Hi RC,
Actually, the trading limitations have more to do with certain types of strategies that could make it harder for our
dealing desk to manage risk. For example, strategies that trade at a high frequency or scalp the market are least suitable for
Dealing Desk execution. We encourage traders who use those types of strategies to open an account that provides them with
No Dealing Desk execution, which is compatible with all trading strategies. On the other hand, a position trader, who is consistently profitable but trades at a lower frequency, does not present the same challenges to our
dealing desk in managing risk.
Operating a
dealing desk can be riskier than providing
No Dealing Desk execution because we (the market maker) are on the other side of your trades. When you are long a currency pair, we are short. When you are short, we are long. Likewise, when you trade profitably, we may experience trading losses. Most dealing desks manage their trading losses by interfering with their client's trading such as re-quoting their orders, delaying their execution, skewing prices, or widening spreads. We do none of that at FXCM. If your trading style exposes us to more risk than we care to manage, we will simply change your execution type to
No Dealing Desk, where there are no restrictions on the trading style or strategy used. This is how FXCM can comfortably offer
both options without having to resort to the "dealer intervention" that is common at many forex brokers.
Jason
