What is Difference Between ECN and DD Account in Forex?

ECN Account vs DD Account - ECN Account Forex vs DD Account Forex

ECN Accounts

ECN Account stands for Electronic Communication Network, these ECN Account forex 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 net-work.

The ECN Account will display different orders from different banks. The quote placed by these ECNs net-work 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 places an order with their forex trading broker.

These ECNs account will charge commissions + spread for every forex trade. For these ECN Account execution technique every trade is matched to another in real time over the interbank network - ECN Network.

DD Accounts

DD stands for dealing-desk, these DD account forex brokers have a dealing desk model where they can match orders & execute forex order in the online interbank exchange market.

The forex trader trading with a DD account will get a lot of re-quotes.

Dealing Desks will issue forex traders with a lot of order re quotes, meaning prices of orders aren't real-time and broker can requote a forex 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 order in online inter-bank forex market.

Dealing Desk accounts therefore means that order execution of forex orders is not instant and therefore this execution model might mean that orders executed using a DD Account are not executed as quickly as when compared to an ECN account or an STP trading account.