Trade Forex Trading

Trading Brokers Types - ECN, STP, NDD, DD & Market Maker

Brokers Types - ECN, STP, NDD, DD, Market Makers Brokers

The list below categorizes different brokers based on their execution methods.

ECN

ECN Trade Account stands for Electronic Communication Network, these ECN Account brokers are connected to the inter bank network directly through an electronic communication network and the orders from the ECN Account are placed straight to the electronic network. The ECN Account will display different orders from different banks. The quote placed by these ECNs network of banks are direct from them to the interbank net-work and orders are executed direct to the inter bank market once a trader trading with this ECN account opens a trade order with their broker,

ECN accounts charge both commissions and spreads for each executed trade. With ECN execution, every transaction is matched in real-time through the interbank network, maintaining transparency and precision.

STP

An STP Account signifies Straight Through Processing: brokers utilizing STP Accounts instantly route trader orders directly to their designated Forex Liquidity Provider, which is typically a major financial institution possessing extensive trading liquidity within the interbank network.

An STP Trading Account provided by an STP broker may source its Forex Liquidity from a single entity or through multiple Providers.

One advantage of STP Trade Accounts is instant execution of transactions. Traders benefit from direct access to interbank markets, facilitated by their STP online brokers.

STP Accounts won't charge commissions, but will charge spread in trades. Because traders have access to the inter-bank market execution, there's no re-quotes on orders neither any order waiting for trade execution, the execution is instant.

Difference between STP and ECN Execution

NDD

NDD refers to Non-Dealing Desk execution in forex trading, where brokers process orders directly without a dealing desk. This execution model typically comes with fewer restrictions compared to Dealing Desk methods.

NDD Order Execution signifies that transactions originating from the FX trader's account are routed immediately to the interbank exchange market. Orders are paired with others in this market using the online broker's NDD Desk execution model.

DD

DD means dealing-desk. Brokers with these accounts have a dealing desk where they can match orders and make trades in the online bank market.

Traders using a DD account often face many re-quotes.

Dealing Desks will issue traders with a lot of order re quotes, meaning prices of orders aren't real time & broker can requote a trader's order if the price of the market changes quick enough before broker's dealing-desk places the order online or before they match the trade transaction order in online inter-bank market.

Dealing Desk accounts mean that orders are not carried out right away. Because of this, using a DD Account might mean that orders are not carried out as fast as with an ECN or STP trading account.

Market Makers

Market Maker accounts are where MM brokers use a dealing-desk system, which lets them match orders themselves without using the main banking exchange market.

Brokers can trade against clients. They take the opposite side of your positions. If you lose, they win. If you gain, they lose. This setup lets the broker decide on counter trades.

Regulated Brokers

Regulated FX Brokers are those that operate under a financial regulatory authority, these corporations will stick to a strict code of ethics lest they lose their operating license, these are the genuine companies that are trusted by traders as they do not carry out un-shady practices against their customers because they are audited by their financial regulators annually

Regulated + STP Execution is the best choice to trade with.

Broker Types - Categorization of Brokers - Including ECN, STP, NDD, Dealing Desk (DD), and Market Makers - Referring to Forex Liquidity Providers

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