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Choosing the best forex brokers episode 2.
Episode 2 of choosing the best forex brokers. Types of brokers 1.dealing desk 2. Non dealing desk, dealing desk are also referred to market makers they make money through spreads while trading against their clients .they create market and artificial forex exchange rate for their customers .there is no conflict of interest since they provide they their clients with both buy and sell quote hence the decision of client is independent. Clients of market maker do not access to real interbank market rates though the completion is so stiff that the rates offered by these two types of brokers are so close to the interbank rate.
2. non dealing desk broker don’t allow their client order to pass through a dealing desk this implies they do not take other side of their clients trade they just act as a link to two parties, they act as a bridge .they make their money from small commission charged or put a markup by increasing spread.non dealing desk can be either ECN OR STP broker. STP stands for straight through processing system they direct their orders to liquidity providers who access the interbank market rates .ECN stands for electronic communication network this broker allows orders to interact with other market players like hedge funds ,retail traders ,banks and other brokers.Particpants trade against each other by providing their ask and bid prices. They get compensated through a small commission.
You can use any type of broker dealing desk or non dealing desk what matter is your trading style since the completion is too fast hence they provide close ask and bid price in forex market. Episode three coming soon watch this space ……….
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