The forex market is one of the most fast-paced and dynamic financial markets in the world. With a market cap of more than $5.6 trillion dollars, the foreign exchange market is certainly laden with so many opportunities for investors and traders alike to generate and create sustainable wealth. To successfully trade the forex market, you need robust knowledge of how the market works and the ability to use trading tools and indicators to analyze price and market directions.
Also, when opening a retail trading account, one important consideration is to understand the different types of forex brokers on the market. Your choice of forex broker can make or mar the quality of service you will receive, as well as the fee you would pay for trading your favorite currency pairs.
In this post, we will walk you through the three (3) different forex brokers available to handle your foreign exchange transactions. We will also talk about forex brokers accepting BTC and why it’s a great idea to choose a broker that accepts BTC.
Let’s dive in!
Types Of Forex Brokers
There are three different types of forex brokers – No Dealing Desk, Market Maker, and Electronic Communications Network. Let’s briefly explain the characteristics of each of these brokers.
- No Dealing Desk (NDD) Forex Brokers
As the name implies, the NDD broker lacks a dealing desk. Instead of a dealing desk, this broker offers the best composite quotes that are obtained from reputable providers. These providers give NDD brokers the liquidity to work with, while the broker then executes and fills orders for their investors and traders. Generally, NDD brokers charge a commission from their customers to stay afloat.
- Market Makers
Market Makers are those forex brokers that offer traders and investors a 2-sided market from their in-house dealing desk. The objective of the market maker is to capture a particular portion of the spread in order not to lay off accumulated risk. The market maker may offset a trade immediately if the executed trade is large enough and if the broker feels the market will move in the opposite direction.
- Electronic Communications Network (ECN) Brokers
The last type of forex brokers is the ECN. These brokers do not have their own dealing desk. Instead of a dealing desk, operators of these brokers provide an electronic platform for retail investors and traders to enter bids through their systems. One of the benefits of working with an ECN is that they allow traders to remain anonymous while posting prices.
Forex Brokers Accepting Bitcoin
Many forex brokers now support the use of Bitcoin to enable their customers to fund their trading accounts. The advantage of using Bitcoin as a payment method cannot be overemphasized. Traders will enjoy fast and cheap transactions compared to using credit/debit cards or even bank transfers. What’s more? Bitcoin is the most popular and biggest cryptocurrency by market cap in the world today.
Benefits of Choosing a Broker that Accepts Bitcoin
Wondering why you should pick a broker that accepts BTC? The following reasons should convince you:
- Transactions involving Bitcoin undergo different confirmation processes before approval. The confirmation process takes just a few seconds.
- Bitcoin’s security is second to none compared to other peer-to-peer cryptocurrencies.
- Most regulated and reliable brokers support BTC as a form of payments. They also have BTC as an asset (BTC/USD) for investors to purchase.
- The process of creating a Bitcoin wallet to store your coins is simple and straightforward.
- Withdrawals and deposits are fast and instantly.
Final Thoughts
Okay, that’s it. Knowing the different types of forex brokers is an important step in the forex trading journey. Your choice of a broker can be the game-changer that you need to achieve your financial projections. While considering a broker, ensure you choose forex brokers accepting BTC because of the ease of deposit and withdrawals.
