{"version":"1.0","provider_name":"For overseas forex cashback services, try Money Charger","provider_url":"https://money-charger.com/en/","author_name":"admin","author_url":"https://money-charger.com/en/author/admin/","title":"What are NDD (ECN/STP) and DD methods in overseas forex trading? Explanation of differences, advantages, and disadvantages - Money Charger (Overseas Forex Cashback Service)","type":"rich","width":600,"height":338,"html":"What are NDD (ECN/STP) and DD methods in overseas forex trading? We explain the differences, advantages, and disadvantages
\n","description":"There are two main types of trading methods offered by overseas forex brokers: NDD (No Dealing Desk) and DD (Dealing Desk). Furthermore, the NDD method is divided into ECN (Electronic Communication Network) and STP (Straight Through Processing), so many people may be wondering which method to use. This article will explain in detail the differences, advantages, and disadvantages of the NDD and DD methods. We will also introduce who is suited to the NDD and DD methods, as well as the characteristics of the ECN and STP methods, so please use this as a reference. Types of Overseas Forex Trading Methods Overseas forex trading methods can be divided as follows: There are two main types: NDD and DD, and the NDD method is further divided into ECN and STP. The characteristics of each will be explained in detail below. What is the NDD Method? What are its characteristics? The NDD method is an abbreviation for \"No Dealing Desk,\" and it is a trading method that connects investors' orders directly to the interbank (electronic exchange). Interbank: A place where orders from investors and financial institutions gather. The NDD method is characterized by trading directly with the market without going through an FX broker, as the system processes everything from order placement to execution. The NDD method is further divided into the ECN method and the STP method. These two trading methods are explained in detail below. If you want to know more about the NDD method, please refer to this. What is the ECN method? What are its characteristics? The ECN method is a system that connects investors' orders directly to the market and automatically matches them with the orders of other investors. Because it connects orders with investors directly to the market, it is characterized by high transparency and fairness, and fast order execution speed. In the ECN method, no spread is added to the rate, but a trading fee is incurred each time a trade is made. It is highly transparent, but be aware that a trading fee is incurred in addition to the spread. What is the STP method? What are its characteristics? The STP method is a system that automatically selects a price that is advantageous to the investor from the rates of multiple financial institutions such as banks, based on the orders received from investors. The STP method is characterized by its fast processing speed and the ability to reflect actual rates in real time. However, because orders received from investors are automatically selected from multiple institutions, transparency is inferior to that of ECN. Also, since transactions are conducted at a price that includes a commission, spreads tend to be wider than with the ECN method. Compared to the ECN method, transparency and narrow spreads are inferior, but processing speed and trading at real rates are advantageous. What is the DD method? What are its characteristics? The DD method is an abbreviation for \"Dealing Desk,\" and it is a method of trading through an FX broker. The characteristic is that investors do not trade directly with the market, but trade with the FX broker. In other words, investors do not place orders with the market, but place orders with the broker at their desired rate and have them executed. Therefore, the transparency of transactions is lower compared to the NDD method, and execution tends to be slower. Differences between NDD and DD methods The differences between the NDD method and the DD method are shown in the following table. DD Method NDD Method (STP Method) NDD Method (ECN Method) Intervention by FX Broker in Trading Yes No No Transparency Low High Very High Execution Speed Slow Fast Fast Spread Narrow Wide Narrow Scalping Easily Regulated No Regulation No Regulation Source of Revenue Customer Losses Spread, Trading Commission Spread, Trading Commission The biggest difference between the DD method and the NDD method is whether or not the FX broker intervenes in trading and the source of revenue. These differences result in differences in transparency, execution speed, and spreads. Many overseas FX brokers use the NDD method, while many domestic FX brokers tend to use the DD method. Advantages of the NDD Method Here, we will explain in detail the following three advantages of the NDD method. If you are thinking of trading with the NDD method, please refer to this. High Transparency of Trading One of the advantages of trading with the NDD method is the high transparency of trading. With the NDD method, you can trade directly with the market without going through a broker, so you will not be subjected to trading manipulation by a broker. In other words, you can trade at the rates offered by financial institutions, etc., so you can trade with high transparency and fairness. One advantage of trading with the NDD (No Dealing Desk) method is the small time lag in order execution. Because there is no intermediary FX broker during the transaction, the speed of order completion is faster. Since a small time lag means a shorter time to complete the transaction, the NDD method increases the likelihood of trading at your desired price. Another advantage of trading with the NDD method is that it is easier to scalp. This is related to the spreads and transaction fees that are the revenue sources for the NDD method. Scalping is a technique that involves making many trades in a short period of time, so the more trades there are, the higher the FX broker's revenue. […]"}