Type of Forex Broker
Forex Broker Type : No Dealing Desks This type of broker directs customer orders directly into the market.
Type of Forex broker
Type of Forex Broker
What types of Forex brokers are there ?
A broker is a company that acts as an agent for sending our orders into the Forex market. There are two main types of brokers:
1.Dealing Desk (DD), also known as Market Maker, is a broker that operates through a dealing desk (Dealing Desk) has a room to collect customer information. And there will be staff to check customer information. The order you place will be in the hands of the broker. when we trade The broker will then make a match with the other side for us. In terms of being a Market Maker, it means being a broker that has enough volume to trade for all clients. Market Maker is a financial company that is ready to buy or sell financial assets at any open price over the long term. as a market maker
Market Maker It is a financial company that is ready to buy or sell a financial asset at any open price over the long term. as a market maker These companies or individuals will ‘do’ trade in the marketplace by engaging in direct transactions as sellers or buyers.
Market Maker is a financial company that is ready to buy or sell a financial asset at any open price over the long term. as a market maker These companies or individuals will ‘do’ trade in the marketplace by engaging in direct transactions as sellers or buyers.
In general Market Makers has three responsibilities:
- Set the Bid and Ask price within a given currency pairs
- Pledged to accept these prices with specific requirements (leverage, spread, etc.)
- Market Makers can hedging their own orders to mitigate the risks. But there are several methods of managing orders to choose from.
Market Makers have an important role in creating liquidity. which is considered a pillar in building the forex market. Help create opportunities for other market participants. You can buy or sell stocks, currencies, futures and other trading instruments. at any opening price Market maker transactions account for a high percentage of total forex trading volume. affect the exchange rate of the currency
Market Makers are intended to be trading counterparts. This means that market makers match buying and selling activities between clients. They usually only profit from the spread.
The largest well-known market makers are major participants in the market, including Deutsche Bank, Barclays Capital, UBS AG, etc. To determine whether a bank is a market maker or not, The proportion of the bank’s overall trading volume is more important than the total capital. That means that what really matters is the bank’s true capabilities. In influencing market movements by offering buy and sell prices Even small and medium-sized financial companies can become market makers in the Forex market. But only the largest market maker is considered to be the largest contributor in the market.
2.No Dealing Desk (NDD)
What is a No Dealing Desks (NDD) Broker? : No Dealing Desks (NDD) This type of broker directs customer orders directly into the real market. is just an intermediary that will lead the customer’s orders to the real market, known as the Interbank market*, in which there will be real players, including banks, funds, brokers. , hedge fund , customers from different places that are already trading in real currency It is this market that is the reference for determining the value of various currencies that are shown to us around the world. What is a No Dealing Desks (NDD) broker?
Brokers with submissions Our orders go directly to the central area. without going through the broker’s main server first can be further subdivided:
2.1 Straight Through Processing (STP) Manage Forex Trading Directly routed through the broker’s server to the liquidity provider without re-entry. and no intervention from the dealing desk (order control department). The STP process shortens the trading time and ensures traders get better prices. It also reduces slippage and requotes.
2.2 Electronic Communication Network4 + Straight Through Processing (ECN+STP) is an automated system to keep matching orders + direct processing
What is No Dealing Desks (NDD)Broker ?
NDD means Our orders go directly to the central area. without going through the broker’s main server first (Not sending customer orders through the Dealing Desk, i.e. not going through the Client Verification Room), which means that the Broker does not seek any other benefit in the Client’s trading. What the broker does is simply linking the two parties together.
NDDs Broker was like building a bridge between the two places directly between buyers and sellers, where brokers NDDs earn a very small commission for each trade. Or just charge a small spread
However, this type of trader is characterized by unstable spectrum and commissions, and services may have higher prices than the Dealing Desk (DD)
โบรกเกอร์ No Dealing Desks (NDD) คืออะไร forex
Which broker should I choose?
Each broker has different advantages and disadvantages.We should choose to truly meet our needs. For example, the Dealing Desk (DD) type has relatively low fees and fixed spreads, and the No Dealing Desk (NDD) type has a relatively higher fee. but received a higher service and more safety to compensate
However, we should also look at the conditions of each brokerage company as well. and has high reliability Because perhaps some brokers in the Dealing Desk (DD) form may be more reliable than some brokers that are NDD.
Nowadays, there are a lot of different brokers that make a lot of competition, so brokers are trying to give themselves an edge. There are many highlights in order to attract customers And if there are more disadvantages, the more customers will have less. Because now applying for brokers As well as verifying identity is now a simple matter.
Adventage of No Dealing Desks Broker (NDD)
1.Send orders quickly
2.Get a price that is close to the real price.
This will make it easier for us to choose marketing strategies. Since it is close to the real price, if a trader is not NDD, it may not be able to do so. In fact, approaching the price means a real central market. If the currency depreciates, everyone will have different buffaloes. Hackers have taken actions and charges, even when we go to the bank to withdraw money, there will be such incidents.
3.There are several different swings of spread values.
It will make this value high. but on the contrary It will make the price low as well. Therefore, this information can be applied in trading planning, for example, chip trading in low spread currency pairs.
Or there may be an option to wait for the spread that has swings to decline because the cause of many swing patterns of the spread may be from currency news.
- Instant Execution
- Market Execution
- Comparison: Instant Execution vs. Market Execution Instant Execution is a method by which brokers execute orders at the prices a trader wants. or refuse to execute such orders or explain that If the price of the financial instrument changes when you place an order The broker will send you a message (requote) confirming that you accept the new price change. On the other hand, one trader wants to place a Buy order for EURUSD on his Pro account, which offers instant execution when he clicks Buy in the trading platform, priced at 1.21701/1.21727. because it is an immediate action Orders are opened only at the price requested by the client. or reject the execution of the said order. Therefore, the Buy order will now open at the Ask price, that is 1.21727. Let’s take a look at situations where market volatility is high and prices change rapidly from 1.21701/1.21727 is 1.21715/1. 21738 When the Trader clicks Buy, the Trader will see a requote on the screen confirming the new price change. This prompt will be displayed on the screen for 3 seconds if the trader accepts the said price. The order will be executed with the new price. But if the trader rejects the new price or ignores the re-quote. Such orders will be cancelled.
Market execution is a method by which a trader opens an order at the current price within a fraction of a second. with this method The price may be higher or lower than the price displayed in the terminal window. Because the prices are always changing.
The advantages of this method are It is the fastest order execution. This gives traders a 100% chance of entering the market.
A trader wants to place a Buy order for EURUSD on his Standard account, which offers market execution, when he clicks Buy in the trading platform, priced at 1.21705/1.21735. but changed to 1.21719/1.21740 Quickly, the system will automatically open orders at the new Ask price at 1.21740 without requesting any confirmation. The change in price to another price is known as slippage and is common when using this type of order execution.
Comparison: Instant Execution vs Market Execution
|Instant Execution||Market Execution|
May have requotes
Order based on market price
Orders are indeed executed.
Can control volatility and slippage
More risky due to volatility and slippage