If you think market makers are different than dealing desks or ECN or the so called "interbank" you are making this way too confusing. These are ALL dealing desks, the only difference is the interbank and ECN models have their dealing desks another step removed from the trader. And if by "trading against you" means sell when you buy or buy when you sell, realize this is also called liquidity. These are all marketing terms used by brokers to confuse traders, plain and simple, I learned this years back when I looked into FXCM's "non dealing desk" promotions. Someplace , somewhere, a dealing desk has to take the opposite side of your trade in order for you to speculate in fx period. That is fact.
Hi Becky,
You're right when you say that someplace, somewhere a dealing desk has to take the opposite side of your trade in order for you to speculate in FX, but that doesn't mean all execution models are the same. It's important to recognize the difference between Dealing Desk and No Dealing Desk (NDD) forex execution.
In our NDD model, FXCM does not take a market position, eliminating a major trading conflict of interest. Your orders automatically fill from the NDD price feed, which is the best available bid and best ask prices from all of our liquidity providers plus FXCM's mark-up. While it's true that these liquidity providers have their own dealing desks manager their risk, the key point is that your orders are anonymous to them. They cannot see your stops, limits, or entry orders. They only see market orders coming from FXCM, and they have to compete with each other, because only the liquidity provider quoting the best price for you at a given time will get the opportunity to fill your orders.
That is a big difference from trading with Dealing Desk brokers who may actively trade against your positions. They can profit when you lose. Alternatively, they may lose when you profit. Because of this, Dealing Desk brokers are incentivized to manipulate your orders. They may for example place restrictions on stops and limits or re-quote your orders. FXCM's NDD execution model does none of this.
While FXCM believes that NDD execution provides the best all-around trading experience, we also offer dealing desk execution as an option for traders whose primary concern is low spreads. The Dealing Desk offering, however, has certain trading limitations. If you are trading on our Dealing Desk execution and your trading style exposes us to more risk than we're comfortable with, FXCM may, at our sole discretion and at any time, change your execution type to NDD. This is how FXCM can comfortably offer both options without having to resort to some of the common "dealer intervention" practices mentioned above which take place at many forex brokers.
Jason