Hey guyz,
I was practicing forex for almost 3 months and now wanna try myself with 1000 live account .
But lately was lil bit confused between DD and NDD account as the latter costs approximately 1 more pip.
Moreover the intermediary that i’m considering to open an account with says that neither re-quoting nor alteration to my orders will be made.
After this i think its quite stupid to let this 1 pip goes to the firm pocket.
Please help me and thx for ur time.
DD simply means that your broker can take the opposite side of your trade and therefore has a conflict of interest. They make money off the spread and can, potentially, make money taking the opposite side of your trade, hence the lower cost. They can make money off of you twice (once upfront and, potentially, a second time on the backend which would be transparent to you).
At a NDD they simply act as the middleman and pass your trade along to however many liquidity providers they deal with and do not trade against you. They remain impartial. They take the spread, albeit a bit more, and they have no further interest in your trade.
Just because the upfront cost is less with the DD option doesn’t mean you’re not eventually going to give your broker more money:54: After all, they are not being charitable here.
FXCM provides both DD and NDD options and have good explanations on their website if you want additional info.
In the end, I don’t see that it matters too much either way.