Types of Forex brokers

There are several main methods by which dealing centers (brokers) conduct trading on the Forex currency exchange.

The risk of losing your money sometimes directly depends on the trading methods used, so you should approach this issue with particular care and avoid dealing with "kitchen cabinets" when trading large volumes.

It's important to note that brokers rarely offer a single dealing method; they are usually differentiated by account type.

Therefore, when choosing a dealing center, also pay attention to the type of account you're opening. Obviously, cent accounts won't be offered on external markets, as they would create an unnecessary load on the servers.

So, here are the main types of brokers.

Dealing Desk (DD) – in this case, trading takes place on an artificially created exchange platform, which doesn't mean the company will constantly trade against you.

Trouble can arise if you decide to open a large trade of several hundred lots and start making a profit. As soon as clients' losses on counter trades no longer cover your profit, the trade will be artificially closed.

Therefore, trading with brokers with a Dealing Desk (DD) without any risk is only possible on cent accounts or with small amounts.

No Dealing Desk (NDD) – these types of forex brokers conduct transactions outside the company, and this does not necessarily mean that they transmit your orders to the currency exchange. An alternative option is to enter into agreements with large banks, which will form the market.

The method of transmitting orders and quotes also plays a significant role; trading can be carried out via:

• Electronic Communications Network (ECN) – a fully automated signal transmission system, virtually eliminating outside interference in the trading process.
• Straight Through Processing (STP) is the second option for electronic data processing, which is in no way inferior to the above-mentioned one, and in some respects even surpasses it.

Finally, I would like to name several brokers that use the No Dealing Desk system, or more precisely, have ECN accounts or carry out trading via STP:

EXNESS Limited – deposit from 100, spreads from 0.1, automatic withdrawal of funds, no requotes.

Alpari – no initial deposit, the recommended amount is $10, one of the oldest and largest brokerage companies.

RoboForex – along with cent accounts, there are also ECN accounts with various execution options and spreads.