Types of XAUUSD Brokers
Straight Through Processing Broker, NDD
Various Types of XAUUSD Brokers List - below is an explanation of the Different Types of Brokers.
ECN - Electronic Communication Network Broker - Types of XAUUSD Brokers
ECN Broker stands for Electronic Communication Network, these ECN brokers are connected to the interbank network directly through an electronic communication network and the orders from the ECN Broker are placed straight to the electronic network. The ECN Broker will display different quotes from different liquidity providers. The quotes placed by these ECNs network of liquidity providers are direct from the interbank network and orders are executed directly in the online market - once a trader trading with an ECN broker places a order with their broker.
These ECN brokers will charge commissions + spread for every trade order. For the ECN Broker execution method every trade is matched to another in realtime over the interbank network - ECN Network.
STP - Straight Through Processing Broker - Types of XAUUSD Brokers
STP Broker stands for STP, the STP brokers will send the client orders direct to their XAUUSD Trading Liquidity Provider, the Trading Liquidity Provider is a large bank with deep liquidity that's required to trade on the inter-bank network.
An STP Broker can either have one xauusd trading liquidity provider or many liquidity providers.
The best thing about STP Brokers is that traders can place their trades immediately on the online market with instant execution because they have access to the interbank market through their STP broker.
STP Brokers will not charge commissions, but will charge spreads on trades. Because traders have access to inter bank markets execution, there's no requotes on the orders neither is there any order waiting for execution, the order execution is instant.
NDD - Non Dealing Desk Broker - Types of XAUUSD Brokers
NDD stands for Non-Dealing Desk xauusd execution of orders, these NDD brokers do not implement a dealing desk & this makes this type of order execution to have less restrictions as opposed to the Dealing Desk XAUUSD Trade Execution.
NDD Order Execution means that trades from the traders account will be executed directly to the online inter bank exchange trading market. The orders will be matched with the other orders in the interbank exchange market using the broker NDD Non Dealing Desk order execution model.
DD - Dealing Desk Broker - Types of XAUUSD Brokers
DD stand for dealing desk, these DD brokers have a dealing desk where they can match orders & execute orders in the online inter bank exchange market.
The trader trading with a DD broker will get a lot of re-quotes.
Dealing Desks will issue traders with a lot of order re-quotes, meaning prices of xauusd orders aren't real time and the online broker can re-quote a trader's order if the price of the market changes quick enough before the broker's dealing desk places the order online or before they match the order in the online market.
Dealing Desk brokers therefore means that order execution of xauusd orders isn't instant and therefore this xauusd execution model may mean that orders executed using a DD Broker aren't executed as quickly as when compared to an ECN broker or an STP broker.
MM Broker - Types of XAUUSD Brokers
MM are brokers that have a dealing desk where they can match orders in house without going to the online inter-bank exchange market.
XAUUSD orders also can be executed against their traders - meaning the broker can take the opposite side of a traders open trades. This broker can make the decision to either execute a order that is the opposite direction of a trader's order thus if the trader makes a loss the broker makes a profit, & if xauusd trader makes a profit the broker makes a loss.
