FxIB Opts to Offer Forex Traders Non-Dealing Desk Trading Platform

TALLAHASSEE, FL - There is a growing perception that Forex traders are at a distinct disadvantage trading currencies with dealing desk brokers who offer currency trading platforms. Instead of trading against a single broker, non-dealing desk trading allows spot traders to trade against a dozen or more banks and FCMs.

"When it came to making a broker recommendation, we were pretty much driven by what appears to be a growing awareness that traders aren’t being given an even shake trading currencies with a dealing desk broker,” John Keister, ForexInterBank’s CEO, says.

“Trading through a dealing desk offering fixed spreads, traders have but one bid/ask price for each currency pair to trade against and the quotes the broker provides bear little resemblance to the actual market. It’s a take-it-or-leave it proposition,” Keister says.

Through a non-dealing desk broker, traders are given the opportunity to trade against as many as 17 participating banks,” Keister says. “The actual number of banks offering quotes, of course, varies depending on two variables - the time of day and a particular currency pair’s relative popularity. The greater the demand, the greater the number of players.”

Perhaps the biggest difference between dealing and non-dealing desk trading are trading costs. “Dealing desk brokers not generate income from the fixed spreads they quote and can range anywhere from 2-5 pips, they also make money trading against their clients.

By contrast, non-dealing desk costs are limited to a flat transaction fee. “Trading through ForexInterBank spot traders pay a single pip per round turn,” Keister reports. “and traders never have to worry about broker manipulation because our brokerage provider has nothing to gain trading against them. Participants displaying rates on a non-dealing desk platform compete for top positioning (best price) so less attractive offerings migrate to the bottom of the list.”

According to Keister, it is common practice for dealing desk brokers to hedge their trades through their a non-dealing desk. That fact, he contends brings up an interesting question. “If dealing desk brokerage is the key to success, why aren’t brokers opening accounts to trade the same way they’re advising their clients - off-exchange against other dealing desk brokers?”

Another difference between dealing and non-dealing desk brokerage, according to Keister, is that traders don’t have to deal with “reorders” or “requotes”. A reorder/requote is a counteroffer generated by a dealing desk broker who cannot or will not execute a call on the terms originally submitted by a trader.

“Sometimes reorders occur because the market is too volatile for the market maker to execute the call quickly enough. Other times, as some suspect, they are not filled because it’s not to the broker’s advantage to fill them,” he said.

“Traders never see a reorder when they trade through a non-dealing desk because the broker is a facilitator of trading, not a market maker per se,” Keister concludes.”What makes a non-dealing desk trading even more attractive is that spot traders have the opportunity to become market makers themselves, bidding between spreads.”

To learn more about non-dealing desk trading, readers are invited to visit ForexInterBank.com. A chart contrasting the differences between Forex dealing and non-dealing desk trading is provided.

About ForexInterBank

ForexInterBank is a Forex education and training provider. It first gained widespread industry attention when it The Forex Simulator, a desktop training application that traders can use as an alternative to the traditional, real time demo trading account. Using the simulator’s fast forward and rewind features, traders can test trading strategies against historical and current data feeds and in the process learn how to trade the Forex in a tenth the time it takes using a live demo account. ForexInterBank is not an FCM. It is an introducing broker.

Focus: non-dealing desk