Dealer Desk Vs Non Dealer Desk

Could someone explain the difference Thanks

Hi philly
There will be fuller explanations if you search for 'brokers' in the forum search, but in simple terms - Dealer Desk sits between you and the big money markets and can (and will) trade against you. - Non Dealer Desk is arranged to put you straight through to the main market and shouldn't trade against you.
I think Non-dealer desk gives you the true exchange price (or as near as possible) and their charges are by fees on each transaction. They don't have to screw with you to make their money by manipulating the spread.
Peter

I was listening to "Steve", who heads MB Trading, this morning on a webcast. One of the listeners sent in a question asking him to explain what had happened to her while she was trading the news. She describes a situation in which the price she paid was some 100 pips higher than the price she thought it was going to be.

His explanation was that the banks can and do do is to raise prices at the beginning of news announcements to protect themselves, since they do not know the direction in which the movement will go. He stated that since MB Trading had no dealing desk there was no protection from large shifts like this. He stated that dealing desks in effect protect the trader from these overly large shifts by restricting trading at those times. This gives a somewhat different twist on the role of dealing desks.

I guess you can say you have six in one hand and a half of a dozen in the other.

Have a read of this, Philly, http://en.wikipedia.org/wiki/Forex_scams and then scroll down to Additional disadvantages when dealing with market makers which gives more info.
Peter

According to the president of Oanda the NFA requires brokers to hedge trades so that if you buy your broker must sell an equal amount. This is technically trading against you but is required by the NFA. Many brokers will abuse this and add spikes to the data that will kick in stops or limits that are placed say 20 pips each side of the price. Brokers can make more money by trading against you than with the spreads.

Id like to see a broker trader against me. =), some platforms use novice accts to estimate the order flow on trades, to see what direction the novice is betting on in a given pair. More likely then not they can take a speculative position in the opposing direction.

=), Imagine a seasoned trader, playing a novice.

Thanks PeterFM. That was interesting reading. It gives me a different perspective on the ugly-side of trading the FX which I think ever person involving themselves with FX should know. Nevertheless, you must studying and research the firm your dealing with and always ask question.

Can someone recommend a list of brokers that do not use a dealing desk? Much thanks.

According to this Blogspot link so kindly provided by Johndoe, the Non-Dealing desk trader, EFX DOES have a dealing desk which was posted in another thread that they don't.


Also, interestingly, a poster named Moonchild in this thread, stated that MB Trading has no dealing desk stated by a manager of MB trading and yet, on this same blog MB trading is also listed as having a dealing desk.

I thought I found the motherlode of brokers in DBFX last week. It's a division of Deutsche Bank. And they are also listed as having a dealing desk. But they still crush all when it comes to security of funds. I'd rather have my money here than anywhere else.

So now, after reading this blog, I only know of 2 non-dealing desk brokers/ECN'S. Coesfx and Propfx.

I'm starting to think it's actually not that important to require non-dealing desk. To me what's important is proper representation of the market, execution and security of funds. I guess they know who to trade against and who not to. If your a losing trader using high leverage, they trade against you. If your a winning trader using low or high leverage, they hedge your trade automatically in the real interbank market and don't trade against you.