Dealing Desk vs. No Dealing Desk Forex Brokers

You might put your bet on a dealing desk broker? Or maybe no dealing desk broker sounds cooler to you?

The truth is that none of them will become your best friend, so you don’t need to choose which one is cooler or funnier. 

They are not your friends who will be there if you start crying because you blew out your account.

They will make profits both from your wins and your losses, so you need to choose which one fits your trading strategy better. 

It all depends on what you prefer. 

For example, if you prefer having tighter spreads but pay a commission per trade, you need to choose No Dealing Desk Broker.

But if you rather have wider spreads and no commissions, you will choose Dealing Desk Broker. 

Usually, day traders prefer tighter spreads(tighter spreads = small difference between the bid and ask price) because it is easier to take small profits as the market needs less ground to cover to get over transaction costs.

Meanwhile, wider spreads(greater difference between the bid and ask price) tend to be insignificant to longer-term swing or position traders.

We will list some of the major differences between these types of brokers.

• Dealing Desk brokers, also known as market makers, offer: 

1. Fixed spreads
2. Take the opposite side of the trade
3.  Most of their quotes are artificial
4. The orders get filled by the broker on discretionary basis

• No Dealing Desk brokers ( STP) offer:

1. Variable spreads
2. Their role is as a bridge between the client and liquidity provider
3. The quotes come from the liquidity providers
4. There is automatic execution of your order, without re-quotes

• No Dealing Desk brokers ( STP + ECN) offer:

1. Variable spreads
2. Their role is as a bridge between the client and liquidity provider and other participants
3. The quotes come from the liquidity providers and ECN providers
4. There is automatic execution of your order, without re-quotes
5. They display the Depth of the Market (DOM) on their trading platform

Forex brokers are neither your BFFs nor the monsters who want to get you to fail.  

They simply want to do business with you. If you lose all your money in trading and don’t come back, what will they do without clients?

Brokers want to earn money from your transactions, but at the same time, it is beneficial to keep you in the game. 

The ideal client of dealing desk brokers is the one who more or less breaks even. In other words, a client who doesn’t win or lose at the end.

If you continue reading, you will become a good trader, so you will be able to beat them at their own game and make huge profits.