Best No Dealing Desk Brokers

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Trading with non-dealing desk (NDD) Forex Brokers ensures traders have access to spreads on the interbank market: this potentially cheap cost of trading is what attracts so many Forex traders to the best NDD Forex broker they can access. NDD brokers avoid an obvious conflict of interest between traders and brokers, and how to determine which are the best non-dealing desk Forex brokers is explained below.

1
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best all around broker
High floating leverage + fast execution
2
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
ECN-style trading
Daily market research and Autochartist access
3
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
4
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Trade 1,000+ financial instruments
Experience low, competitive spreads
Multiple funding and swift withdrawal options
5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Solid broker for scalping and hedging
Institutional-style trading opportunities for retail traders

While Forex no dealing desk brokers are ideal for high-frequency traders, scalpers, and other very short-term traders, this broker type is not suitable for all types of traders. If you are not sure whether this broker type is right for you, read on below.

I have identified the best non-dealing desk Forex brokers and outlined their potential advantages and disadvantages.

Best Non-Dealing Desk Forex Brokers at a Glance

Best NDD Broker for Australia: FP Markets

Best NDD Broker for micro accounts: Forex4You

Best NDD Broker for fast trading execution: FXPro

FXTM

5.0/5 in this category
In Summary
Best all-around broker with high floating leverage and fast execution

We have made FXTM one of our top-rated brokers because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.

Pros
  • Excellent commission-based Forex pricing environment and transparency

  • Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app

  • Quality market research and educational content for beginner traders

  • Proprietary copy trading platform, low minimum deposit, and high leverage

Cons
  • Limited choice of cryptocurrencies and commodities

FP Markets

5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500.

fpmarkets is an ASIC-regulated Australian brokerage which launched in 2005. For most traders, the unique selling point of this broker is in the extremely wide range of tradable assets offered, providing the opportunity to trade over ten thousand individual stocks and shares including publicly quoted Hong Kong and Australian companies. Ffpmarkets also offers 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin. fpmarkets offers an unusual hybrid ECN/STP execution model, meaning their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.

FP Markets Pros & Cons

Pros
  • Choice of trading platforms and auxiliary trading tools

  • Very competitive cost structure and excellent asset selection

  • Low minimum deposit requirement and leverage of up to 1:500

  • Well-regulated and trustworthy

Cons
  • Availability of Iress geographically restricted

AvaTrade

5.0/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade is one of the largest Forex / CFD brokers and well-known for offering their clients a choice of fixed or floating spreads. They have a very high and strong level of regulation. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava offers maximum leverage on Forex currency pairs as high as 400 to 1. AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. 2 bonds and 6 ETFs are also on the menu.

Pros
  • High-quality educational offering via SharpTrader

  • Excellent choice of trading platforms catering to various trading needs

  • Broad asset selection and cross-asset diversification opportunities

  • Well-regulated and trusted broker with oversight from a central bank

Cons
  • Trading costs competitive but nothing special

Eightcap

4.5/5 in this category
In Summary
Competitive pricing + excellent daily videos

Eightcap Pros & Cons

Pros
  • Low minimum deposit and high leverage of up to 1:500

  • Competitive cost structure

  • Excellent technology infrastructure and seasoned management team

  • Daily research and quality educational content

Cons
  • Limited leverage in some areas

BlackBull Markets

4.5/5 in this category
In Summary
Best ECN trading environment, with scalping and hedging

BlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.

BlackBull Markets Pros & Cons

Pros
  • ECN/NDD execution model with deep liquidity

  • Institution-grade pricing for retail traders via proprietary price aggregation

  • ZuluTrade and Myfxbook for social trading

  • Leverage of up to 1:500

Cons
  •  Limited deposit options

How is a No Dealing Desk (NDD) Broker Different?

A no dealing desk broker unlike a dealing desk broker passes orders from traders to the market without intervention, hence the term no dealing desk. It ensures conflict-free order flow between the client and the market, where the NDD broker provides the necessary connection. Since all Forex transactions occur on the interbank market, trading with NDD brokers makes sense, but it is not ideal for all traders or trading strategies.

