When it comes time to start forex trading, there are two types of brokers you could deal with. These are the dealing desk and the no dealing desk brokers. Which one you choose depends on your type of strategy, and how much guidance you want. Therefore, in this article, we will give you a rundown of how these two work.
You should also keep in mind that brokers vary in both camps. They may offer different services and be of varying quality. Both have features that pull them together in the end, though.
Dealing desk broker
A dealing desk broker is one we would recommend to newer traders in forex. It gives you quotes on market prices and will help you make trades. They mediate on both sides of a trade, to make sure everything goes smoothly. Due to the fact that they can also offer clients liquidity for their trades, people call them ‘market makers’. However, as you would expect, this comes at a price. Literally.
Their prices are generally higher, as they do tend to offer advice. Additionally, if you do decide to take them up on their liquidity offer, you will have to pay them if you lose on a trade.
No dealing desk broker
These types of brokers take a bit more of a hands-off approach. Unlike dealing desk brokers, they offer you direct access to the market. You have far more freedom to find a deal that would perfectly suit you. Also, the broker is not going to take a place in opposition to you. However, they do not tend to offer any advice, so you are on your own. This means that if you make any unwise decisions, it is all on your head. You set up your own deals with people you find on the market. Nevertheless, the positive is that their prices are quite low in comparison, generally only the spread.