Text correction: dealing desk or non-dealing desk?


  1. In this lesson it says:

    Non-dealing desk brokers get their pricing of currency pairs from multiple liquidity providers and pass on these prices to the trader without the intervention of a dealing desk.

  2. Question:

    Instead of “without the intervention of a dealing desk”, it should be “without the intervention of a non-dealing desk.”

Thank you.


there’s no such thing, really, as a “desk that’s non-dealing”

the expression “non-dealing desk broker” just means a broker that doesn’t use a dealing desk

“without the intervention of a dealing desk” is correct - it just means, as explained above, that trades are (allegedly) passed on to a liquidity provider without being individually inspected by a broker-employed “dealer” which would cause delays

note, though, that there’s no reliable way of telling whether a broker is “NDD” just because they claim to be - people who have worked in the industry will tell you that not everything is necessarily as it appears to be, and that these terms like “NDD” and “STP” (straight-through processing) and “ECN” (electronic communications network) don’t necessarily mean anything much at all; this illustrates why it’s so important only to use brokers who are regulated by a proper regulator (which means, in effect, regulated by ASIC or FCA or CFTC)

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The situation is obviously even more murky than I had thought.

I know most new traders think their trades are purchases and sales of actual currency. Which I always find touchingly naïve.

But is there any hard data to tell us how much private retail Forex trading really is STP and how much is through what are effectively market-makers?


they do

which is exactly what all the counterparty market-makers want them to think, of course

and many of the conversations in this forum tacitly assume that when people are “trading” with these “brokers,” they’re actually dealing in currencies rather than just having a side-bet on the price-movements of currencies! :open_mouth:

indeed - but you can’t really blame people for imagining that, when the whole industry is set up to encourage them to believe it? all you can do is annoy and irritate people by continually pointing out that it isn’t actually true at all (which is a pretty thankless task, as you and i both know!)

no, im sure there isn’t

the point (which everyone misses, and which i keep annoying and irritating some people here by mentioning!) is that if brokers are regulated by ASIC or FCA or CFTC then their websites are actually inspected by the regulator, and they can’t get away with blatant lies, or deliberate deception

in the rest of the world, they can, because the so-called “regulators” don’t give a damn, and are paid for by the “brokers” anyway, so it’s just The Wild West out there, and more or less anyone can get away with more or less anything

and they do!

which is part of the reason why it’s a tragedy (for many people) that they get enouraged, in some forums, to “go offshore to avoid the CFTC”, an institution which was established specifically in order to protect them

but to answer your question, no, there’s no way of knowing how much volume is really STP

which is understandable, if you think that - for a start - some “brokers” describe all their volume as “STP” but actually they themselves own the “LP” to whom the volume is STP’d!!

it really, really IS “the wild west”

people just don’t begin to understand the risks they’re taking if they use not-properly-regulated brokerages, and then they sometimes even get cross with you, and accuse you of “negativity”, if you try to explain it to them :stuck_out_tongue_winking_eye:


Thanks for the fabulous answer @flamingoproxy.

It really is a tough world out there…


I do agree completely with your post concerning non-regulated brokerages. But I think there is room for some caveat here.

There are some traders who do understand the risks but still want to use off-shore brokers for certain reasons such as higher leverage or circumventing some domestic rulings, etc.

And I think there are some large broker companies that actually provide for this via an off-shore subsidiary. Whilst these poorly- or non- regulated subsidiaries essentially carry the same risks for their clients, there is some assurance that such parent companies are not out to directly fraud their clients since any widely publicised evidence of this would undoubtedly also reflect on the parent company.

Kind of a weak argument but if one has a reason for seeking an off-shore broker, such as high leverage (which I do not recommend), then I would think that one owned by a major, properly regulated, broker group would present less of a risk.

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It’s super confusing, and deliberately murky. People think ECN means that their trades are put through to the market and that their trades affect the price.

Here’s the definition of ECN “Electronic communication networks connect buyers and sellers directly by bypassing market makers”

Your broker is connecting your buy order with another customer’s sell order and meeting the ECN requirements without ever doing anything. This is no different to being a market maker except in the event of a huge bias towards one side of a trade (think GameStop). Then the broker has to hedge their risk by actually purchasing the asset everybody is betting on so they’re not overly exposed. This is where liquidity issues can arise, especially for leveraged accounts.

Knowing that the vast majority of people lose, the buy wins are smaller than the sell losses, so not only is your broker an ECN, but also a market maker and profiting from your loss too. All whilst complying with that snazzy image that shows them collocated with the exchange so that your trades are executed in the fastest possible time.