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Instant(DD) vs Market(NDD)
| Instant Execution | Market Execution |
|---|---|
| Dealing Desk (DD) | No Dealing Desk (NDD) |
| Instant Execution is a feature of a Dealing Desk broker | Market Execution is offered by No Dealling Desk brokers |
| Price quotes come from Broker | Price quotes originate in the Market |
| Forex Broker acts as a Marker Marker and "makes market" by creating own prices | Forex Broker receives prices from Liquidity Providers |
| Order filled at the exact price requested | Order filled at the current market price |
| If an order cannot be filled at the exact requested price, it's cancelled | If order cannot be filled at requested price, it gets filled at the next available price |
| Price cannot improve | Price can improve |
| Order either filled or killed (FoK order type) | Price can improve in trader's favor, as well as become less attractive |
| Spreads are usually higher | Spreads are tight |
| Dealing desk brokers are known to charge higher spreads | Spreads with a No dealing desk broker starts as low as 0 pips |
| Fixed spread | Floating spread |
| Instant execution comes with fixed spreads | Market execution always comes with floating spreads |
| No commission | Possible commission |
| Dealing desk brokers don't charge commission | With DMA & ECN brokers - commission applies. STP brokers might not charge commission |
| Requotes | No requotes |
| Requotes are common, more so during volatile/fast moving markets | Requotes are eliminated, since orders can always be filled at next available price |
| No slippage | Slippage |
| Slippage not possible. Some brokers might allow setting "price deviation" to accept minor shifts in price | Slippage is normal part of trading with Market Execution. Slippage occurs every time price shifts from originally requested. Slippage can be in trader's favor, as well as against |
| Stops & Profit levels can be set in advance | Stops & Profit levels cannot be set in advance |
| Instant execution allows setting Stop Loss and Take Profit orders prior to placing a trade | Stop loss and Take profit orders cannot be set prior to order placement, only after a trade is open |
| Execution is not guaranteed | Execution is guaranteed |
| Execution depends on brokers' ability to accept & counter-trade position | Execution depends on liquidity providers, where liquidity is often plenty |
| Option to refuse new price quote | Automatic fill on all orders |
| If price is re-quoted, traders can refuse the new price | Orders filled automatically at current available market price |
| Slower execution speed | Fast execution speed |
| Order execution takes few seconds | Order execution done in fractions of seconds |
| Restrictions on trading styles | Unrestricted trading |
| Possible restrictions on trading styles: scalping, certain EAs, news trading etc | No limits on trading styles, as a rule (double-check with your broker) |
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