Before proceed, you need to know about the broker. Simply to understand, a broker is an agent or middleman. In the Forex market scenario, agents are playing a vital role as they create link between the buyer and seller at the market place. According to Forex history, big and successful Forex brokers have big banks those provide them accurate market price and these market prices are transferred to the traders as the bid price. |
To gain full knowledge regarding brokers, one should know the different type of brokers available in the market. These are generally known as:-
• DD • NDD • STP • ECN
These are mostly available and workable brokers in the market today.
The full form of DD is dealing desks. Mainly Forex those operate by dealing desks and quote fixed spreads. A DD earns by trading on behalf of its clients and via spreads. In another word, a DD is also known as Market Maker as they initially make the market for the traders. When the traders want to sell, they’ll buy and when they want to but they sell to them because they will always make the exchange run for the traders. A trader never have seen any market quotes which allows Dealing Desk brokers control the quotes from where they need to fulfill the order. Generally, they make money from the bid or ask price which is more often than controlled. Most of the micro accounts are controlled by these DDs because these are not require a large deposits and they are willing to give these traders in hard time.
NDD stands for No Dealing Desk. These brokers are working different than DDs and they allow the access to the interbank market without passing special orders through the dealing desk. With no dealing desk brokers, they won’t allow any re-quotes on specific orders and no extra pausing during order confirmation. This allows trading during the news hours without any restriction. They are earning either charging extra commission for trading or increasing the spread.
STP stands for “Straight Through Processing”. These types of brokers send orders directly from clients to liquidity providers and they send to banks those have already their accounts to banks. In rare time, STP brokers are regarded as the just one liquidity provider and other time more than them. The main thing is that, the more there are banks and liquidity in the system, the better experience will fill for the clients.
ECN stands for “Electronic Communication Network”. They maintain highest degree of transparency and generally regarded as the purest that a Forex broker should be. This is because for their services and qualities. These brokers allow clients to talk with other clients regarding the orders. This type of brokers provide a perfect marketplace where all its participants trade against each other by sending proper competing bids and offers into the system.
Now FX brokers Australia are considered as the most reliable brokers and they have a longer period of experience in currency trading.
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