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What is the NDD method in overseas forex trading? An explanation of the differences from the DD method and recommended brokers for beginners
NDD method isTransactions that directly route investor orders to the marketBecause transactions can be conducted without going through an intermediary, it is characterized by high transaction transparency and fast execution speed
On the other hand, the DD method is,Transactions through intermediariesYes, it does. While using a broker will slow down the execution speed, it offers advantages such as narrower spreads
Therefore, this article explains the differences between NDD and DD methods and introduces five recommended overseas forex brokers for beginners
Understanding the characteristics of NDD and DD trading methods will allow you to trade in a way that suits your objectives and increase your chances of making a profit, so please read to the end
The difference between NDD and DD methods in overseas forex trading! We'll also explain the advantages and disadvantages
Overseas forex brokers use the NDD (Non-Dealing Desk) and DD (Dealing Desk) systems, which have different characteristics such as spread width and execution time
Now, let's discuss the advantages and disadvantages of the NDD and DD methods, taking into account their respective characteristics
In essence, the NDD (Non-Dealing Desk) method is a system where transactions are conducted directly with the market without going through a dealer
NDD stands for No Dealing DeskTransactions that directly connect investors' orders to the interbank market (electronic exchanges)Interbank refers to a place where orders from investors and financial institutions are gathered
In the NDD (Non-Dealing Desk) method, the process from order placement to execution is handled systematicallyIts distinguishing feature is that it allows trading directly with the market without going through an FX brokerThat's right. Also, most overseas forex brokers use the NDD (No Dealing Desk) system
The NDD method can be further divided into two types: the STP method and the ECN method
The NDD method is divided into the STP method and the ECN method
| STP method: Orders received from investors are systematically matched with rates favorable to the investors for trading. ECN method: Orders received from investors are directly connected to the market for trading |
The STP method selects the rates from multiple financial institutions, such as banks, based on orders received from investorsAutomatically selects the most favorable price for investorsI will
However, since transactions are conducted at a price that includes a commission, the spread tends to be wider than with the ECN method .
On the other hand, the ECN method connects investors' orders directly to the market,A system that automatically matches orders with those of other investorsis
In the ECN method, no spread is added to the rate,A trading fee is incurred with each transactionI will
The advantages include "high transparency" and "minimal time lag in order execution."
The advantages of trading using the NDD (Non-Dealing Desk) method include high transparency and minimal time lag in order execution
The NDD (Non-Dealing Desk) method allows you to trade directly with the market without going through a broker, so you are not subject to trading manipulation by brokers
In other words,Because transactions can be conducted at rates offered by financial institutions, etc., it is a highly transparent and fair transactionIt is possible
Furthermore, because transactions are completed without an intermediary, the speed of completion is fast, and there is a small time lag between placing an order and the execution of the trade. A small time lag means that the time it takes to complete a transaction is shortThe NDD (No Dealing Desk) method increases the likelihood of being able to trade at your desired price
| The disadvantage is that the spread will inevitably widen One disadvantage of the NDD (Non-Dealing Desk) method is that the spread is wider compared to the DD (Dealing Desk) method The NDD method primarily generates revenue from the spread,The wider the spread, the more profitable the brokerIn other words, brokers try to increase their profits by widening the spread Therefore, compared to DD methods and other methods with different revenue sources, The spread width is generally wider in NDD (Non-Dealing Desk) tradingis |
The difference from the DD method is whether or not an intermediary is involved
DD stands for Dealing Desk,A trading method that involves trading through an FX brokerThat's right. Investors do not trade directly with the market,A key feature is that you trade with FX brokersis
In other words, investors don't place orders on the market; instead, they place orders with brokers at their desired rates and have them executed
While the NDD (No Dealing Desk) system is prevalent in overseas forex trading, most domestic forex brokers use the DD (Dealing Desk) system
The advantage is that the spread is narrow
One advantage of the DD (Dealing Desk) method compared to the NDD (Non-Dealing Desk) method is that it offers narrower spreads
The DD (Dealing Desk) method does not rely on spreads as its source of revenue, and therefore has the following conflict of interest:
| Investor profits = FX broker's losses Investor losses = FX broker's profits |
The DD method isSince there is no need to profit from the spread, the spread can be narrowed
Domestic FX brokers are meeting the demand from investors for narrow spreads by adopting a DD (Dealing Desk) system that offers narrow spreads
The disadvantages include "the possibility of fraud" and "delays in order execution."