NDD Brokers for Scalpers

Most NDD brokers offer traders access to raw spreads without adding mark-ups. This should create the best conditions for scalpers and high-frequency traders. Since NDD brokers who refrain from manipulating interbank market prices must earn revenue somehow, they levy a commission on every trade. In most cases, the final trading costs remain well below those charged by market maker or straight through processing (STP) brokers who grant traders commission-free pricing environments.

Before looking at a cost example, traders must understand the three most used abbreviations and know the difference. When reading about NDD brokers, many use ECN and STP interchangeably.

What do NDD, ECN, and STP mean? What are the differences?

  • NDD (no dealing desk) and describes the business model of the broker, particularly the order execution aspect. An NDD broker works with many liquidity providers, sourcing the best bid and ask prices. Traders get access to interbank market pricing, raw spreads and pay commissions for this service. There is no conflict of interest between trader and broker, unlike market makers or dealing desk brokers.
  • ECN stands for electronic communication network and connects to the interbank market. ECN brokers execute orders anonymously, but order execution at given prices is not guaranteed. An NDD broker may use an ECN but does not have to. NDD brokers may work directly with numerous known liquidity providers, while an ECN broker can have a dealing desk.
  • STP is an abbreviation for straight-through processing. It refers to the post-order and post-trade communication between execution counterparties. NDD brokers may use STP, but not all STP brokers are NDD brokers. STP is the most misused term in trading, as most traders mistake it for the order execution they receive from their broker.

In Summary

  • An NDD broker typically works with several liquidity providers to source the best bid and ask prices available on the interbank market. An NDD broker does not maintain an internal order book or act as a direct counterparty to traders. It only provides access to the interbank market for a commission.
  • An NDD broker generally does not use an ECN, and not all ECN brokers are NDD brokers. There are no guaranteed fills via an anonymous ECN. Traders should understand that a broker offering an ECN may still manage an internal order book and trade against clients.
  • Many brokers offer STP, but that does not guarantee the absence of a dealing desk. STP does not refer to order execution but describes the post-order and post-trade communication between execution counterparties.

Trading Cost Confusion and Examples

There is plenty of confusion relating to trading costs regarding NDD brokers. Many sources mistakenly state market makers usually offer lower trading costs than NDDs. The same applies to market makers versus ECN brokers. In most cases, market makers always remain the most expensive brokers. In theory, they can remain competitive, and the term has commission-free become a popular term among beginner traders, especially millennial and GenZ traders. Most commission-free pricing environments rank among the most expensive ones overall once spreads are factored in.

Below are examples of a competitive market maker offer and an average one, compared with the same for an NDD broker offer.

Minimum Spread at a competitive market maker

Commission per Round Lot

Cost per 1 Standard Lot

0.4 pips - 0.6 pips

$0.00

$4.00 to $6.00

Minimum Spread at an average market maker

Commission per Round Lot

Cost per 1 Standard Lot

1.0 - 1.5 pips

$0.00

$10.00 - $15.00

Minimum Spread at a competitive NDD

Commission per Round Lot

Cost per 1 Standard Lot

0.0 pips

$2.00 - $6.00

$2.00 - $6.00

Minimum Spread at an average NDD

Commission per Round Lot

Cost per 1 Standard Lot

0.0 pips

$7.00 - $8.00

$7.00 - $8.00

NDD Brokers versus Market Makers

  • Some market maker brokers compete well with no dealing desk forex brokers, but most do not. Those offering a minimum spread of 0.6 pips limit it to the EUR/USD and the USD/JPY, while a 0.4 pip offer generally applies to the EUR/USD in a marketing effort to attract traders, while other mark-ups clock in above 1 pip. Therefore, traders must evaluate the costs on all currency pairs they wish to trade, as market makers deploy clever marketing strategies.
  • Most retail traders at market makers will trade with spreads above 1 pip or $10.00 per 1 standard lot. NDD brokers offer tight spreads on all liquid currency pairs and not just the EUR/USD and USD/JPY, granting more trading opportunities at competitive costs.
  • The pricing advantage increases for traders keeping overnight positions, as most NDD brokers maintain relatively favorable swap rates, generally free of internal mark-ups. They can include positive swap rates, where traders get paid to hold trades overnight. Most market makers charge an internal financing fee plus interbank swap rates.
  • A further advantage of commission-free NDD pricing models versus commission-based market makers is rebate programs for high-frequency and high-volume traders such as scalpers. In some cases, this can lower costs to below $1.00 per 1 standard lot. Some market makers offer cashback programs but often increase the spread further to compensate for it.

