if a client becomes "too" profitable, it can directly "upset" the broker. The table below lists all the main differences. This article was updated on May 15, 2017. In the worst case scenario, such broker can split clients into groups and put less successful ones on auto-execution and trade against them because on average they will lose, while clients that show signs of successful trading will be put on "slow-down" mode and can.
By definition, a dealing desk broker is a type of broker who takes the other side of their clients trades, by fixing the bid and ask price and waiting for a trader who would place an order with their setup.
Forex brokers that operate through, dealing Desk (DD) brokers make money through spreads and providing liquidity to their clients.
Also called market makers, Also called market makers, Dealing Desk brokers literally create a market for their clients, meaning they often take the other side of a clients trade.
STP brokers are the most common in the forex market and they act as bridges to the retail forex traders because it is very hard for individual retail traders to get through to the interbank market. In both cases, the broker itself does not act as the market maker and everything from placing a trade to its execution is done electronically without manual intervention. The biggest problem with your broker is whether or not they may be actively trading against you. Retail Foreign Exchange Dealer (rfed) can offset trades. STP brokers route all trading orders to the liquidity providers - banks.
STP/ECN brokers usually charge a small transactional commission, but will not alter the spread. Though these brokers differ slightly in their offerings, they are similar in the fact that they dont take the other side of their clients trades. .
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