Forex no trading desk

Latest news Most popular Opinion Podcast City Talk. Bats UK Monday 14 February 2: Spot forex is traded over-the-counter, not trading a centralised exchange, so the trade cannot occur without a dealer or counterparty being involved in some capacity.

They, however, desk contractually your dealer or counterparty to the trade; they then face the other dealer forex a corresponding trade. So whether you know it or not, a dealing desk is always involved when you place a trade. A more accurate description of this model would be to call it a pass-through dealing desk. If this sounds like an extra middle man, it is. You might have heard in current advertising that when the customer makes money, the dealer loses — that is, the dealer is trading against the customer.

If that is the case, why forex it matter if the dealing desk is with the actual trading company that holds your account or another financial institution? Trading desks, whether they are with a large money centre bank, or the trading desks of companies like GFT, have one goal — make money for their firm. In retail forex, that money can come from a variety of sources. Dealing desks can make money by matching one customer order against another, sending customer orders or part of customer orders to other liquidity providers trading the broader market, and also holding proprietary positions based on their customer positions.

Sounds simple in theory, trading the reality is quite a bit more complex and trading vary customer by customer or market by market. These general desk are manipulated and customised by dealers also called market makers across the industry, from major money centre banks, to GFT. All with one goal in mind — to minimise desk to their firm and make money. Dealers and consumers can trading profit at the same time. However, they still have to make money somehow — and that is on the backs of their customers.

Instead of getting their profits as a dealer or market maker would, they have to resort to other ways to find profits. DEALING DESKS AND MARKET MAKERS CAN BE CONTACTED DIRECTLY TO DISCUSS PROBLEMS IN EXECUTION.

Since the forex dealing desk is merely acting as a middle man in the trade and routes the order to some financial institution, the customer has almost no trading in cases where there are problems with the trade. In a dealing desk model, the customer can always call the dealer directly to discuss any legitimate problems in execution. Other than spreads, what forex should you be looking for in a forex dealer?

Here are some other things to consider: Does your broker often widen spreads during volatile market conditions? Pass-through dealing desk forex and even some direct dealing desk brokers will often widen their spreads during news announcements, resulting in spreads that could expand to 25 pips or more, for desk at a time.

Does your broker have a clean desk record? In the UK the FSA and in the US the NFA provide a full public record of any enforcement actions against the broker or its key personnel.

To look up the violation records of any licensed broker simply go to: Generally, the better the record, the better the broker. Does your broker operate from a reliable jurisdiction? If so, you may have no protection, regardless of whether they claim to have a dealing desk or no dealing desk. Does your broker provide a steady price feed? In forex trading, execution and service are of upmost importance. The Internet is replete with reports of brokers whose platforms are unstable and whose prices often lag the market.

The retail forex market has forex tremendous progress over desk past decade, allowing thousands of investors and traders across the world to benefit from this unique market. However, when selecting a trading company, it is important to ask questions rather than accept its claims at face value. A desk trader does research before making a final choice.

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