Overseas FX broker XM has DD and NDD methods, but what are these? I will explain the difference between transactions. This article is for those who are thinking of starting XMTrading, or those who have already started. XMTrading uses the NDD method. However, many people may not know what DD and NDD are in the first place, so I wrote an article about the difference.
- XMtrading
- What is XM’s No Dealing Desk (NDD) system? Basic Concept
- Why XM’s NDD Method is Considered a Lie
- Advantages and Disadvantages of XM’s No Dealing Desk (NDD) System
- Points to Note When Using XM’s No Dealing Desk (NDD) Method
- ① Assume spreads will widen [Most Important]
- ② Slippage is unavoidable
- ③ Delayed execution does not necessarily mean fraud
- ④ Understanding NDD Differences by Account Type
- ⑤ Not Well-suited for Indicator Trading
- ⑥ Favorable Slippage Occurs, But Don’t Expect It
- ⑦ Strongly Affected by Internet Connection and Environment
- ⑧ Zero-Cutouts = Not Invincible
- Key Points for Correctly Understanding XM’s NDD System
- Frequently Asked Questions About XM’s No Dealing Desk (NDD) System
- Q1. Does XM’s No Dealing Desk (NDD) system truly eliminate dealer intervention?
- Q2. Is XM not an ECN broker?
- Q3. Are widening spreads evidence of due diligence?
- Q4. Is high slippage a sign of fraud?
- Q5. Why does favorable slippage seem so rare?
- Q6. How does XM make a profit despite NDD?
- Q7. Are NDD orders guaranteed to be executed?
- Q8. Is the NDD method suitable for index trading?
- Q9. Is scalping really okay?
- Q10. Can an account be frozen even with NDD trading?
- Related
XMtrading
| Operating company | Tradexfin Limited Fintrade Limited |
| Head office location | Unit E, F28, Eden Plaza, Eden Island, Republic of Seychelles |
| Founding year | 2009 |
| Financial License | （FSA）SD010：Tradexfin Mauritius Financial Services Commission (FSC：)：Fintrade Limited Cyprus Securities and Exchange Commission (CySEC)：Trading Point of Financial Instruments Ltd |
| Language support | English、日本語、Malay、Thai |
| Platform | MetaTrader 4 (MT4)／MetaTrader 5 (MT5) |
| Service Countries | Over 190 countries |
| Number of users | Over 1 million accounts |
| Max Leverage | 1000x |
| Eligible products | Forex、Metal、Stocks、Equity Indices / Index CFD、Energy CFD、Commodities、Cryptocurrency |
What is XM’s No Dealing Desk (NDD) system? Basic Concept
XM’s No Dealing Desk (NDD) system
is a system in which the broker (XM) does not act as a dealer and simply passes orders directly to the market.
First, let’s explain the details to help you understand how it’s different. It offers a wide range of trading options, from day trading to swing trading, and our unique system allows for fast settlement. You can even trade with very small amounts.
● Definition of No Dealing Desk (NDD)
The NDD system is
👉 A system in which traders’ orders are sent directly to liquidity providers (banks/LPs) without going through XM’s dealing desk.
XM is not a “counterparty”
It does not accept or reject orders or manipulate prices
Trades are processed based on market price.
These are its key features.
How NDD Works (Simple Flow)
Trader submits an order
XM’s trading server receives the order
Selects the best price from multiple liquidity providers (LPs)
Executes at the market price
👉 XM acts solely as an intermediary.
Differences between NDD and DD
Officially in Japan, the system is considered NDD. It has a proven track record in Japan.
| 項目 | NDD方式（XM） | DD方式 |
|---|---|---|
| 業者の立場 | 仲介 | 取引の相手方 |
| 価格操作 | 原則なし | 可能性あり |
| リクオート | 原則なし | 発生しやすい |
| 約定拒否 | 起きにくい | 起きやすい |
| 利益相反 | 起きにくい | 起きやすい |
Why XM Uses NDD Trading
To provide a highly transparent trading environment
To allow for unrestricted scalping and automated trading (EA)
To enable stable processing of large orders from around the world
👉 This method is particularly suited to short-term traders and EA users.
Key Points to Know About XM’s NDD Trading
✔ Spreads are “Floating”
May widen depending on market liquidity
More likely to widen during periods of indicative or sudden fluctuations
✔ Slippage occurs
Can be both positive and negative
This occurs because execution is at the prevailing market price
✔ High execution power
Large orders are easily executed in installments
Few order rejections
Why XM’s NDD Method is Considered a Lie
The reason why XM’s content is considered a lie is due to misunderstandings about the definition of NDD and the discrepancy with actual trading behavior (spreads and execution).
