How do market makers work?
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  1. #1

    Default How do market makers work?

    Do they just create a buffered market between their own traders or are they part of the wider FX market and simply act as go-betweens?

    Do they look at who is long and who is short before accepting a trade?

    Do they hold prices until they are in profit themselves?

    I ask because I was in a trade and the price moved very nice in my direction on my chart but on my platform it only moved a couple of pips. My chart is provided by a different company from my broker and I was just wondering if this discrepancy was normal? Why would there be such a lag?

  2. #2
    Join Date
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    Well I think the problem lies in the fact that you arenít using the same charts that your broker provides. If you donít have a feed from your broker you will always have a discrepancy between your chart and your dealer platform. I recommend that you change charting packages or brokers so they are all in sync

  3. #3
    Join Date
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    Hereís the thing about market makers, they can change the price to where they want no matter how the market is moving. Be careful which broker you choose.

  4. #4
    You want a broker that offers a non deal desk platform (e.g. InterbankFX).

    A deal desk is basically a trader trading against a professional on a desk who can decide when and when not to sell to them. They offer a fixed spread platform where the desk makes their money in the spread trading against all of their customers.
    Last edited by chofman; 08-24-2007 at 04:21 AM.

  5. #5
    Join Date
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    This sounds creepy.

    Which brokers do not use this "dealing desk" thing?

  6. #6
    Oanda, FXCM, Interactive Brokers, MB Trading...

  7. #7
    tymen1 is offline Banned FX-Men Honorary Member
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    The best person to ask these things about brokers is Tess.

    She is a total expert on these things and appears,to be the most knowledgeable person on this forum at present regarding these matters.

    You would do well to take note of what she says.

    Regards, Tymen Wortel, Perth, Western Australia.

  8. #8
    Join Date
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    Quote Originally Posted by chofman View Post
    Oanda, FXCM, Interactive Brokers, MB Trading...
    Oanda and FXCM are both dealing desk brokers - or market makers to use the original term from superdupe's question.

    While I would agree that going the non-DD route is generally preferred in a lot of ways, especially for a short-term trader, that doesn't mean a DD broker can't provide a good trading experience. I have used Oanda for many years with absolutely no complaint. Nor have I heard any gripes from anyone else about trading with them.

  9. #9
    then why do they both claim not to use dealing desks?

    Oanda
    https://fxtrade.oanda.com/trading-forex.shtml

    FXCM
    states on their homepage "No Dealing Desk Execution"

  10. #10
    Join Date
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    i also talked to FXCM regarding this isssue and they said there is no dealing desk

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