution time is 0.071 seconds, making it ideal for scalpers. Exness offers an above-average range of research resources from in-house and award-winning provider Trading Central. Both inexperienced and advanced traders can benefit from the flow of reports and actionable ideas. The demo account features live quotes and mirrors live market conditions in assets such as forex and CFDs on commodities, indices, and stocks. Once traders are up to speed on a demo account, they can easily switch to a live version.

How to Choose the Best Forex Broker

Most reputable NDD brokers are subject to stringent regulatory oversight by financial authorities. These regulatory bodies enforce rules and standards designed to ensure fair trading practices and to protect the interests of traders. Brokers are required to adhere to these standards, which include providing transparent pricing and fair execution of trades. STP (Straight Through Processing) is a very common type of NDD execution. Because of the fluctuating bid/ask quote, most STP brokers have variable spreads. If their liquidity providers’ spreads expand, they have no choice but to widen their own.

How do NDD brokers compare to Market Makers (DD)?

They are responsible for maintaining transparency in their operations and ensuring the security of traders’ funds and personal information. They often provide leverage, allowing traders to control larger positions with less capital. This structure doesn’t necessarily mean they manipulate the market, but the execution might not be as direct as with NDD brokers.

Yes, NDD Forex brokers typically allow scalping and high-frequency trading strategies due to their fast execution speeds and minimal restrictions on trading styles. However, traders should review each broker’s terms and conditions regarding scalping. While Forex no dealing desk brokers are ideal for high-frequency traders, scalpers, and other very short-term traders, this broker type is not suitable for all types of traders. If you are not sure whether this broker type is right for you, read on below.

The competitively priced, commission-based ECN accounts feature trading fees as low as $4.00 per lot. Traders also benefit from competitive leverage with negative balance protection and an industry-leading asset selection of 26,000+ trading instruments, including 200+ Forex pairs. Eightcap maintains a cutting-edge trading infrastructure with superior order execution, high leverage, deep liquidity, and competitive fees.

They are called Straight Through Processing (STP) or Electronic Communications Network (ECN). STP brokers provide direct access between traders and the banks and other liquidity providers which move the market. ECN brokers do all the same things which STP brokers do, except that they also allow their clients to trade directly with each other. When you trade through an ECN, there can be an actual human being on the other side (winning or losing) of any specific trade which you make. With STPs and retail foreign exchange companies, you are trading against banks and brokers. Direct market access is another cornerstone of the NDD model, allowing traders to benefit from the best available prices in real time.

Instant deposits and withdrawals and 24/7 customer support are available via the app. In this review, I tested the Exness Terminal platform, which has a basic, uncluttered interface, making it easy for beginners to navigate. Customization is limited, but it is possible to enlarge the chart by hiding the watchlist and trade panels. Exness is a member of the Financial Commission – an independent self-regulatory organization and external dispute resolution body, dedicated specifically to Forex.

• ✅ Changeable spreads are used by XM, and traders may notice that they are greater during times of increased market volatility.
• Trailing stop loss orders are not available, and applying time-in-force conditions to orders is impossible.
• One of the main benefits of trading with a no-dealing desk broker is that there are no conflicts of interest, as your trades are sent directly to the underlying market without any broker intervention.
• The app has a user-friendly interface designed specifically for beginners.
• Using FX Empire’s comprehensive methodology, our team of experts has identified the best forex brokers for auto trading this year.
• The STP goes straight to several Tier-1 banks and financial institutions meaning there are fewer players available.

On the other hand, ECN (Electronic Communication Network) brokers, typically earn money through commissions on trades. Instead of marking up the spread, ECN brokers charge a commission for every transaction, calculated on percentage or lot size. The broker’s role here is to aggregate this information to ensure that traders are given access to the most competitive and accurate market prices available. Initially, the NDD broker receives a stream of pricing data and quotes from various Liquidity Providers (LPs) it has direct partnerships with.

When a company says it has a ‘no dealingdesk policy’ it means that it provides trading with immediate execution inthe underlying market. Filippo Ucchino is the founder and CEO of the brand InvestinGoal and the owning company 2FC Financial Srl. He became an expert in financial technology and began offering advice in online trading, investing, and Fintech to friends and family. These platforms include both proprietary systems developed by the brokers themselves and popular third-party options, like MT4 (MetaTrader 4), MT5 (MetaTrader 5), and cTrader. This hedging process involves the broker taking an equal position to the trader’s with the Liquidity Provider.

Investors benefit from the best deals by receiving highly competitive bids and asking prices. NDD (Non-Dealing Desk) Forex brokers are ideal for traders who prioritize transparency in their trading activities. They provide direct access to a network of liquidity providers, ensuring that traders receive the best available market prices. Overall, the best NDD (No Dealing Desk) Forex brokers offer traders direct market access, tight spreads, fast execution, and transparent pricing. With a commitment to fairness, security, and client satisfaction, these brokers empower traders to navigate the forex markets with confidence and efficiency. I consider BlackBull Markets among the best no-dealing desk Forex brokers due to its superb ECN trading environment.