Beware Of Market Maker Forex Brokers – Choose A No Dealing Desk Broker
Many people get into the fx trading arena without considering the importance of deciding on a dependable and trusted metatrader MT4 broker. A good fx MT4 broker can be the difference between success or failure and unfortunately, new traders are uninformed of the vital differences between fx brokers. Of key concern is that the forex industry is not centrally regulated such as stock exchanges so this opens the door for brokers to be unjust with their clientele.
The primary distinction that you will notice between currency brokers is whether they are a dealing desk or non dealing desk metatrader broker. A dealing desk broker makes money through the spreads and by trading in opposition to its clientele by taking the other side of the trade. A Dealing Desk Fx broker is ordinarily called a Market Maker.
Non Dealing Desk Currency MT4 brokers do not take the other side of the trade but instead provide accessibility to the interbank market. With a genuine No Dealing Desk broker, there ought to be no re-quotes and no added pausing while waiting for the order confirmation. These metatrader brokers will either charge a commission while keeping the spreads extremely tight or select to increase the spread and make your currency investing commission free.
There are also two other types of brokers. Straight Through Processing brokers that send orders directly from clients to the liquidity providers/banks which trade on the Interbank; and Electronic Communications Network brokers which allow client orders to interact with other client orders thus creating a marketplace where all participants, including banks, market makers and independent traders, trade against each other by sending competing bids and offers into the system. Both these types of brokers can be considered No Dealing Desk.
Of these sorts of metatrader brokers, keep away from the Dealing Desk Market Makers. They do not have your best interest in mind. Why would they? After all, they require you to lose in order to make the most money. Many lure new customers with extremely slim spreads and even give account deposit bonuses much like online casinos. But when it comes down to it, they have every purpose to make investing difficult so you lose with tactics such re-quotes and stop hunting. Currency trading is hard enough as it is, the last thing you need is your broker to make it harder. Go for a no dealing desk broker so that you do not need to be concerned about being scammed and focus on the job at hand, fx trading!
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