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/// Common Forex Terms: Dealing Desk

30 Aug / 2013
Author: champ Comments: 0

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The dealing desk in the forex market is usually the broker through whom you place the forex trading orders. There are basically two models in forex trading, namely dealing desk and no dealing desk. Even though many market participants believe that no dealing desk model is superior, the dealing desk model has its own advantages. The dealing desk is a counter party for its customers, hedging their aggregate positions through the adoption of predetermined risk parameters. The major advantages of dealing desk are

  • The dealing desk ensures that the spreads stay fixed typically within a small range during normal forex market conditions
  • Since you deal directly with the counter party, you are able to contact the dealing desk if you encounter any problems during forex trading
  • The platforms of the dealing desk are generally quite user friendly
  • Dealing desk is ideal for small accounts, since it is easy to discuss strategies with the counter party and place stops and limits for variations over 10 pips to minimize losses

However, the major disadvantages of dealing desk are that you would not be able to place stop or limit orders very close to the market price and you must accept the bid and ask price that dealing desk offers. It is up to you to decide whether you would prefer a dealing desk or trade directly with the no dealing desk model.

 




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