There are many kinds of broker in Forex trading. Instead of no dealing desk broker, in this part, the dealing desk broker is being discussed. Two kinds of the broker which operates its own markets are a big and small dealer.
Dealer (dealing desk) is a dealer broker as it can create its own markets by using the user. In other words, it is a bookie. Generally, this broker gets the profit from the losses of the users. If the user gets the profit, so the broker will pay the broker cash, not from the real market.
Not all brokers serve in a bad way. However, as a trader, you should be careful and thorough. Before you choose the broker, make sure it is legal and registered (regulated) by the government as the brokerage. Make sure it has also a good reputation. Having a good reputation is one of the considerations of why people trade in the market. If one day there is an error or problem, you can secure yourself and sue to save you.
To emphasize this point, find out a good reputation broker will also pay you when you get a profit. Also, there is no doubt and worry about the funds that you have invested in.
A Small Dealer Broker
In other words, it is an unregulated broker (bucket shop or street vendor). The characteristic is that the office is in an offshore or city.
The trader should avoid this kind of broker. It potentially manipulates the transaction. This condition can lose you for the thing you never did.
Generally, a bucket shop broker has no regulations. At some time, the registration refers to the company, not as the brokerage. So, you have to be careful and make sure you have learned the broker.
This kind of broker has 98% permission to transfer the money to the third party/a person, use the voucher, use Money Changer to the local bank, an easy registration without any completed verification.
They also give the limit to the using of trading techniques, such as scalping, martingale, and so on. On the other hand, in its system, it has actually installed an automatic script. At this point, it can resist the technique (Virtual Dealer).
In addition, the condition offered by the bucket shop is often out of the markets. For instance, too high leverage (1:1000 above) and a low spread (1 pip fixed up to 0 pip fixed). On the other hand, the spread has always changed or fluctuated every second.
This broker sometimes gives an unlogical bonus (more than 20%). The aim is to persuade the clients to save their money over there. This will lose its money either.
So, be careful of trading in a small dealer broker. Make sure that you truly understand the trading and broker. To emphasize this point, keep your emotions to be stable and not believe too much in the high bonus in trading.