Conclusion

In most cases, even low-frequency and low-volume traders get cheaper trading costs at NDD brokers. The cost advantages apply to more currency pairs, while market makers typically use advertising campaigns offering similar fees on one or two currency pairs.

Retail traders can save an average of $9.00 per 1.0 standard lot at NDD brokers versus market makers, or even more if they keep overnight positions and execute higher volumes. This saving adds up over time and can result in thousands worth of cost savings, increasing the profitability of each trading strategy. Scalpers and other short-term traders with high volumes experience the greatest benefit.

What to Look for in a Broker Offering Forex No Dealing Desk Execution?

There is a growing number of non-dealing desk Forex brokers catering to retail traders, but which ones rank among the best?

Not every broker on a non-dealing desk Forex brokers list presents traders with the same advantages, but should offer all the following four features:

1. Competitive, business-friendly regulation with trader protection: The first thing traders should look for is regulation, but the opinions on which regulator suits NDD brokers differ. All tier-1 regulators restrict leverage for retail traders to between 1:20 and 1:50, while more business-friendly tier-2 and tier-3 regulators maintain the old standard of 1:500.

While regulation is important for safety of deposit, high-frequency traders, scalpers, and other short-term traders may opt for higher leverage if brokers provide additional independent protection. Traders opting for tier-2 and tier-3 regulated NDD brokers should ensure a third-party insurance policy protecting deposits exists. Another alternative is membership of the Hong Kong-based financial commission, which has emerged as a primary source of independent audits. It also offers a €20,000 recovery fund per case, granting similar protection to investor compensation funds at tier-1 regulators like the Cyprus Security and Exchange Commission (CySEC).

Traders should be very wary of depositing funds with unregulated brokers. Brokers operating out of St. Vincent and the Grenadines, a popular destination for offshore brokers, remain unregulated. The Financial Services Authority (FSC) does not regulate them, as stated on their website. In that case, traders should opt for brokers who have a parent company regulated elsewhere. Alternatively, they must ensure the protection listed above exists with a verifiable track record.

2. Raw spreads and low commissions: Forex no dealing desk execution offers the most notable benefit if traders get the bid and ask prices from the interbank market without internal mark-ups. All major currency pairs should have minimum spreads ranging between 0 and 0.1 pips with a commission between $3.00 and $6.00 per round lot. A volume-based cash rebate program is a nice addition.

3. Deep liquidity, fast order execution, and high leverage: The best NDD forex brokers work with dozens of liquidity providers to ensure orders get filled at the best prices available on the interbank market. This also lowers spikes in spreads during high-volatility events. Order execution is also vital to traders, and low-latency fast order execution must exist for traders to receive the full benefit an NDD environment offers.

Non-dealing desk Forex brokers usually house their servers in data centers where all essential market participants operate. Equinix remains the market leader and owns and operates a network of 220+ International Business Exchange data centers located in 63 cities globally. London, Hong Kong, and New York are where NDD brokers want to locate their servers, and traders should ask about the location of servers if a broker fails to specify this on their website. Fast order execution is pivotal in fast-moving markets, and interbank spreads change in split seconds.

A high leverage offering may confirm that an NDD broker maintains an appropriate technology infrastructure and regulatory environment for maximum client benefit. Offering higher leverage carries more risk for brokers and traders alike. Therefore, a broker investing in the hardware, software, and staff to maintain a safe and compliant high leverage trading environment is also more likely to ensure a genuine NDD order execution model.

4. Trading Platforms with a distinct competitive edge: A Forex no dealing desk broker should offer a competitive trading platform. The MT4 trading platform remains number one for retail traders and the leading platform generally for algorithmic trading. While the core version is the most versatile one, it requires upgrades to elevate it to a version suitable for traders who seek non-dealing desk Forex brokers. The best NDD brokers provide upgrades to MT4.

MT5, the successor to MT4, failed to achieve the status of MT4. While it features a marginally improved user interface, both versions maintain a sub-standard one. The most notable mistake is the lack of backward compatibility with MT4, where over 25,000 plugins and EAs exist. Since most seasoned high-frequency traders and scalpers have proprietary trading software running in the MT4 infrastructure, additional services like VPS hosting can provide value. More sophisticated traders should look for API trading, allowing them to connect their advanced trading solutions to the infrastructure of NDD brokers.

