Let’s face it. Most of the bokers who support MetaTrader4 platform are nothing but pure bucket shops. In fact you are not even dealing in a true market environment, but instead in a sandboxed type of environment called “dealing desk”, where the broker has full control over your position.
When traders are winning money the broker is losing it. So obviously in this type of environment winners are not very welcome. Furthermore, if you win consistently on a long-term basis, your account will be banned or suspended and your profits will go nowhere or into the greedy brokers pocket. Shocking ha? Well it is the bitter truth. But this writing is not an attack on each and every dealing desk broker, though most of the dealing desk brokers do what they do.
Its not easy finding a MetaTrader 4 broker who offers a true non-dealing desk environment. Although lot of them claim this but its all pure crap. If they have fixed spreads, they cannot be a ‘non-dealing desk’ broker. Any broker who has fixed spread by definition, cannot be offering a non-dealing desk platform.
Just be aware that, when there is a dealing desk involved (be it a human or a computer), you are not trading in a true market environment. A dealing desk broker which acts as a market maker may be trading against your positions. they randomly increase the spreads to kill your scalping trading systems. they even send you fake spikes to hit the stop loss limits. They also send you off quote errors when you try to close the position in profit, telling you fake stories about crazy market conditions and banks liquidity.
The big question is, how do you get around this? The solution is simple. Use ECN brokers.
Here are the advantages of Non-dealing desk ECN brokers.
- No inherent conflict of interest. Real non-dealing desk ECN brokers do not trade against their clients. As facilitators of trading they do not take positions that may, time to time conflict with the interest of individual traders
- Market access. Non-dealing desk brokers offer every trader, big and small, equal access to the interbank market. The rates, bid and ask prices on a non-dealing desk platform are not those set by an individual broker but those derived from active trading between participating banks, institutional investors, FCM’s and individual traders. The process itself makes every trader, regardless of size, and independant market maker.
- Healthy trading Environment. Non-dealing desk broker spreads as well as bid/ask prices come directly from the interbank system. they are not filtered or otherwise manipulated or spiked by the broker to gain a trading advantage.
- Transparency. No mind games. What you see is what you get.
However there are a few disadvantages of the non dealing desk too.
- First of all, there is the higher spreads. Spreads are variable, not fixed. Forex is an extremely fluid market. Spreads are in a constant state of flux. During peak trading hours, spreads can drop to zero, while during off peak hours spreads can be considerably higher.
- Secondly, higher cost of trading. Non-dealing desk brokers don’t offer or execute trades based on fixed spreads. they charge a nominal transaction fee which is bit high. Such is not the case with a dealing desk broker.
In conclusion, is there any chance to find MT4 ECN brokers? The good news is YES.
One of my earlier posts ‘Best Forex Brokers‘ has an extensive list of brokers including both dealing-desk and non-dealing desk. Now its really your choice to find the best MT4 forex broker to suit your trading system and style.