I have been comparing: Dealing vs Non Dealing vs Dealing + Non Dealing Desks and was wondering if I’m missing something; I can’t understand why a trader would trade with a company that offers Dealing Desks and Non Dealing + Dealing desks.
This is what I came up with. Non-dealing desk brokerage firms do not trade against their clients. The bid and ask prices set by trading between participating banks, institutional investors. Non-desk broker don’t know your positions so stop loss orders can not be targeted for takeout when a broker has a need to meet liquidity requirements. Non-dealing rates and bid/ask prices come directly from the interbank system. Fees are limited and disclosed
On the other side the argument is non dealing fees are higher than dealing but I can’t find anything that’s written or posted to support that; But even if it did cost more just the fact that non dealing can’t trade against you in my mind would be worth going non dealing
Spreads are Variable, Not Fixed. The Forex is an extremely fluid market. Spreads are in a constant state of flux and when traders trade through a non-dealing desk, they may see a dozen or more banks posting rates - the most attractive appearing above all the others. Now this part I’m not sure about but I read this “During peak trading hours, spreads can drop to zero, a fact most traders using a dealing desk are not aware of. During off-peak hours, spreads can be considerably higher. “
If that broker is supposed to be a NND but at a retail broker level, that is an erroneous assumption.
Read the fine print of ANY reputable retail NDD broker, and you will find that as a market maker, they do in fact take positions against you. At least to open your trade anyway. They may pass it off, or they may not. But the fact is, they WILL at some point be on the other side of a trade you open, if not every time.
Just deal with the larger more reputable brokers, and you’ll be fine.
I think it comes down to what you prefer. I agree with Master Tang that at some time they will be on the other side of the trade. You should not think that a broker specifically targets your account and trades against you. Just find a broker you like and give them a try and see if their live account offers you the trading environment you need.
I also agree with Master Tang, but more with you that really; . . . it boils down with what someone prefers. But I also believe that the someone you prefer choice should be based on current facts and current options. I don’ necessarily agree that dealing with anyone just cause they’re big is safe; reputable yes; just big no.
True, I agree with you that bigger does not mean better. I would not make a decision based on the size of a broker. I have given a very small and rather unknown broker a try to find out for myself and they still have some of my business as I like what they offer and have always treated me well.
better to trade at good / honest Market Maker (dealing desk) than bad NDD broker …
but You should open 2 accounts and compare them Yourself ! no one do that job for you !!!
From what I have learned so far, I think Non Dealing Desk is most favorable to traders. Why?
NDD brokers do not trade against their clients
a Stp broker in effect will allow its clients to trade during the release times of financial news without any restrictions.
Non dealing fees are higher than dealing, but the trading condition is most favorable.
Let me use my broker as a case study; Profiforex is a STP broker; meaning they offer NDD for traders. They charge only 0.3pips as commission for the whole deal. Now, if you take a look at the spreads, you’ll notice that it is not as high as what other NDD platform offer. For example, at Profiforex, you’ll find that they offer 0.7 for EUR/USD and 0.9 for AUD/USD. Same lower spread for all other currency pairs.
I believe its best to try several out and see for yourself and if you already have a broker you are satisfied with then why even bother to change it? I have one NDD broker which I am comfortable with and I have one market maker which I am also satisfied with. I think newbies should be careful when they take a look at brokers as not every NDD broker is a real NDD broker, but simply states it.
Absolutely agree. A lot of people think that the grass is greener on the other side of the fence only to find out after they jumped over that it isn’t. There are pro’s and con’s to everything and as in most cases.
Unfortunately too many traders, especially newbies who claim they are, jump to conclusions way to fast before knowing what they talk about. This is just one example. The same applies to regulated brokers versus unregulated brokers. I have dealt and deal with both types and never had a problem with my brokers. There are cases where regulated brokers defrauded traders so the same applies as we discussed here.
Newbies heart or read a term and stick to it like flies on a piece of feces. Educate yourself and then make a decision.
Dealing Desk brokers literally create a market and artificial forex exchange rates for their clients and that act can affect charges. on my research, i did a little on the broker you mentioned and found out that they have no hidden charges, just the 0.3pips for commission and very low on different currency pair.
Dealing Desk brokers literally create a market and artificial forex exchange rates for their clients and that act can affect charges. on my research, i did a little on the broker you mentioned and found out that they have no hidden charges, just the 0.3pips for commission and very low spreads on different currency pair.
The brokers that are offering very low spreads sound attractive, but I would ensure that they are regulated and are reliable before putting a lot of money into them. After all, you need the broker to be in business and they can only do that by makinga profit.
NDD they actually know where your stop orders are but is unknown to the liquidity provider. NDD pass your order to someone else, they make money on how many orders you open and the liquidity provider on how much you lose. But still there is a conflict of interests but the conflict part does not know with whom is he fighting with. That is the big difference.