The disadvantages of the DD (Dealing Desk) method include the possibility of fraud and slow order execution
The DD method involves a broker intervening in the transaction,There is a possibility of fraudulent activity, such as failing to properly execute investor ordersThere is
The fact that the interests of investors and brokers are diametrically opposed is one reason why trading may be suspected of being manipulated
Furthermore, the DD method involves transactions through a broker,Execution tends to be slower than with the NDD methodThere is
In other words, a long time between placing an order and its execution means that the order may not be executed at your desired rate
Many investors likely prefer the NDD (No Dealing Desk) method because they dislike the lack of transparency and delays in execution of such transactions
Summary of the differences between NDD and DD methods
The differences between NDD and DD methods are summarized in the following table
| NDD method | DD method | |
| Transaction methods | Without going through a third party | Through a contractor |
| transparency | expensive | low |
| Contract | early | slow |
| spread | wide | narrow |
| Revenue sources | Other than the spread | spread |
It should be noted that most overseas forex brokers use the NDD (No Dealing Desk) system, while domestic forex brokers mainly use the DD (Dealing Desk) system
If you want to trade as safely as possible, choose the NDD (No Dealing Desk) method
The NDD (Non-Dealing Desk) method is recommended for those who want to trade as securely as possible
The NDD method does not involve the vendorBecause it allows direct trading with the market, it offers high transparency and equal trading opportunities for investorscan
However, the NDD method tends to have wider spreads, which may increase costs
but,If you want to trade as safely as possible, choose the NDD (No Dealing Desk) method due to its high transparency and speed of execution
Recommended for beginners! 5 overseas forex brokers using the NDD (No Dealing Desk) method
The following five NDD-style overseas forex brokers are recommended for beginners in overseas forex trading:
- XMTrading
- FXGT
- iForex
- AXIORY
- TitanFX
Let's introduce the features in order
1. XMTrading
| Transaction method | Maximum leverage | Zero Cut | spread |
| NDD | 1,000 times | can be | Average 1.6 pips |
*Spread...Standard account (USD/JPY)
XM employs an NDD (Non-Dealing Desk) systemA key feature is its low likelihood of requotes or order rejections, thanks to its average execution rate of 99.8%is
Many Japanese people use XM because of its high level of transaction transparency and the fact that Japanese operators provide support 24 hours a day, 365 days a year
Furthermore, even if losses exceed your margin due to rapid price fluctuations, the zero-cut policy ensures that you will not be required to make additional payments beyond your initial deposit
moreover,Investors' funds are 100% segregatedTherefore, even if bankruptcy occurs, your funds will be refunded, so you can use the service with peace of mind
2. FXGT
| Transaction method | Maximum leverage | Zero Cut | spread |
| NDD | 1,000 times | can be | Average 0.5pips |
*Spread...ECN account (USD/JPY)
FXGT employs an NDD (No Dealing Desk) system and offers ECN accounts. In addition to ECN accounts, there are four other account types available, allowing you to choose the account that best suits your trading style. Unusually for an NDD broker, it offers generous bonuses, making it easy for beginners to start trading with a small amount of capital .
Furthermore, because there is no margin call due to the zero-cut system, it is possible to make significant profits by utilizing the maximum leverage of 1,000 times while minimizing the risk of debt
Furthermore , investors' funds are segregated and covered by liability insurance, ensuring maximum protection of your capital.
3. iForex
| Transaction method | Maximum leverage | Zero Cut | spread |
| DD | 400 times | can be | average 1 pips |
*Spread... Elite Account (USD/JPY)
iForex is a major overseas forex broker that employs a DD (Dealing Desk) system and has a proven track record of being used in 180 countries worldwide is that you can trade over 80 currency pairs at a low cost.vinegar
Furthermore, you can trade stocks, ETFs, cryptocurrencies, and other assets besides FX, all through the same account
Furthermore, iForex's stop-loss level is set to 0%, so a stop-loss will not be triggered until your margin reaches 0 yen
Even if your position is showing a loss, you can continue to hold it until your margin balance goes negative, allowing you to wait until you make a profit
UltimatelyEven if your margin is negative, there are no additional margin calls, so you can trade with peace of mind
4. AXIORY
| Transaction method | Maximum leverage | Zero Cut | spread |
| NDD | 400 times | can be | Average 1.4 pips |
*Spread...Standard account (USD/JPY)
AXIORY employs the NDD (No Dealing Desk) system and boasts a trade execution rate of 99.99%
In other words, almost all orders will be executed as desired,The likelihood of requotes or order rejections decreases
The Nano account has a spread of around 0.4 pips, which is inexpensive compared to NDD accounts from other brokers, making it a recommended account for those who want to trade while keeping costs down
However, a round-trip trading fee of $6 per lot is incurred, so choose your account based on your purpose
Furthermore, investors' funds are managed separately from AXIORY's own funds, so even in the unlikely event of bankruptcy, investors will not lose all of their money
Furthermore, since zero-cut is also implemented, when combined with leverage,You can aim for large profits with a small amount of capital while minimizing the risk of debt
AXIORY also has a Japanese support desk, so you can quickly ask questions via chat or email if you have any concerns
5. TitanFX
| Transaction method | Maximum leverage | Zero Cut | spread |
| NDD | 500 times | can be | Average 1.33pips |
*Spread...Zero Standard Account (USD/JPY)
TitanFX uses the NDD (No Dealing Desk) model and offers ECN accountsIt boasts a 99.99% execution rate, and is characterized by its ability to execute market orders within one secondis
As it is an ECN account and also discloses its execution speed, it can be said to have a high degree of transparency
Two account types are available, and the Zero Blade account allows you to trade with a lower average spread
Scalping, hedging, and automated trading are also permittedBy choosing the optimal account that suits your purpose, you can trade in your preferred way while increasing capital efficiency
Q&A regarding the NDD method for overseas forex trading
Here are four frequently asked questions regarding the NDD (No Dealing Desk) method in overseas forex trading
- Q. Is scalping possible with NDD-style overseas forex trading?
