CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
Before you make a choice between the NDD brokers and the MM brokers, it is essential to understand what the two brokerage models are all about.
MM brokers refer to brokers who are classified as market makers. These are brokers who operate a dealing desk and therefore “make the market” by acting as full-scale intermediaries between traders and the liquidity providers. Market makers have the following characteristics:
NDD forex brokers is the second category of brokers. These are brokers who have the following characteristics:
There are also to sub categories of NDD brokers:
The difference between the two models is that while the STP model sometimes offers a restricted number of liquidity providers, ECN brokers tend to offer more liquidity providers and therefore give traders a better choice in pricing. This is an important distinction because some brokers may claim to be a STP NDD broker and simply route their orders to a single liquidity source, a MM broker which they also own.
Some brokers may also run a hybrid model where they execute larger trades via the STP model and their smaller trades through a traditional MM model. This is because liquidity providers will not accept the smaller trades made possible through the MM model.
The major benefits of trading with NDD brokers are:
Although there are many advantages with NDD brokers and there are some disadvantages. The main barriers to using a NDD broker include:
Typically, traders with a small amount of capital can only open and operate accounts with dealing desk brokers or market makers. This is because capital requirements are much smaller and the platforms offered are easier to use.
Because NDD brokers charge a commission per trade or on a per month volume, it is not economical for smaller traders to use a NDD broker. More often it will be cheaper for a trader with a smaller account to use a “no commission” MM broker, where they are only paying the difference in the spread per trade.
Hence the main factor will be your deposit size and trading activity. If you are a high volume trader and meet the minimum deposit requirements for an ECN account, a NDD is generally the best option. For example to qualify for an ECN account with LCG, clients have to maintain a minimum $10,000 account balance. On top of that, to qualify for their lowest commission tier, clients must have a trading volume of over $2 billion per month.
Forex.com scored best in our review of the top brokers for market maker , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade EURUSD
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.90||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|