Tag: market makers

Dealing desk and Non Dealing Desk – Differences

Dealing desk and Non Dealing Desk – Differences

Trading Articles
Most traders often get confused between the types of forex brokers. At the outset, we have Market Markers, ECN and STP forex brokers which form the Dealing Desk v/s Non Dealing Desk type of brokers. To the layman, these terms might seem confusing, perhaps greek and latin as well. In this article, we explain the difference between an ECN and STP forex brokers. Before we continue further, let us first understand the forex broker dealer types, primarily the Dealing Desk v/s Non Dealing Desk brokers. Market Makers, also known as Dealing Desk forex brokers act as a counter party to your trades. In other words, when you trade forex with a market maker, you are in effect trading forex against the Market Maker's traders. The term dealing desk is derived from the fact that there is someone on th...

Forex requotes and how to avoid them

Trading Articles
What is a forex requote? A forex requote occurs when there is a price difference between the price you decided to enter or exit a trade by clicking on the buy/sell and the actual price on the market by the time your order reaches your forex broker. Forex requotes is a common phenomenon when the markets are moving fast and/or there is low liquidity. A currency pair with more liquidity can be easily traded without significant impact on it's pricing because of the high volume of of trading activity. Forex requotes is also referred to as slippage. Ideally your forex broker should have high liquidity and be tied to different liquidity providers in order to successfully execute your orders without requotes/slippage. Forex requotes are often misunderstood and traders do tend to jump to the...

What are Market Makers in Forex Trading

Trading Articles
Market makers make or set both the bid and the ask prices on their systems and display them publicly on their quote screens. A market maker provides liquidity for a particular currency pair and stands ready to buy or sell that currency by displaying a bid and offer price. A market maker takes the opposite side of your trade and has the option of holding that position or partially or fully offsetting it with other dealers, managing their aggregate exposure to the market. Market makers earn their commission from the spread between the bid and offer price. The exchange rates that market makers set are based on their own best interests. On paper, the way market makers generate profits for the company through their market-making activities is with the spread that is charged to their customer...