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VS |
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| Dealing Desk (DD) |
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No Dealing Desk (NDD) |
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Instant Execution is a feature of a Dealing Desk broker |
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Market Execution is offered by No Dealling Desk brokers |
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| Price quotes come from Broker |
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Price quotes originate in the Market |
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Forex Broker acts as a Marker Marker and "makes market" by creating own prices |
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Forex Broker receives prices from Liquidity Providers |
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| Order filled at the exact price requested |
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Order filled at the current market price |
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If an order cannot be filled at the exact requested price, it's cancelled |
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If order cannot be filled at requested price, it gets filled at the next available price |
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| Price cannot improve |
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Price can improve |
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Order either filled or killed (FoK order type) |
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Price can improve in trader's favor, as well as become less attractive |
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| Spreads are usually higher |
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Spreads are tight |
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Dealing desk brokers are known to charge higher spreads |
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Spreads with a No dealing desk broker starts as low as 0 pips |
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| Fixed spread |
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Floating spread |
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Instant execution comes with fixed spreads |
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Market execution always comes with floating spreads |
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| No commission |
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Possible commission |
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Dealing desk brokers don't charge commission |
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With DMA & ECN brokers - commission applies.
STP brokers might not charge commission |
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Requotes are common, more so during volatile/fast moving markets |
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Requotes are eliminated, since orders can always be filled at next available price |
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Slippage not possible. Some brokers might allow setting "price deviation" to accept minor shifts in price |
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Slippage is normal part of trading with Market Execution. Slippage occurs every time price shifts from originally requested. Slippage can be in trader's favor, as well as against |
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| Stops & Profit levels can be set in advance |
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Stops & Profit levels cannot be set in advance |
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Instant execution allows setting Stop Loss and Take Profit orders prior to placing a trade |
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Stop loss and Take profit orders cannot be set prior to order placement, only after a trade is open |
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| Execution is not guaranteed |
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Execution is guaranteed |
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Execution depends on brokers' ability to accept & counter-trade position |
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Execution depends on liquidity providers, where liquidity is often plenty |
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| Option to refuse new price quote |
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Automatic fill on all orders |
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If price is re-quoted, traders can refuse the new price |
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Orders filled automatically at current available market price |
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| Slower execution speed |
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Fast execution speed |
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Order execution takes few seconds |
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Order execution done in fractions of seconds |
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| Restrictions on trading styles |
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Unrestricted trading |
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Possible restrictions on trading styles: scalping, certain EAs, news trading etc |
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No limits on trading styles, as a rule (double-check with your broker) |
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