- Q. Is automated trading possible?
- Q. What is a contract rejection?
- Q. What is a requote?
I will answer them in order
Q. Is scalping possible with NDD-style overseas forex trading?
Scalping is generally permitted with NDD (No Dealing Desk) style overseas forex brokers
For the NDD system, which profits from spreads, an increase in the number of trades in short-term trading is advantageousMany brokers tend to allow scalpingis
Another reason why the NDD (Non-Dealing Desk) method is accepted is that it involves direct transactions with the market, resulting in less burden on the dealers
On the other hand, because the DD (Dealing Desk) method involves trading through a broker, there is a possibility that the broker may not be able to respond to orders in a short time, potentially resulting in losses. Therefore, few brokers would approve of this method
Q. Is automated trading possible?
Many overseas forex brokers using the NDD (No Dealing Desk) system allow automated tradingSome brokers also offer automated trading for scalping
In the NDD (No Dealing Desk) system, a higher volume of trades leads to increased profits for the broker. Therefore, many brokers are creating trading environments that encourage high-volume trading, such as through automated trading systems
Q. What is a contract rejection?
What is a contract rejection?The order has been placed but has not been accepted by the supplier and therefore has not been finalizedThis means that, in essence, a trade is executed when an order is placed and completed
For example, when an order is executed during a period of significant market fluctuation, the execution rate may differ significantly from the order rate
If the order rate and the execution rate differ significantly, it can lead to substantial losses for the broker, which is why the order may be rejected
Also,The ability to correctly execute investors' orders is called "execution power."
Brokers with low execution speeds take a long time from order to execution, making it highly likely that you won't be able to trade at your desired rate
Order rejections are said to be common in domestic FX trading that employs the DD (Dealing Desk) system. However, low execution speed can lead to unfavorable situations for investors, such as "orders not being executed when desired" or "losses increasing because stop-loss orders cannot be cut."
Scalping, in particular, is highly susceptible to the impact of execution speed, so we recommend that those who engage in short-term trading use brokers with strong execution capabilities
Q. What is a requote?
What is a requote?Inability to execute a trade at the desired timeThis refers to..
When a requote occurs, you cannot trade at your desired rate, so you must decide whether to execute the trade at the new rate offered by the broker
Especially during periods of high price fluctuations, order settlements may not be completed in time, leading to a higher likelihood of requotes
However, the NDD (No Dealing Desk) method, which involves trading without an intermediary, deals directly with the market, so the possibility of requotes occurring is extremely low
summary
This page explains the differences between NDD (Non-Dealing Desk) and DD (Dealing Desk) methods in overseas forex trading
Finally, let's review the important points
| - The NDD method offers high "transparency in transactions" because it trades directly with the market. - The NDD method tends to have wider spreads compared to the DD method . - The DD method involves trading through a broker, which means there is a possibility of "fraudulent manipulation" or "delayed execution." - The NDD method has a lower possibility of order rejection or requotes. |
Many overseas forex brokers use the NDD (No Dealing Desk) systemBecause the NDD (Non-Dealing Desk) system profits from the spread, it tends to have wider spreads compared to the DD (Dealing Desk) systemThere is
However, by combining zero cut and high leverage,Even with a small investment, it is possible to earn profits exceeding the spreadis
Furthermore, with the DD (Dealing Desk) method, there is a possibility that order execution may be delayed or that orders may not be executed at all. Therefore,If you prioritize execution speed, execution reliability, and transaction transparency, the NDD (No Dealing Desk) method is recommendedis
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