Forex Brokers | Best ECN And STP Brokers | DD | NDD
Forex brokers are the intermediary between you and the “interbank.”
If you don’t know what the interbank is, it’s a term that refers to networks of banks that trade with each other.
Typically forex brokers will offer you a price from the interbank that they have relationships.
Therefore many forex brokers use multiple banks for pricing, and they offer you the best one available.
Forex Brokers hold your Trading Account by which traders have access to the interbank market through a Broker.
Now Anyone can open Trading Account easily, and they supply the charts we can use it for technical Analysis purpose.
LEVERAGE OFFERING BY BROKERS
The ability to use forex leverage comes with every account, and it varies in the amount anywhere from 2000:1 to 1:1—10:1.
It means that for every $1 in your account, you have $10 to trade.
Both may be excellent and bad as you can make exponential profits, but you can also suffer from exponential losses.
The law requires forex brokers to disclose this, and they typically do in the fine print.
So New traders typically get excited and blow their accounts out quickly if they jump in too fast.
A. DEALING DESK(DD)
Usually, have fixed spreads.
Will take the opposite side of your trade.
Are not affected by news or Liquidity issues.
Are generally considered to have a fundamental “Conflict of interest “with their accounts holders.
B. NON-DEALING DESK(NDD)
More valuable Forex Brokers among traders and they will route your trade directly into the Interbank market through “Liquidity providers.”
Liquidity providers are entities like Banks, Hedge Funds, and other Broker.
There are a few different kinds of NDD.
Straight Through Processors – STP
Electronic Communication Network – ECN
Direct Market Access -DMA
1. Straight Through Processors – STP
An NDD broker.
They will initially take the opposite side of your trade and then pass position on to their liquidity providers banks and another broker.
If there is no immediate fill from liquidity providers, you might experience a re-quote and small delay getting into the market.
2. Electronic Communication Network – ECN
Different from STP- it doesn’t get you in the interbank market the same way the STP does.
Link you with other participants and other individual traders that are taking the opposite position you are.
A commission usually charged.
You get a reasonable rate with no slippage or re-quotes.
They will hook you up with the liquidity providers instantly.
3. Direct Market Access -DMA
DMA Brokers only offer a five-digit quote and only variable spreads
The spread comes directly from liquidity providers with a small increase in the charge.
No Commission charged. They only price you pay five the spread.
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