Which is better Dealing Desk or No Dealing Desk?
and why?
thanks in advane.
I noticed that some brokers without dealing desk offer lower commission and tighter spread because of low overhead. 
It will depend on you strategy, cos sometimes in the long therm you’ll be better with the dd and sometime in the shorterm will be better without… one charge a comission and the other increses the spread… so whats your strategy?
Hello,
The Dealing Desk Brokers (I.e. The Market makers) rate a market for their clients, meaning they often take the other side of a client’s trade.
Market makers provide both a sell and buy quote, which means that they are filling both buy and sell orders of their clients; they are indifferent to the decisions of an individual trader. They control the prices at which orders are filled. Also, their clients trade on fixed spreads and do not see real interbank market rates.
In general, this type of Brokers earn from the losses of its clients.
To be honest that is why I prefer the NDD/ STP type of brokers, as they are acting as an intermediary between the clients and the liquidity providers. Forex brokers that have an STP system route the orders of their clients directly to their liquidity providers who have access to the interbank market.
But it depends on your personal preferences…
Dealing desk brokers profit by buying at lower prices and selling at higher prices, and by taking advantage of the spreads between the bid and ask price. In most cases, dealing desk brokers keep trades safely within their own liquidity pools and do not require external liquidity providers. So , they are better then non dealing.
Retail forex brokers can manage the risk on the other side of your trades in one of three ways, and each method has its pros and cons. We explained them in greater detail in this earlier discussion: Who is the counterparty in an exchange?
Full disclosure: FOREX.com is market maker, but that’s not why we defend this trade execution model. (In fact, for high volume traders [100K minimum trade size] we offer Direct Market Access [DMA].) Rather, we are a market maker for most of our retail clients, because we believe market making is the best way to provide them with reliable pricing on smaller trade sizes while effectively managing our own risk. We are fully accountable for every execution and don’t outsource that responsibility to a third party.
How is trading against the Dealing desk broker that profits everytime you lose a good thing?
They are just incentivized to manipulate the trades and price movements to go against their clients because this results in them winning more money.
Whereas a STP broker is just the middleman between you and a pool of LPs (the market) and they are incentivized to provide best trading condition + lower trading costs (commissions + spreads + slippage + swaps etc) so the traders are happy, get the best execution and will continue to trade with that broker for a longer period of time.
I don’t get it - why would trading with an MM be better?