Major Differences Between Forex Brokers
There are different types of Forex brokers that offer online trading services. Many of them offer legal services whereas few brokers are dishonest and illegal. Many of them are regulated by authorized regulation bodies although others can do things anything they want. Most Forex traders do not take the time to be aware of the difference between Forex brokers in order to select the best one of them.
Different brokers might appear offering the same services but they possibly will have different policies and systems of service, which can have an enormous effect on traders who decide to trade with them. Before you make account, take the time to understand about the types of Forex brokers and make a decision which is suitable for you. Different brokers have different levels of access to the market. Some are straightly associated to the market whereas others have a less straight link to the market (banks). Having a less direct link to the market (banks) does not imply that the services offered by a broker are less legal or dependable.
The Three Main Types of Forex Brokers:
When it comes to the main concern of what kind of forex broker to choose with importance of what their trading quotations are based on, 3 key choices available:
- Market Makers,
- No Dealing desk, and
- Electronic Communications Network
All of these different kinds of Forex brokers have divergent ways of managing executing and transactions orders.
This type of Forex brokers usually offer their clients a two sided. If the Trade is placed on, the market-maker broker will then finish up taking the other side of any given deal from their traders by selling on their offer side or buying on their bid side of the quoted price.
No Dealing Desk:
The NDD or No Dealing Desk type brokers do not have a dealing desk, as the name explains. However, it as an alternative offers the best combined quotes getting from the several forex quote providers that provide the NDD brokers their liquidity in the forex market.
ECN or Electronic Communications Network forex brokers usually do not have their own dealing desk. As an alternative, this type of brokers provide an electronic trading terminal in which professional market-makers at banks, plus traders and new forex market members can place their bids and offers through their systems. An advantage presented by several ECN brokers is that the traders’ posting price can be offered some level of secrecy.