It is a bridge between clients and liquidity providers, and there are no re-quotes when an order needs to be filled. This allows clients to access real markets with better and faster fills. No Dealing DeskĬontrary to DD brokers, NDD brokers use technologies without a dealing desk and route trade orders directly to liquidity providers. They are known to offer artificial quotes and orders are filled on a discretionary basis. They also try to find a matching long or short order from their other clients, before taking a countertrade or passing it on to a liquidity provider. They make money through spreads and by providing liquidity. The infamous term 'market makers' is used because these brokers usually take the opposite side of traders' trades. We usually refer to DD brokers as market makers. Electronic Communication Network (ECN) Forex Broker.Straight Through Processing (STP) Forex broker.Brokers without licences (non-reputable)ĭepending on the trading platforms we can have:ĭepending on the execution of orders, there are:.Usually Forex brokers can be divided into groups for: We can distinguish between several types of Forex brokers according to a range of criteria. But many people do not know the differences that exist between fully regulated brokers, such as the difference between ECN and STP Forex brokers. The USA - CFTC and NFA (Commodity Futures Trading Commission and National Futures AssociationĬhoosing a broker is the very first step you need to take to be able to enjoy your trading experience.The UK - FCA (Financial Conduct Authority).Japan - FSA (Financial Services Agency).The three countries with the most rigorous regulators are: Generally speaking, these organisations are actively supported by the government. For the purpose of defending people from fraud, many countries have established private or state organisations that regulate the Forex market amongst other things. Every broker should abide by the rules of a financial authority. Simply put, if a broker is not regulated, your money is not safe. When choosing a broker, always check if they are regulated by a relevant authority first. After all, Forex trading should be a potentially profitable experience. The number of Forex-related scams has significantly increased over the past few years, so it is important for you to be able to identify a hoax. The problem lies in the increasing number of unscrupulous companies marketing false information to traders. Unfortunately, many people wrongfully associate Forex (FX) trading with scams. It will help traders to understand the different types of brokers available by comparing differences such as how they process orders, the lot sizes they allow, whether they require dealing desks or not and more! This article will explain the differences between an STP and an ECN Forex broker and the Hybrid model (a combination of both ECN and STP).

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