What is a dealing desk broker?
In one line: A dealing desk broker is a broker that acts as a market maker, quoting its own prices and taking the other side of its clients' trades.
The short answer
When you buy from a dealing desk broker, the broker itself sells to you. It's the Market maker for its own clients.
That's why they're also called market-maker brokers. Most of their income comes from the Spread.
The other model is an ECN broker, which passes your order out to a network.
How it works
- The broker gets prices from banks and other sources.
- It sets its own buy and sell prices for you, usually a little wider.
- When you trade, it fills you from its own book.
- It may keep your trade, or offset it with another client or a bank.
A simple example
The wider market for EUR/USD is 1.08500 / 1.08505. The broker quotes you 1.08495 / 1.08510.
- Its spread: 1.08510 − 1.08495 = 0.00015 = 1.5 pips
- On 1 standard lot, 1.5 pips is about $15 in cost.
No commission is charged. The cost is in the spread. Numbers made up to show the math.
The conflict of interest
If a broker keeps your trade on its own books, your loss can be its gain. That's a real conflict.
It doesn't mean the broker cheats. Rules require fair prices, and many dealers offset their risk. But it's worth knowing who is on the other side.
In the US, retail forex dealers must register with the CFTC and be members of the NFA. You can check any firm on the NFA's BASIC search. US rules also cap retail forex leverage at 50:1 on major pairs and 20:1 on others.
Pros and cons
- Pros: no commission, small trade sizes, simple pricing, often fixed or steady spreads.
- Cons: wider spreads, a possible conflict of interest, and sometimes a Requote in fast markets.
A common mistake
Blaming every bad trade on the broker. A loss after a stop is hit is usually the market, not a trick. Check your broker's price against a chart from a different source before deciding something is wrong.
The real mistake is not checking the broker at all. Look up the registration, read the execution policy, and compare total costs using the pip value calculator.
Questions
Is a dealing desk broker bad?
Not by itself. Many are regulated and fair. Know the model, check the registration and compare costs.
How can I tell if my broker is a dealing desk?
Read its client agreement or order execution policy. It should say whether it acts as principal, meaning the other side of your trade.
Want the next step? We'll walk you through it.
Four free lessons by email, one every few days — each with a 10-minute exercise on a real chart.
Send Me the Free Lessons 4 short emails · No spam · Unsubscribe anytimeOr see the whole method, step by step:
See What’s Inside the Course Try everything free first. Decide when you're ready. · Open the free chart tool (works in the TradingView phone app)One chart idea a day, in plain English. Follow along: