Why trejdety the account started to massively NDD and ECN?
There are several formats of Forex accounts, in which the broker (dealing Center) allows a trader to buy or sell financial instruments: the most popular STP and ECN accounts. Also there are such trade as DD and NDD. Consider these concepts in more detail.
What to choose: DD or NDD?
Recently, growing in popularity are services NDD or Non Dealing Desk, that is, without the use of so-called "Board (backgrounds) dealing, in other words directly. If you use the traditional method of DD-there are some problems that can potentially allow a broker to trade against its clients. The timid traders can express grievances, lured by the opportunity to correct these market "under itself", etc.
One of the shortcomings of the NDD trade, many brokers are high requirements to deposit compared with dd. Good except there is broker review where the minimum deposit for account 'Cent NDD"of USD 1, and"Classic NDD"of 100 USD. On the other hand, job broker and trade is to provide an opportunity for a small deposit, combining transactions on the same instruments and outputting their common lot on the foreign exchange market.
The availability of NDD-trade raises the reputation of the broker in the eyes of the trader. Also for brokers to trade on the NDD requires many licenses that also contributes to the confidence of the customers. So the choice is clear-NDD .
It is important to distinguish between the notion of Instant Execution and Market Execution. The first option-execution of orders on a given trader price, also known as "instant execution", the second is at market price. In the second case, the price could be better and worse than the one at which the trader wanted to get in position. In the first case is by no means guaranteed instant execution orders, but the opening is precisely specified by the trader. A brief conclusion-if your trading strategy involves the precise value of entering a position, use the Instant Execution. Also, it becomes clear why order can be opened by a broker is not requested by the trader.
Let's look at the differences between Forex account type of STP and ECN.
Forex account type STP
STP or Straight Through Processing (the literal translation of "Straight through processing") means the direct application of the trader the bank-partner of your broker. The more the number of such banks, which are liquidity providers, the more advantageous conditions for execution of orders. In turn, banks are offering competition between each other, so the order will be executed according to the principle "the first one who has the best price." The dealing centers have an agreement with our partners-suppliers of liquidity that each order will be executed at market prices clearly stop orders in the market are not sent, and banks are obliged to sell liquidity when passing the warrant trader. The trader Gets the most favorable trading conditions, and the broker is able to earn money on commissions on closed deals. Most effectively eliminates the possibility of fraud by prikarmanivaniâ "merged" deposits, forcing the broker work to increase volume and frequency of opening deals by trader (promotions, etc.)
Forex account type ECN
ECN trading terms:
* Minimum deposit-200 USD
* Spread of 0.2
* Minimum lot-0.01
ESN or Electronic Communications Network ("electronic communications network") is a format of Forex account for the experienced ones, when commercial operations do not pass through intermediary banks, and are directly to the stock exchange Forex. As a result of the trade participants interact with each other directly, without intermediaries and requoting (slippage). With each order to buy or sell available to other bidders, visible in the so-called "glass applications". Traders see the volume of each application that allows you to use new trading opportunities previously unavailable to currency speculators. For example, scalp, based on the volume of applications, easier, and more reliable-how do players on the stock exchanges of shares. In this case, the spread is the price difference between buyers and sellers and bidders can place orders inside the spread ", which will change the border prices (top or bottom).
Thus, using ESN Forex account, traders receive at least 2 advantages:
1. the execution of an order at the best price.
2. openness and transparency of the transactions is the existence of "glass applications", i.e. the ability to see other suggestions for the selected symbol.
You can compare the conditions for ECN and other types of accounts
So, if you previously tried to broker an order trader on your behalf, you can now do it directly, without going through a broker. Thus, the order of an individual, for example, can change the dynamics of the market.
ESN allows you to automatically perform the opposite orders are some of the options (Tools, price, quantity).
The best known such large ESN-system Currenex and Atriax FX Alliance, and (She).
To sum it up. The best solution for trading in most cases can be considered the selection of a broker to trade Forex ECN accounts on the NDD. This format can only be assured of honesty of the broker and has a number of advantages for the trader.
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