How to tell a difference if Your Broker is a Dealing Desk or Non-Dealing Desk, especially when ALL Dealing Desk Brokers claim that they are Non-Dealing Desk?
Most Traders are not realizing that their success in trading currency markets is depending on their sponsoring broker. There is an “artificial market” that has been creating and fully controlled by most of very well branded brokers that claim that are Non-Dealing Desk. Many of us that trade through for example FXCM, IBFX, FXDD, FXSol, Gain Capital, Investtechfx, Alpari and many many more, are trading in Artificial Market. Due to broker’s full control over every traded transaction the “Artificial Market”, the odds are stacked against us more then playing black jack in casino. Imagine, the dealer/broker can not only see his hand bat also yours and if he doesn’t like his cards he can sneak another one from time to time. Find broker who is offering “low leverage”, brokers that offer 300:1 or 500:1 leverage have very “unique business model” – transferring money from clients accounts to their own pockets, they are not there to look after your interest, you need to remember Dealing Desk is there to take trades against you, they sell you when you are buying and buying when you are selling, they make an impression that you are transacting with “interbank” but in reality orders ends up on a Dealing Desk of a Broker. Dealing Desk Brokers DO NOT like or even ALLOW for scalping the trading.
The Dealing Desk Brokers spike rates to take out trades when it suits their purposes.
Now listen to this very carefully -
Dealing Desk Brokers “SPIKE THE RATE” of up to 10-20 pips on routine bases to fill “unbalanced” trades, leverage their own account or to meet immediate liquidity requirements. I hope one day NFA or FSA will start indicting those “branded” brokers for manipulating rates to their own advantage and ripping their trader’s accounts.
Red Flags Dealing Desk A
1. “Scalpers” are not welcome, or charged a FEE for Scalping
2. Offering FIX SPREAD and/or LOW SPREAD (0.5pip, 1pip…)
3. Delayed Execution of your ORDER
4. Offering Leverage 300:1, 400:1 even 500:1
5. Slippage at closing positive trade
6. Limiting Stop Loss at 10 or 15 pips
ADVANTAGES OF THE NON-DEALING DESK
1. No Inherent Conflict of Interest. Non-dealing desk brokerage firms do not trade against their clients. As facilitators of trading, they do not take positions that may from time-to-time conflict with the interests of individual traders.
2. Market Access. STP (straight through processing) Non-dealing desk brokers offer every trader, no matter of a size, equal access to the interbank market. The rates (bid and ask prices) are not set by an individual broker but those derived from active trading between participating banks, institutional investors, FCM's and individual traders. The process itself makes every trader regardless of size an independent market maker.
3. Anonymity: Trading is done in total anonymity - the non-dealing desk broker does not know or have a need to know your positions so stop loss orders are not/cannot be targeted for takeout when a broker has a need to meet liquidity requirements.
Pricing Intervention (Bias). Non-dealing desk broker rates as well as bid/ask prices come directly from the interbank system. They are not filtered or otherwise manipulated to maintain established (undisclosed) profit margins or spiked by the broker to gain a trading advantage.
Transparency. No games No gimmicks. What you see is what you get, dollar in dollar out – Straight Through Processing (STP)
Spreads are Variable, Not Fixed. The Forex is an extremely liquid market. Spreads are in a constant state of flux and when traders trade through a STP non-dealing desk their tickets are cleared through BBO model Best Bank Offer.
During peak trading hours, spreads can drop to zero, a fact most traders using a dealing desk are not aware of. During off-peak hours, spreads can be considerably higher.
Straight Through Processing /Non-dealing desk brokers don't offer or execute trades based on fixed spreads. They charge a nominal transaction fee. Such is not the case with the dealing desk broker. Whether interbank spreads are high or low, they just boost their rates to guarantee the profits they have imputed in their fixed spreads. They also generate an undisclosed amount of income trading against their trader clients.
Most Traders are not realizing that their success in trading currency markets is depending on their sponsoring broker. There is an “artificial market” that has been creating and fully controlled by most of very well branded brokers that claim that are Non-Dealing Desk. Many of us that trade through for example FXCM, IBFX, FXDD, FXSol, Gain Capital, Investtechfx, Alpari and many many more, are trading in Artificial Market. Due to broker’s full control over every traded transaction the “Artificial Market”, the odds are stacked against us more then playing black jack in casino. Imagine, the dealer/broker can not only see his hand bat also yours and if he doesn’t like his cards he can sneak another one from time to time. Find broker who is offering “low leverage”, brokers that offer 300:1 or 500:1 leverage have very “unique business model” – transferring money from clients accounts to their own pockets, they are not there to look after your interest, you need to remember Dealing Desk is there to take trades against you, they sell you when you are buying and buying when you are selling, they make an impression that you are transacting with “interbank” but in reality orders ends up on a Dealing Desk of a Broker. Dealing Desk Brokers DO NOT like or even ALLOW for scalping the trading.
The Dealing Desk Brokers spike rates to take out trades when it suits their purposes.
Now listen to this very carefully -
Dealing Desk Brokers “SPIKE THE RATE” of up to 10-20 pips on routine bases to fill “unbalanced” trades, leverage their own account or to meet immediate liquidity requirements. I hope one day NFA or FSA will start indicting those “branded” brokers for manipulating rates to their own advantage and ripping their trader’s accounts.
Red Flags Dealing Desk A
1. “Scalpers” are not welcome, or charged a FEE for Scalping
2. Offering FIX SPREAD and/or LOW SPREAD (0.5pip, 1pip…)
3. Delayed Execution of your ORDER
4. Offering Leverage 300:1, 400:1 even 500:1
5. Slippage at closing positive trade
6. Limiting Stop Loss at 10 or 15 pips
ADVANTAGES OF THE NON-DEALING DESK
1. No Inherent Conflict of Interest. Non-dealing desk brokerage firms do not trade against their clients. As facilitators of trading, they do not take positions that may from time-to-time conflict with the interests of individual traders.
2. Market Access. STP (straight through processing) Non-dealing desk brokers offer every trader, no matter of a size, equal access to the interbank market. The rates (bid and ask prices) are not set by an individual broker but those derived from active trading between participating banks, institutional investors, FCM's and individual traders. The process itself makes every trader regardless of size an independent market maker.
3. Anonymity: Trading is done in total anonymity - the non-dealing desk broker does not know or have a need to know your positions so stop loss orders are not/cannot be targeted for takeout when a broker has a need to meet liquidity requirements.
Pricing Intervention (Bias). Non-dealing desk broker rates as well as bid/ask prices come directly from the interbank system. They are not filtered or otherwise manipulated to maintain established (undisclosed) profit margins or spiked by the broker to gain a trading advantage.
Transparency. No games No gimmicks. What you see is what you get, dollar in dollar out – Straight Through Processing (STP)
Spreads are Variable, Not Fixed. The Forex is an extremely liquid market. Spreads are in a constant state of flux and when traders trade through a STP non-dealing desk their tickets are cleared through BBO model Best Bank Offer.
During peak trading hours, spreads can drop to zero, a fact most traders using a dealing desk are not aware of. During off-peak hours, spreads can be considerably higher.
Straight Through Processing /Non-dealing desk brokers don't offer or execute trades based on fixed spreads. They charge a nominal transaction fee. Such is not the case with the dealing desk broker. Whether interbank spreads are high or low, they just boost their rates to guarantee the profits they have imputed in their fixed spreads. They also generate an undisclosed amount of income trading against their trader clients.
