The initial steps in selecting a broker is finding out what your options are. You don’t just sign up and do it right away. Not unless you know what to do already. Even so, a further study is a much better choice and knowing your forex broker types is very important.
Two Types of Forex Brokers
Dealing Desks (DD)
No Dealing Desks (NDD)
Dealing Desk Forex Broker – This forex broker function through Dealing Desk brokers and make money overspreads (Spread) and providing resources to their clients. Also known as “market makers.” Dealing Desk brokers exactly generate a market for their clients, which means they frequently take the other side of a clients’ trade.
Even though you may consider that there is a conflict of interest (coi), when there is actually none.
Market makers offers both a buy and sell quote, which means that they are filling both buy and sell orders of their clients. They are indifferent to the choices of a separate trader.
No Dealing Desk Broker - As the name indicates, No Dealing Desk Brokers do not pass their clients’ orders over a Dealing Desk, which means they do not take the other side of their clients’ trade as they purely connect two together.
No Dealing Desk is like passage builders, they create a structure over an otherwise impassable ground to link the two areas. No Dealing Desk can also impose a very small commission for trading or just put a profit by increasing the spread a little.