Types of XAUUSD Brokers
Electronic Communication Network Broker, STP - Straight Through Processing Broker, NDD
Different Types of Gold Brokers List - below is an explanation of the Different Types of Gold Brokers.
ECN - Electronic Communication Network Broker - Types of XAUUSD Brokers
ECN Broker stands for Electronic Communication Network, these ECN gold brokers are connected to the inter bank network directly through an electronic communication network & the gold orders from the ECN Gold Broker are placed straight to the electronic network. The ECN Broker will display different gold quotes from different liquidity providers. The quotes placed by these ECNs network of liquidity providers are direct from the interbank network and gold orders are executed directly in the interbank gold market - once a trader trading with an ECN broker places a gold order with their xauusd trading broker.
These ECN brokers will charge commissions + spread for every gold trade transaction order. For these ECN Broker execution technique every gold trade is matched to another in real time over the interbank network - ECN Network.
STP - Straight Through Processing Broker - Types of XAUUSD Brokers
STP Broker stands for STP, the STP gold brokers will send client trading orders direct to their Gold Liquidity Provider, the Gold Liquidity Provider is a large bank with deep liquidity to trade on the interbank net-work.
An STP Broker can either have one gold liquidity provider or many liquidity providers.
The best thing about STP XAUUSD Brokers is that xauusd traders can place their xauusd trades immediately on the online xauusd market with instant execution because they have access to the interbank market through their STP xauusd trading broker.
STP XAUUSD Brokers will not charge commissions, but will charge spreads on xauusd trades. Because gold traders have access to inter bank market execution, there is no re-quotes on the gold orders neither is there any gold order waiting for execution, the order execution is instant.
NDD - Non Dealing Desk Broker - Types of XAUUSD Brokers
NDD stand for Non-Dealing Desk gold execution of orders, these NDD gold brokers do not implement a dealing-desk & this makes this type of order execution to have less trading restrictions as opposed to the Dealing Desk Gold Trade Execution.
NDD Execution means that xauusd trades from the traders account will be executed direct to the online interbank exchange gold trading market. The gold orders will be matched with other trading gold orders in the interbank exchange market using the broker Non Dealing Desk order execution model.
DD - Dealing Desk Broker - Types of XAUUSD Brokers
DD stands for dealing desk, these DD gold brokers have a dealing-desk where they can match gold orders & execute gold orders in online interbank exchange market.
The gold trader trading with a DD broker will get a lot of re-quotes.
Dealing Desks will issue gold traders with a lot of order requotes, meaning xauusd prices of gold orders are not real time and the broker can requote a gold trader's order if the xauusd price of the xauusd market changes quick enough before the broker's dealing desk places the order online or before they match the gold order in the online interbank xauusd trading market.
Dealing Desk gold brokers therefore means that order execution of gold orders is not instant and therefore this gold execution model may mean that gold orders executed using a DD Broker are not executed as quickly as when compared to an ECN broker or an STP trading broker.
Market Maker Broker - Types of XAUUSD Brokers
Market Maker are gold brokers that have a dealing desk where they can match gold orders in-house without going to the online inter-bank exchange market.
Gold orders can also be executed against their gold traders - meaning the broker can take the opposite side of a traders open xauusd trades. This gold broker can make the decision to either execute a gold order that is the opposite direction of a trader's order thus if the trader makes a loss the broker makes a profit, & if gold trader makes a profit the broker makes a loss.
