![]() ![]() ![]() In other words, a Dealing Desk broker takes the opposite side of every trade a client makes. What is a DD Forex broker?Ī DD Forex broker is also known as a market marker and is the type of broker that uses a dealing desk in order to act as a counterparty to the client’s trade. Afterwards we’ll help with your understanding of a few more bits of trading jargon. Now you’ve got a general understanding of a couple of vital terms it’s time to get on with our introduction to the different types of Forex broker. But when the market is volatile it can be much higher. During periods of high liquidity and when market activity is low the spread is usually lower. Sometimes variable spreads can be as low as 0.1 pips for major currency pairs. The best Forex broker will always try to offer traders the best possible bid and ask prices. The main advantage of fixed spreads for the trader is that they never increase, even when market conditions are volatile. It is normal for two prices to be given for each currency pair., the difference being the spread, which is usually expressed in pips.įixed spreads stay the same regardless of market conditions and it is usual for brokers to offer fixed spreads of around 2 or 3 pips for the major currency pairs. It refers to the different between the buy and sell price, otherwise known as the bid and ask price. The spread is a term that you will encounter a number of times when considering your options with regards the choice of Forex broker. In some cases, therefore, one pip will be the second digit to the right of the decimal point. However, in order to make it a little more confusing, a number of currencies only have two digits to the right of the decimal point. When you see the value of currencies quotes there will often be four digits to the right of the decimal point. A pip is how the value of a currency is expressed and is the smallest unit in the Forex market. In order to understand what the spread is you first need to be introduced to a pip, as this will be how the spread is expressed. ECN stands for Electronic Communications Network.īefore we go into more detail let’s first look at a couple of different terms that will be very relevant when discussing different Forex broker types.STP stands for Straight Through Processing.So first let’s explain what the terms stand for and then we’ll explain what they mean. Once you’ve finished reading our helpful guide you’ll be in a much better position to make the right decision. Well, actually it does, as they will execute your trades in different ways and each have their own set of benefits. You may already have encountered some of the terms used such as DD, NDD, STP or ECN and be wondering what they mean and whether it makes a difference which one you choose. There are so many to choose from and there are a number of different broker types. *Not valid for EU traders, T&C applyIt can be a little confusing when you’re looking for a reliable Forex broker. ![]()
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