What is Forex Dealing desk and how does it work Any transaction in the FOREX market occurs invariably through a broker. Brokers offer a very valuable service in that they enable even the smallest investor to have access to the FOREX market, which, until very recently, was a very exclusive club. There are basically two types of brokers offering their services at the retail level: the traditional broker with dealing desk (known as the Market maker) and non-dealing desk broker (operating an electronic platform). The market maker is the counterpart to an individual trader in a FOREX transaction. In other words, if the individual trader is looking to sell a certain amount of a currency at a certain price, the market maker will try to meet this price and quantity. He can do this by matching his other clients orders with the individual traders requirements. He can split the order and do any number of combinations to satisfy the client. Alternatively, he may buy the traders currency himself. These calculations are done by what is called a dealing desk. A dealing desk is therefore essentially a group of traders working for the broker who analyse every clients orders, match the orders in an attempt to satisfy them or make the relevant purchases. These analyses are however always based on the bottom line of the broker. In other words, the brokers profit objectives come first the client comes second. If the clients order is against the brokers interests, orders may not be met, prices may be reduced or transactions delayed. The ostensible goal of the dealing desk is to provide liquidity because they enable instantaneous trade executions. They do the pricing, by matching the quotes of one client with the other clients they have or by determining their own interests in the clients order. Their revenue is not from commissions on each trade. Rather, they make a profit on the spread between the bid and ask price. They offer a fixed spread, which can sometimes be beneficial to the trader when the market is volatile. The dealing desk therefore acts as a screen between the real market and the trader. The client never gets the real quotes or quantities on offer. They receive the manipulated image that the broker wants to show them. In all circumstances, the Market Maker loses money if the client makes a profit. This is because he is the counterpart to the transaction. You can therefore be certain that the Market maker will not allow you to make exorbitant gains because these will mean exorbitant losses for him. The only thing preventing the Market Maker from fleecing the trader dry is the question of reputation. If the reputation of the brokerage is marred, that is most certainly the end of his business. Acclaimed Execution If you cant trust your execution, you cant be confident in your trades. Thats why we offer you trading execution options to help give you an exceptional trading experience. We innovated transparency in the forex market with the competitive and market-driven No Dealing Desk (NDD) execution. And with multiple account types, you choose the execution that works best for your trading. For Standard AccountsNo Dealing Desk Execution With NDD, FXCM acts as a price aggregator. We take the best available bid and best ask prices from our liquidity providersglobal banks, financial institutions and other market makers and stream those prices to your platform. This large, diverse group of liquidity providers makes this model special: The more advantageous the prices, the more order flow the provider receives. Through competition, NDD ensures prices are market-driven and fair. Low spreads from liquidity providers 1 Anonymous order execution No re-quotes 2 no dealer intervention No restrictions on trading strategies (scalp, trade the news, use any EA) Potential Price Improvements on all order types For Mini Accounts For traders new to the forex market, our introductory Mini Account gets you started with just 50. Access the most popular and liquid forex pairs at prices as low as 1.4 and enjoy the educational resources at DailyFX and exceptional client support. Mini Accounts feature dealing desk execution 1. where FXCM can act as a dealer determining prices and spreads. Certain restrictions apply to accounts that execute on dealing desk execution such as API trading. Read more about dealing desk execution . forex execution: 1 Execution Disclaimer: FXCM aggregates bid and ask prices from a pool of liquidity providers and is the final counterparty when trading forex on FXCMs dealing desk and No Dealing Desk (NDD) execution models. With NDD, FXCMs platforms display the best-available direct bid and ask prices from the liquidity providers. In addition to the spread, the trading cost with NDD is a fixed lot-based commission at the open and close of the trade. While generally NDD accounts offer spreads with no markups, in some circumstances, FXCM may add a markup to NDD spreads. This may occur due to, but not limited to, account type, such as accounts opened through a referring agent. With dealing desk execution, FXCM can act as the dealer on any or all currency pairs. Backup liquidity providers fill in when FXCM does not act as the dealer. FXCMs dealing desk has fewer liquidity providers than NDD. There are many other factors to consider when choosing an execution model (such as conflict of interest, trading style or strategy). See Execution Risks. Note: Contractual relationships with liquidity providers are consolidated through the firms U. S. affiliate, Forex Capital Markets, LLC, which, in turn, provides technology and pricing to the group affiliate entities. 2 No Re-quote Policy: FXCM maintains a no re-quote policy. Circumstances exist based on order size, trading pattern, and market conditions where individuals may not receive execution at the requested rate. Orders are executed at the next available rate within the traders parameters, subject to market conditions. The difference between the requested rate and final execution price may be more or less advantageous based on the market activity and available liquidity. Customer Service Launch Software Popular Platforms About FXCM Forex Accounts More Resources High Risk Investment Warning: Trading foreign exchange andor contracts for differences on margin carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. Before deciding to trade the products offered by FXCM you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. FXCM provides general advice that does not take into account your objectives, financial situation or needs. The content of this Website must not be construed as personal advice. FXCM recommends you seek advice from a separate financial advisor. Please click here to read full risk warning. FXCM is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. NFA 0308179 Forex Capital Markets, LLC (FXCM LLC) is an operating subsidiary within the FXCM group of companies (collectively, the FXCM Group). All references on this site to FXCM refer to the FXCM Group. Please note the information on this website is intended for retail customers only, and certain representations herein may not be applicable to Eligible Contract Participants (i. e. institutional clients) as defined in the Commodity Exchange Act sect1(a)(12). Copyright copy 2017 Forex Capital Markets. All rights reserved. 55 Water St. 50th Floor, New York, NY 10041 USA
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