Do you want to delve into forex trading in SA and in search of knowing the details regarding the types of forex brokers? If yes, then this article has the ultimate solution.
Types of Forex Brokers
There are multiple types of forex brokers that are providing their services throughout the world. Each of them has some merits and demerits. So, depending upon your requirements and needs, you can go for anyone. Here we are going to share the details related to them:
Dealing Desk (DD)
This broker has the market maker model. Such market makers or dealing desk brokers commonly offer fixed spreads. The majority of dealing desk brokers work by selecting the quote either above or below the real-time prices of the market. The newbies or the experts who don’t prefer to work with the liquidity providers can go for this broker type. The dealing desk brokers usually get the payment via spreads.
No Dealing Desk (NOD)
No Dealing Desk forex broker or NOD allows the brokers to get a direct reach into the interbank market. A real NOD broker doesn’t need the re-quoting of the prices. In alternative words, we can say that they get the trading’s chance without having any restrictions. The NOD brokers give the opportunity to utilize unfixed and low spreads.
The spreads don’t have a fixed value; therefore, there is a huge possibility of a notable increase in the value in case of enhancement in the volatility owing to any economic announcement. When it comes to getting paid, the NOD may change the commission or elevate the spread on each forex trade.
Electric Communication Network
This type of broker usually provides and shows the real order book that includes the prices provided by the multiple banks in the interbank and the processed orders. To improve the market’s transparency, they provide information to all the forex markets’ participants. In addition, they charge the commission on all the traded volumes. The reason behind it is us earning money. Furthermore, they also permit the traders or investors to process the transactions.
Straight Through Processing
Straight Through Processing (STP), brokers can transfer the orders of trading into the liquidity providers. In addition, they usually don’t intervene in order execution transactions. A large number of STP forex brokers can work with multiple liquidity providers. It is also worth mentioning that an STP broker works with a lot of liquidity providers, so it offers their traders more chances to get success in the forex world.
If you want to get success in forex trading, then it is extremely important to choose such a broker that offers you a lot of prestigious services. In addition, make sure that they are not fake and have a tendency to provide you scam-free and authentic services.
To sum up the article, we would like to say that forex trading is gaining a lot of popularity throughout the world. There are a lot of complications associated with it that every beginner should need to know.