Traders should ask the broker which MT4 bridge exists, as MT4 does not communicate with the interbank market by default, given market makers remain dominant users of it. cTrader, the primary competitor to MT4, features connectivity as ECN trading remains at the core of cTrader. The best NDD brokers invest in proprietary solutions which often trump out-of-the-box trading platforms.

How Does a No Dealing Desk (NDD) Broker Operate?

Non-dealing desk Forex brokers act as intermediaries between traders and the interbank market. There is no conflict of interest between broker and traders, as an NDD broker usually relies only on commissions charged for services rendered, without mark-ups on raw spreads. Therefore, it is in the best interest of NDD brokers to have profitable clients, as they will continue to trade and increase their frequency, resulting in increased revenues for the broker.

Brokers offering Forex no dealing desk trading work with multiple liquidity providers, sourcing the best possible bid and ask prices on the interbank market. It is usually done automatically via a liquidity aggregator, and the best NDD Forex broker uses proprietary technology. An NDD broker only matches client orders with the best prices and charges a commission for this service. Some NDD Forex brokers offer a commission-free service but add a mark-up to the interbank market spread. It generally results in notably higher trading costs versus the commission-based cost structure.

Business Model of Market Making Brokers

Market-making brokers offer the opposite business model to non-dealing desk Forex brokers. Rather than granting traders access to interbank market spreads with direct access and exposure, they act as the middleman. Market makers accept the risk and fill many orders internally without ever sending them to the interbank market. Market makers usually manage two orders books, an internal and an external one. They are often known as the A book and the B book.

Market makers, as the name implies, create a market for clients. They match most orders internally against other traders when possible. Otherwise, they act as the direct counterparty to traders, creating a potential conflict of interest. Losses of traders result in profits for market-making brokers. Since the retail loss rate ranges between 70% and 89%, it creates a large source of revenue. Market makers usually provide a commission-free trading environment, as they add mark-ups on interbank market spreads, which in most cases results in a notable more expensive cost structure for traders compared to NDD brokers.

Clarity Over Different Models of NDD Brokers

There is only one NDD model for brokers, but the confusion over various models derives from ECN and STP. ECN is the anonymous communication network, and NDD brokers may use this technology but do not have to. Most NDD brokers communicate directly with liquidity providers and use liquidity aggregators to offer pricing plus proprietary technology to fill orders. ECN brokers are not NDD brokers, and ECN does not guarantee order fills. STP is a post-order post-trade communication between counterparties and does not impact order placement.

What are the Advantages and Disadvantages of NDD Brokers?

NDD advantages include access to raw interbank market spreads and lower trading costs, but exceptions exist. These enhance profitability, especially for short-term high-volume trading strategies. NDD disadvantages are higher trading volume requirements, usually 0.10 standard lots versus 0.01 at market makers, and false claims by brokers marketing NDD trading while offering ECN at best and market-making at worst.

The Confusion Over Types of NDD Brokers Explained

All genuine NDD brokers communicate directly with known liquidity providers, creating only one type of NDD broker. ECN and STP, often mistakenly used in conjunction with NDD, are communication technologies, and NDD brokers may use either one but do not have to. Therefore, NDD is a standalone business model, and NDD-ECN or NDD-STP, often applied or referred to in the wrong context, do not alter the type of NDD broker. Most NDD brokers do not use ECN.

Bottom Line

Non-dealing desk Forex brokers usually present short-term high-volume traders with the best overall trading environment for them. There is a lot of confusion about the types of NDD brokers, while only one genuine type exists. NDD brokers generally offer access to the interbank market raw spreads for a commission. They communicate directly with known liquidity providers via proprietary liquidity aggregators.

While NDD brokers may use STP, they generally do not use ECN. Traders should understand the difference, as many brokers misleadingly claim NDD execution. They refer to ECN at best, and in the worst case, are market makers. STP does not refer to order placement but to post-order and post-trade communication between execution counterparties.

FAQs

What is a non-dealing desk broker?

A non-dealing desk broker provides conflict-free trading and acts as an intermediary between traders and the interbank market. No dealing desk Forex brokers work directly with liquidity providers to source the best available prices for traders and execute orders, usually at raw spreads for a commission.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.