Major Types of Forex Brokers
There are two main types of Forex brokerage firms, Dealing Desk, and No Dealing Desk:
(I) Dealing Desk Brokers (DD) or Market Makers
(II) No Dealing Desk Brokers (NDD)
Each brokerage type offers a different order structure, as it is presented below.
(I) Dealing Desk (DD) or Market Makers
Dealing Desk firms are also called Market Makers. This type of brokerage usually provides fixed spreads and no commissions. Dealing Desk firms make money out of the spread between ask/bid. Actually Dealing Desks are always trading on the opposite side than their clients do. They provide bid/offer prices in a way that they are able to diversify their market risk via orders of a different direction. This type of Forex brokerage is accused of high slippage, price manipulation, and stop-handing techniques. Market-makers are only suitable for Forex beginners, and maybe semi-advanced traders.
Compare Brokers: » Market Makers