What is a Market Maker (Dealing Desk) Broker?

What is a Market Maker (Dealing Desk) Broker?

A market maker dealing desk broker internalizes client orders and sets quotes from its own book. Instead of routing trades directly to the interbank market, the broker becomes the counterparty.

How Dealing Desks Operate

• Quote driven: The broker streams bid/ask prices and may widen spreads during volatility.
• Risk management: Exposure is hedged selectively using larger liquidity providers.
• Execution controls: Requotes and order delays can occur if price shifts before fill.

Evaluating a Market Maker

• Review regulatory registrations and capital requirements protecting client funds.
• Analyze execution statistics—slippage, rejection rate, and order speed—published in disclosures.
• Ask whether the broker offers guaranteed stop loss or negative balance protection.
• Maintain detailed trade logs to spot systematic pricing anomalies.

Pros and Cons

• Pros: Simple onboarding, fixed or stable spreads in calm markets, ancillary features like guaranteed stops.
• Cons: Potential conflicts of interest, requotes in volatility, and discretionary execution controls.

When It Can Work

Low‑frequency swing traders may find dealing desks acceptable if costs are transparent and execution metrics are solid. High‑frequency or news traders typically prefer ECN/STP venues with firm liquidity.

Cost Transparency

Request all‑in cost examples (spread + any fees) across sessions and during news. Compare with agency venues to ensure you aren’t overpaying for convenience features.

Advanced Guidance

Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.

Execution Framework

• Plan entries at levels with confluence (structure, momentum, time‑of‑day).
• Place stops beyond the logical invalidation, not arbitrary distances.
• Target at least 2–3R; scale out methodically and trail remainder.
• Avoid thin liquidity windows unless the setup explicitly requires it.
• Record slippage and spreads; poor fills can erase edge.

Review Loop

• Journal setups by session and pair to learn where they excel.
• Tag trades by catalyst (news, trend continuation, range breakout).
• Recalculate expectancy monthly; prune underperforming variants.

Risk Controls

Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.