Who is a foreign exchange broker?
Currency broker called financial institution that specializes in mediation currency transaction. We will talk about the companies working on Forex. Novice currency trading you first need to decide on the criteria for choosing the currency broker - honesty, reliability, trading conditions. Becoming a customer of that company, a trader can think of trading and profit and not fear trick and worry withdraw any money earned, etc.
Types of Forex brokers
The market offers a large variety of companies that provide services for currency trading. These intermediaries are needed for small traders with small capitals. In the role of brokerage companies opposed by major banks, are accredited in the Forex market, as well as smaller companies, the so-called IBs. They work best forex bots well.
There are 3 kinds of Forex brokerage companies:
1. Companies with direct access to the exchange.
Most often, data brokers (BA) are big banks or financial corporations that sell large volumes and working with smaller B. For direct co-operation with the financial "shark" needs capital of one million dollars or more. It is clear that companies with direct access to the exchange, very little.
2. Dealing centers (DC).
It intermediaries themselves without departing from the stock market Forex, and enter into contracts for service with the banks, which are represented in this market. DC on accounts used all the tools of technical analysis, trading is carried out at the market rate. In most cases, the quality of service is good. Check all the technical aspects of trading is to install the trading platform and trading on a demo and real accounts (cent and dollar).
3. Closed area.
Closed sites are created by one or more companies to bring together the largest possible number of traders. This creates a private marketplace. Advantage - no problems with communication. The disadvantage is a small liquidity of those currency pairs that are not very popular.
Classification according to the method of currency trading brokers
1. Dealing Desk (DD).
Losing popularity kind of trade. Previously, foreign exchange brokers, using DD, except spread of transactions received basic income at a time when traders lose their deposits. Thus, the transaction is not displayed on the real market. Today, it is rare, with 99% B. NDD not create the illusion of trade and output trading on the stock exchange.
2. Non Dealing Desk (NDD).
Companies using the NDD-trade, have direct access to the currency exchange. Usually used five-digit quotes (see "What to choose - or four-digit five-digit quotes.") B. profits determined by the size of the spread and one-time commission on transactions, which is quite legitimate.
NDD can be of two types - normal NDD or ECN + STP.
Straight Through Processing (STP) - foreign exchange brokers who as intermediaries for trading the currency used by large banks or financial companies that are accredited in Forex. Interestingly, this is not B. may cooperate with one institution, but with a few - are thus guaranteed a full order processing.
Electronic Communications Network (ECN) - foreign exchange brokers, create your own trading system, where all participants to conduct transactions among themselves, exposing the application. During the execution of each application commission, which is the main profit ECN-broker. Spreads are defined here and floating proposals for purchase / sale, which come from the players on the market.
There are other classification B., depending on what the financial markets are used and which financial instruments are traded. We are talking about the stock exchange, precious metals or commodities exchange.
What currency broker to choose?
Based on the criteria of reliability and trading conditions, it is better to choose B. using NDD-trade. Thus, the trader can be confident that transactions are displayed on a real trading. Solvency issue does not rise - enough to find online sites, create ratings brokerage companies based on the feedback, the time to market, trading conditions and other characteristics.
Proven and stable currency brokers advise paying look to three: it Forex4you, Alpari and InstaForex. These companies have a good reputation in RuNet and offer the best trading conditions for forex traders.
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