Forex trading is quickly becoming a very popular investment for stay-at-home moms. Online forex trading allows users to transition from one market to another, which means the trading opportunities are available 24 hours a day, five days a week. It is also one of the most accessible financial instruments today.
To get started, you simply need to find a good forex broker that suits your specific needs. While searching for a good broker, you have two major account or broker types to choose from: market maker and non-dealing desk. In this article, we are going to focus on the latter and talk about why you should consider getting an NDD account from a reputable broker.
Until very recently, almost all forex brokers were market makers. What that means is that they also opened trades for their own accounts rather than exclusively processing orders from investors like you and me. There are times when the brokers’ trades go against ours, and that’s normal due to the nature of the forex market.
Non-Dealing Desk (NDD) brokers don’t have accounts of their own. They simply forward your trades to the market and process transactions faster. Instead of making money from their own trades, NDD brokers make money from the spread added to forex pairs. You can expect a more reliable network and faster transactions with NDD accounts.
As mentioned before, NDD forex brokers are growing in numbers. The demand for Electronic Communication Network (ECN), Straight Through Processing (STP), and Direct Market Access (DMA) accounts is growing, and it is not surprising to find more brokers offering these accounts. ECN, STP, and DMA accounts are all NDD accounts, by the way.
Finding ECN brokers is easy thanks to InvestinGoal. The site has a comprehensive list of ECN brokers for you to choose from, with top names like FxPro and Pepperstone included on the list. It also details the features and services offered by each broker, so finding the right broker to engage according to your specific needs is certainly easy.
Secure and Private
Another major advantage of using NDD brokers and an ECN account is the extra layer of privacy offered by the brokers. All ECN traders are executed anonymously. That anonymity ensures that all of your trades are at market price, without any deviation in the chart and price movements. All the broker does is pass you the price without modifications other than the spread.
ECN accounts are also more reliable when the market is extremely volatile. After a big Fed announcement, for instance, you don’t have to worry about problems like slippage or orders not being executed on time because of a price jump in the market. ECN accounts are more reliable for scalping and other short-term trading methods too.
NDD brokers and accounts have their disadvantages, and they are certainly not for everyone. That said, these reasons are worth considering the next time you look for a broker or thinking about opening a forex trading account.