2. Two Categories of Forex Brokers -The
Need for Reliable and Regulated Partners
In order to trade Forex you need also a broker. Forex Brokers operate as
intermediaries between a trader and the aggregate Forex Market (The ECN network
mentioned before). Basically there are two main categories of Brokers based on their
execution model, the Dealing Desk and the No-Dealing Desk Brokers.
Two (2) General Categories of Forex Brokers
(a) Dealing Desk Brokers (DD) or Agents or Market Makers
These brokers operate as a Dealing-Desk, meaning that they are making their own
market within the Forex market. In simple words, Market Makers sum all the buying
and selling orders of their clients and execute trades instantly on both sides. Actually
they accept all orders from opposite sides and earn money by staying in the middle,
without risk. Sometimes Market Makers are trading against their clients just to fill all
their orders.
Professional traders don’t like the fact of trading against their brokers and that is
why they are constantly avoiding Dealing Desk Brokers. Dealing Desk Brokers or
Market Makers are not considered as pure Forex Brokers
Dealing Desk Brokers offer usually a wide asset index including Forex, Stocks,
Indices, Commoditie