There are kinds of Forex trading world. Instead of no dealing desk and dealing desk broker, there is a hybrid broker.
This broker is the combination between no dealing desk and broker dealing desk. It means that it is a combination of one of the ECN (Electronic Communication Network)/STP (Straight Through Processing)/DMA (Direct Market Access) with the dealing desk broker.
Generally, a hybrid broker uses a certain rule which sets up the regulations in order. This rule is set based on the kinds of the user account. For instance, if the amount of Lot, Frequency, or Equity is under X, so the dealer will execute. Otherwise, if the value is above X, the dealer will execute in the form of STP, ECN, or DMA.
How to Distinguish A Hybrid Broker and A Usual Broker
Actually, it is really difficult to distinguish whether the broker is a hybrid or it is just a usual broker. To prove it, a trader should be brace to try and feel it. Another alternative is seeing the broker’s reputation, including a regulator.
To emphasize this point, an order lot with a lot 0.1 or below by using Cent or mini account. Usually, it can’t be sent to the liquidity or the markets because the value is too small. This situation forces the broker by using the dealing desk. If there is a high volume in the form of order, so the regulations should be based on the STP/ECN.
Also, some forex specialists offer one kind of execution for specific records and another sort for different records. A case of this may be the place enormous volume brokers can open up an ECN account, while smaller than normal parcel merchants need to experience a managing work area since huge liquidity suppliers, for the most part, have no enthusiasm for executing limited quantities like that.
A case of a particularly regular mixture includes mixing the ECN or DMA and STP models together to make a completely electronic forex managing administration. This famous blend permits a forex representative to completely robotize the request section, managing spread evaluating, and exchange execution parts of their arrangement execution business.
