NDD Forex Brokers 2023 List
BaFin, FCA, FINMA
CySEC, IFSC, IFSC
Islands Saint Vincent and the Grenadines
FCA, IFSA, SVG
Cyprus, Australia, Belize
ASiC, CySEC, IFSC
CySEC, FCA, FSA, FSC, MiFID
CySEC, FSB, FSC, MiFID
Here, we will discuss the trading process, benefits, and types of NDD Forex Brokers. Thus, you will understand if you should trade with an NDD Forex Broker or not.
What is a No Dealing Desk (NDD)?
No Dealing Desk is an operating system or feature offered by a broker to execute trading procedures for the traders. This feature allows the traders to have direct access to the interbank network. Whereas a dealing desk broker provides different rates than the rates provided in the interbank market, NDD brokers offer the interbank market rate exchanges directly.
Besides, the dealing desk brokers take the other side of your trades. NDD brokers never create any intervention inside your trading process. Either they simulate your order with other traders or they set the order with the interbank network where you will be dealing with a number of liquidity providers and get the most competitive bid and ask rate.
NDD brokers offer wider spreads than Dealing desk brokers. This may result in higher costs per trade. So, the lower spreads may entice you towards the Market Makers (DD brokers). But trading with a broker that involves you with a particular liquidity provider and has the potential to place a trade against you may bring you up to greater risks.
Types of NDD Brokers:
There are two basic types of NDD brokers- STP(Straight Through Processing) brokers and ECN (Electronic Communications Network) brokers. The trading execution types are almost the same with both types of brokers. Both submit your orders to the liquidity providers that include banks, hedge funds, and other market participants (mostly tier-1 financial institutions).
ECN brokers also imply the Straight Through Processing execution system. The only difference is they let you enter in manual liquidity. ECN module has an improved operating system to handle multiple orders in the same currency pair. So, they can allow you to trade with other market participants. ECN brokers charge the raw market spread and fee on each trade. STP brokers add up their fees directly with the spread markup.
In terms of execution, ECN is faster than the STP trading system. It is because through an STP broker your money goes to a complex chain of volatility created by larger financial entities. With ECN your order is exposed directly to the market liquidity. So, the order is processed instantly within the same network the order is to be traded.
Why should you trade with NDD Forex Brokers?
One of the key reasons you should choose NDD brokers is that they provide security and transparency. There is no manipulation involved in the trade. You are quoted a price that is aggregated from the prices given by the banks, financial institutions, market makers, and other liquidity providers. So, you get the real and updated pricing with them.
These types of brokers have an improved electronic automation system that ensures quick execution for your trading. So, you are safe from different hidden charges like unwanted swaps.
The NDD brokers are regulated by top Tier regulatory authorities. Although they don’t usually provide any balance protection, some of them offer you to trade from your own bank account rather than the broker account. You just have to submit the documents issued by your bank that guarantee their liability towards the broker in case you lose money.
NDD brokers are more trusted in case of trading with large amounts. If you really want to trade along with developing your knowledge about how the market moves, you should go with a regulated NDD broker.
You will have to pay a larger trading cost if you are dealing with NDD brokers. They have larger minimum deposit amounts than the market makers. Besides, you have to trade larger lot sizes with them whereas the retail forex broker allows you to trade with small positions.
NDD brokers provide larger leverages to gain quick profit from the market. So, if you are not experienced enough, you may blow up your account. The retail brokers also provide simpler trading platforms to understand the trading process easier.
So, for a beginner who would like to practice their trading strategies with small investments, he should possibly go for a retail broker
The first and foremost step to start your Forex trading is to choose a broker. But there is a void of confusion as to which broker one might choose. In this risky marketplace, everyone wants to cut their profit. So, you want a great broker to succeed. Here arises the misconception. Due to the urge to find a broker that is ‘best’ with the feature, beginner traders often ignore analyzing their own trading conditions. So, it is always recommended that you should develop a good understanding of the market and your trading decisions.