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Please suggest by adding a comment below. Dealing Desk and quote fixed spreads. A dealing desk broker makes money via spreads and by trading against its clients. A Dealing Desk Forex broker is called a Market Maker – they literally “make the market” for traders: when traders want to sell, they buy from them, when traders want to buy, they sell to them, e. NDD — No Dealing Desk — NDD Forex brokers provide access to the interbank market without passing orders trough the dealing desk. With true No Dealing Desk brokers there are no re-quotes on orders and no additional pausing during order confirmation.
This, in particular, allows trading during news times with no restrictions on trading. An NDD broker can either charge commission for trading or choose to increase the spread and make Forex trading commission free. STP — Straight Through Processing — STP Forex brokers send orders directly from clients to the liquidity providers – banks or other brokers. Sometimes STP brokers have just one liquidity provider, other times several. The more there are liquidity providers and therefore liquidity in the system, the better the fills for the clients. The fact that traders have access to the real-time market quotes and can execute trades immediately without dealer intervention is what makes the platform STP. ECN — Electronic Communications Network — ECN Forex brokers additionally allow clients’ orders to interact with other clients’ orders.
Participants interact inside the system and get the best offers for their trades available at that time. Sometimes STP brokers are discussed as if they were ECN brokers. With ECN broker traders can see where the liquidity is and execute trades. Only ECN brokers charge commission for trading Forex. How an STP broker earns its money? ECN brokers are the purest breed among all Forex dealers.
They don’t profit on spread difference. Their only profit comes from commission. ECN brokers are interested in their clients to be winning, otherwise there will be no commission to earn. Benefits of trading with No Dealing Desk brokers Among the main reason why traders look for NDD brokers is transparency, better and faster fills and anonymity. Transparency means that a trader enters a true market instead of the market being artificially created for him.