Based on the current market situation, R1FX Trader in automatic mode determines the most advantageous model for the client. The model is selected with consideration of many factors, which gives the client an opportunity to trade comfortably in any mode: both at scalping or trading on long-term positions.
The method of orders overlapping Non-Dealing Desk (NDD) means the drawing of all clients’ transactions to open interbank market. In this case, the retail dealer does not interfere at the time of execution of orders.
The benefits that this model gives the traders are the following: unlimited liquidity and narrow market spreads, and the order execution time provides the requested price. Such quality of execution is achieved by the fact that in the open market the majority of participants trade directly with each other and all purchase orders receive a similar counter sale order.
The NDD model does not increase the spread at the expense of the interests of intermediate links, as the broker does not take any part in opening and closing orders. Brokerage fee in this case is a percentage of the transaction volume, which is by several times lower than the spreads in other companies.
STRAIGHT THROUGH PROCESSING
The evolutionary result of NDD is the technology of straight processing of transactions, or STP. It is more progressive due to the use of advanced methods of data flow processing.
Transactions execution rate increases through automation of orders transfer to the interbank market. The transactor directly receives client orders and processes them.
This technology is a great way to escape the calculation risks, as the accuracy and speed of execution exclude price changes during processing. Quotations are supplied from market-makers in the “bridge” mode. Due to this, the orders submitted by the client can obtain the necessary liquidity and be executed with great accuracy at any moment.
STP technology is the most optimal solution for scalping. This method is important for strategies with frequent and small profits, as it allows entering the market literally in a second, with the highest possible accuracy of price.
STP–DIRECT MARKET ACCESS
The technology of order execution, which turns traders into price-makers and opens the interbank market for private traders, is called STP–DMA. Using this technique at the time of processing the order, the client may not accept the quote offered by the broker. Client orders come directly to the liquidity providers at the price set by the traders themselves. Execution is performed by virtue of a large flow of counter orders.
At STP–DMA unlimited liquidity of open market executes the order of any volume, at the price, which is profitable for the trader. By virtue of automation of all processes, the execution is performed in a fraction of a second, while requotes are excluded due to a large number of orders. It follows that position is closed and opened strictly by a click, in relation to price and speed.
The cost of orders execution and processing on STP–DMA is minimum, as liquidity providers are able to reduce spreads almost to zero due to considerable trading volumes. There is no broker spread, as the broker remains aloof and does not participate in the processing of orders. The broker charges small fixed fees for the use of the “bridge” to transfer orders to liquidity providers.