Just curious that if now a days people trade with ‘Market Makers’ brokers anymore. I am talking about the ones with dealing desks. I heard so many bad things about them. So just want to know that if it is safe to trade with a broker like this and if there is indeed some honest broker out there with dealing desk involved?
If they have dealing desks they can take a position against your trades i do believe, I would look for a no dealing desk company.
I trade with Alpari UK und IBFX AU - I only trade with EAs and sometimes the slower price feed is an advantage. Also, for long-term strategies the slightly higher spread doesn’t matter much.
I have no experience of trading with ‘Market Maker’ but there are many brokers available with dealing desk.
Neither of my brokers use a dealing desk, although interestingly one of them - FXCM - offers both dealing desk and no dealing desk accounts. The benefit of the DD account will be lower spreads because the market is artificial. This would come in handy if you’re a scalper, but if you trade higher timeframes there’s no need to worry about an extra pip or two in spread, and I prefer it if my broker doesn’t have a conflict of interest taking my trades.
Reading directly from forex market makers. The forex market maker actually buys and sells his own positions in the background from chosen liquidity providers in the Interbank market, and then offers positions at Bid/Ask prices that work to his benefit. As a middleman, the broker deals with banks or other brokers on one end, while managing the “over/unders” for each currency pair from retail traders on an aggregated basis. In other words, there remains a basic conflict of interest for all market makers. Unscrupulous brokers can easily manipulate spreads to their benefit over time, leaving their clients to accept their behavior or move on.
The market makers in the forex community of brokers, at least the vast majority of them, are legitimate and would never do anything like manipulating spreads to their immediate benefit. They are more concerned about pleasing and retaining their clients. Competition is too fierce, and regulators provide much more oversight in this day and age. Like it or not, however, ECNs, the other type of broker that passes orders straight through to their liquidity providers, waste little time in their marketing campaigns emphasizing that market makers trade against their clients in the back-office. There are pros and cons for each broker set up, and these depend on what your individual needs happen to be.
Reading directly from forex market makers. The forex market maker actually buys and sells his own positions in the background from chosen liquidity providers in the Interbank market, and then offers positions at Bid/Ask prices that work to his benefit. As a middleman, the broker deals with banks or other brokers on one end, while managing the “over/unders” for each currency pair from retail traders on an aggregated basis. In other words, there remains a basic conflict of interest for all market makers. Unscrupulous brokers can easily manipulate spreads to their benefit over time, leaving their clients to accept their behavior or move on.
The market makers in the forex community of brokers, at least the vast majority of them, are legitimate and would never do anything like manipulating spreads to their immediate benefit. They are more concerned about pleasing and retaining their clients. Competition is too fierce, and regulators provide much more oversight in this day and age. Like it or not, however, ECNs, the other type of broker that passes orders straight through to their liquidity providers, waste little time in their marketing campaigns emphasizing that market makers trade against their clients in the back-office. There are pros and cons for each broker set up, and these depend on what your individual needs happen to be.
I have often wondered what advantage does market makers offer to clients. If they trade against clients, then why should someone like me be there. No dealing desk brokers are the best to trade with.
A market maker that is regulated by the FCA might be a better choice than a non-regulated NDD broker. At the end of the day everyone has to find a broker that fits their trading style.
Primarily because they can offer small and / or fixed spreads. An NDD broker has to fluctuate with market liquidity and that can murder a scalper.
That’s why I don’t scalp!