Review broker FBS DD or NDD

To Ismail,

Typically, Dealing Desk (DD) brokers can be identified by the following characteristics:

They set many complicated trading rules. Because the element of conflict of interest between the broker and the client is very high, the clauses in the trading rules are deliberately made to give the broker a way out to avoid fulfilling obligations as promised to the trader.

On the trading platform, there are often delays or accelerations in order execution, price stagnation, price manipulation, and so on. The goal is to make it easy for traders to lose.

To keep traders interested, this type of broker usually offers a lot of promotional enticements and bonuses. For example, leverage up to 1:1000 or more, Fixed Spread (not in line with the market), deposit bonuses of several hundred percent, the ability to transfer via third parties, and others. The target is indeed to make it easier for traders' funds to enter their system.

 

While Non-Dealing Desk/NDD brokers are the opposite.

Non-dealing desk brokers only profit from the spread and trading commission. NDD forwards orders (buy/sell positions) from traders who are their customers to liquidity providers who are partners of the broker (can be large banks or even other large brokers).

It is impossible to set a fixed spread. In the forex market, the spread is always changing according to market conditions. Because NDD brokers channel orders directly to liquidity providers, they cannot intervene in prices to benefit them. The spread is a Floating Spread (Variable) that can change, can increase or decrease at any time. The leverage provided is not too high, usually up to 1:200 - 1:500.

 

If the broker you mean (FBS broker) has the specifications as above, then it is likely that this is the type of broker. To prove it, you can try with a small amount of funds first.

For large funds, it is better to choose a broker that has recognized regulations. The initial account opening may seem complicated, but this is done for the security of customer funds.

More about DD/NDD brokers can be found at this article.

Thanks

Hello master, I want to ask, if we are with a DD broker, is it easy to withdraw funds? and does an ECN account actually require large funds?

@Ahmad: I want to ask, if we are with a DD broker, is it easy to withdraw funds?

It depends. Usually, for small withdrawals under $1000, the process is fast and there are no problems. However, if the funds are large, you have to be careful. DD brokers are suitable for small-fund traders and beginner traders who want to learn. DD brokers provide services that are difficult to be provided by ECN brokers, namely commission-free accounts, very large leverage, and small minimum deposits.

Logically, dealing desk (DD) brokers do not throw your transactions into the real market (liquidity provider/interbank) so that both losing and profitable positions will be 100% borne by the broker. Thus, if you are consistently profitable, the broker will pay your profits with their cash money and this will conflict with their business interests.

For example, if you trade $10,000 with a DD broker and can consistently profit 5% per month, the DD broker will pay you $500 per month from their cash money.

 

...and does an ECN account actually require large funds?

The lowest minimum deposit for an ECN account is $200. ECN brokers are usually stricter in trading rules and there are no fantastic offers, bonuses like DD brokers.

For large funds, I recommend forex brokers that are already regulated by internationally credible regulatory bodies, namely: CFTC, NFA, FCA, FINMA, MiFID, and ASIC.

Credible regulatory bodies are those that have been tested and recognized worldwide, and provide strict sanctions to brokers if they violate the agreed terms. These regulatory bodies are also responsible for the security of client funds.