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.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- FP Markets, ECN trading with leverage up to 1:500.
- Eightcap, Competitive pricing + excellent daily videos.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
- Pepperstone, Great ECN execution on MT4 platform.
Best NDD Brokers Comparison
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Regulators | CMA, CySEC, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FSCA | ASIC, CySEC, FCA, SCB | FMA, FSA | ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB |
Year Established | 2011 | 2005 | 2009 | 2014 | 2010 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP | ECN/STP, Market Maker | ECN/STP, No Dealing Desk | No Dealing Desk, NDD |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.1 pips | 1.2 pips | 1.0 pips | 1.3 pips | 1.1 pips |
Average Trading Cost GBP/USD | 0.2 pips | 1.4 pips | 1.2 pips | 2.0 pips | 1.6 pips |
Average Trading Cost Gold | $0.18 | $0.16 | $0.12 | $0.90 | $0.20 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, cTrader, Trading View | MetaTrader 4, MetaTrader 5, cTrader, Trading View |
Islamic Account | |||||
Negative Balance Protection | N/A | N/A | |||
| Visit Website | Visit Website | Visit Website | Visit Website | Visit Website |
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.
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFXTM ranks among the best no-dealing desk Forex brokers on my listing due to its ultra-low trading fees. For a $500 minimum deposit, the Advantage account features raw spreads of 0.0 pips for a commission of $0.80 and $4.00 per 1.0 standard round lot. Many brokers ask for $20,000+ deposits for ultra-competitive trading fees.
Traders also benefit from the high-quality price improvement technology, which lowers trading fees by an average of $3.00 per round lot on 97.18% of all trades, increasing the FXTM trading fee advantage. The average order execution time is 0.071 seconds, making it ideal for scalpers.
Pros & Cons
- 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
- A highly regulated broker with a tier-1 license
- No cryptocurrencies and limited choice of commodities
FP Markets
In Summary ECN trading with leverage up to 1:500FP Markets upgrades the algorithmic trading platforms MT4 and MT5 with 12 plugins, Trading Central, and Autochartist, ensuring traders have a competitive edge. Traders also benefit from competitive trading fees in the commission-based account featuring raw spreads from 0.0 pips for a $6.00 commission per 1.0 round lot. FP Markets offers competitive leverage with negative balance protection and deep liquidity pools. Therefore, I rank FP Markets among the best no-dealing desk Forex brokers.
The well-balanced asset selection includes Forex, cryptocurrencies, ETFs, and bonds. FP Markets also maintains an excellent choice of payment processors, including cryptocurrency deposits and withdrawals.
Pros & Cons
- 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
- Availability of Iress geographically restricted
Eightcap
In Summary Competitive pricing + excellent daily videosEightcap maintains a cutting-edge trading infrastructure with superior order execution, high leverage, deep liquidity, and competitive fees. Eightcap does not staff a dealing desk, where human operators interfere with client orders, but has an electronic system, as Eightcap is a market maker. It attempts to fill as many orders as possible within its order book, which is standard industry practice. It can also result in faster order processing at better prices, but Eightcap additionally accesses deep liquidity pools for external order execution.
Despite the necessary software that matches and routes client orders, Eightcap ranks among the most trusted NDD Forex brokers.
Pros & Cons
- 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
- Limited leverage in some areas
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingI consider BlackBull Markets among the best no-dealing desk Forex brokers due to its superb ECN trading environment. The competitively priced, commission-based ECN accounts feature trading fees as low as $4.00 per lot. Traders also benefit from competitive leverage with negative balance protection and an industry-leading asset selection of 26,000+ trading instruments, including 200+ Forex pairs.
BlackBull Markets has Equinix servers located in New York (NY4), London (LD5), and Tokyo (TY3) for institutional-grade trading conditions. VPS hosting ensures 24/5 low-latency Forex trading, and APIs allow traders to connect advanced algorithmic trading solutions to the cutting-edge BlackBull trading infrastructure.
Pros & Cons
- 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
- Limited deposit options
Pepperstone
In Summary Great ECN execution on MT4 platformPepperstone, one of the largest MT4 brokers, upgrades MT4/MT5 with the 28-plugin Smart Trader Tools package and Autochartist. MT4 traders also get Capitalise AI, which supports algorithmic trading in a code-free environment. The commission-based account includes raw spreads from 0.0 pips for a commission of $7.00 per 1.0 standard round lot, and high-volume traders can lower final trading fees via a multi-tier volume-based rebate program. It makes Pepperstone one of the best no-dealing desk Forex brokers on my listing.
The well-balanced asset selection of 1,500+ trading instruments includes Forex, Forex indices, cryptocurrencies, and ETFs. Pepperstone also has same-day withdrawals.
Pros & Cons
- Excellent choice of trading platforms consisting of MT4/MT5, and cTrader
- Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
- Social trading support via Myfxbook, MetaTrader Signals, and DupliTrade
- Leverage of up to 1:30 and superb trade execution
- Demo accounts have 30-day time limits
What is a True NDD Broker?
An NDD broker works with numerous counterparties in the interbank market and matches buy and sell orders for a commission for unfiltered access. NDD brokers can use straight-through processing (STP), the electronic communication network (ECN), or a combination of both.
There is a lot of talk and confusion about NDD brokers and whether they guarantee intervention-free trading. Every broker must hedge their exposure, but that does not necessarily mean they trade against their clients. NDD brokers rely on algorithms rather than human intervention to remain within their risk profile, making a 100% NDD broker model unlikely. An NDD broker does not make the market, unlike market-maker brokers.
Traders can gauge the degree of intervention or market manipulation by the order execution performed by a broker, especially at buy limit and sell limit orders. A broker who fills orders at the specified price or better does not interfere with orders, while frequent requotes, high slippage, or unfavorable price execution generally hints at dealing desk intervention, human or algorithmic. NDD brokers usually maintain a competitive commission-based cost structure. Brokers offering commission-free trading are probably really market makers.
The Pros & Cons of Trading with NDD Brokers
Traders should know the pros and cons of trading with NDD brokers to avoid confusion and understand how to distinguish an NDD execution model from market makers.
Pros:
- Lower trading fees, usually in a commission-based pricing environment
- Rebates for high-volume traders
- Superb order execution, including low-latency processing and price improvement technology.
- Deep liquidity due to numerous liquidity providers in the interbank market
- NDD brokers do not trade against clients.
- No manipulation or interference with raw market spreads.
Cons:
- NDD brokers may reject orders if counterparties cannot fill them or must become the counterparty.
- Widespread confusion over NDD (order execution), STP (post-order and post-trade communication between execution counterparties), and ECN (the anonymous electronic communication network to the interbank market) type brokers.
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.
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