To put it simply, XM’s claim to use NDD does not necessarily mean it’s a lie, but regarding its specifications,
considering it the same as “pure ECN” without distinguishing between the two can lead to misunderstandings. Understand the purpose and trends.
Reason 1: The misconception that “NDD” means “full ECN”
Common Misconception
NDD = visible depth of market
NDD = minimal and fixed spreads
NDD = brokers have no involvement in profits
👉 This is an image of ECN, not the overall definition of NDD.
The Real XM
XM uses STP-type NDD (Straight-Through Processing)
Orders are routed to LPs without dealer intervention
However, price distribution and spread design are handled by XM
👉 If you don’t know this, it’s easy to assume that something is different and a lie.
Reason 2: Widening spreads = assumed due diligence
Trader dissatisfaction
Spreads suddenly widen during indicators
Feeling significantly worse than normal
Actual reason
Even with NDD, spreads widen when market liquidity decreases
LPs especially pull back prices around indicator releases and the start of the week
👉 Widening spreads = no evidence of due diligence intervention
Reason 3: Slippage leads to suspicion of “manipulation”
Common complaints
“It always slips in an unfavorable direction”
“Favorable slippage is rare”
Realistic explanation
When the market suddenly changes, execution waits occur
Market orders are executed at the next quoted price
Both favorable and unfavorable situations occur, but people tend to remember only the unfavorable ones
👉 Slippage occurs because of NDD
(Due to DD, execution rejections and requotes are common)
Reason 4: XM engaging in covering trades = assumed due diligence
Common misunderstandings
“XM is covering customer positions”
→ “Dealing with a broker = DD”
Correct understanding
NDD also engages in cover trades for risk management purposes.
This is a discussion of “order processing” and “risk management.”
There is no discretionary intervention in trader orders.
Reason 5: Suspected execution denials or delays.
What actually happens
Execution delays during sudden market fluctuations
Partial execution due to liquidity shortages
👉 This is also a market factor.
A situation that would be a “denial” with a DD broker,
would be a “delay/slippage” with an NDD broker.
Advantages and Disadvantages of XM’s No Dealing Desk (NDD) System
XM’s No Dealing Desk (NDD) system
has advantages such as transparency and execution power, but also disadvantages due to costs and market conditions.
Here, we will summarize the advantages and disadvantages from a perspective that is easy to experience in actual trading. Since it is free to use, try trading with a Standard or Micro account. It is licensed by the Financial Services Agency and is highly reliable and well-reviewed. Use these excellent features to help you win as an individual.
Advantages of XM’s No Dealing Desk (NDD) System
① No dealer intervention (high transparency)
XM is not the counterparty to your trades
Less chances of artificial price manipulation or execution rejections
👉 Less suspicion that “winning will put you at a disadvantage”
② Virtually no execution rejections or requotes
Market orders are processed at market price
Less chances of “the price has changed,” as is common with DD brokers
👉 Less stress, especially for short-term trading
③ Suitable for scalping and EAs
No limit on the number of trades
Automated trading (EA) can be used
👉 XM’s strengths are its NDD + few restrictions on terms and conditions.
④ Favorable slippage can occur.
Depending on market conditions,
You may receive a better-than-expected price.
👉 This generally does not occur with the DD method.
⑤ Relatively strong for large orders.
Obtain the best price from multiple LPs.
Tends to be processed through partial execution.
Disadvantages of XM’s NDD method
① Spreads are prone to fluctuation and widening.
At the time of indicator announcements.
At the beginning of the week or when liquidity is low.
👉 Not suitable for those who prefer fixed spreads.
② Slippage is unavoidable.
During sudden market fluctuations,
Your orders often slip in an unfavorable direction.
👉 Execution stability may be inferior to the DD method in some situations.
③ Not as cost-effective as ECN
Standard Account: Spreads included
Zero Account: Fees apply
👉 Total costs may be higher than with pure ECN brokers.
④ Directly affected by market conditions
Unfavorable during periods of low liquidity
Vulnerable to gaps and sudden fluctuations at the start of the week
⑤ Price distribution is designed by XM
Orders are routed to LPs, but
the displayed price and spread are determined by XM’s distribution logic.
👉 If you expect “complete market directness,” you may feel gaps.
Points to Note When Using XM’s No Dealing Desk (NDD) Method
XM’s No Dealing Desk (NDD) method offers high transparency, but it also has the characteristic of being directly affected by market forces.
Here, we will explain the points to note when using the service, focusing on pitfalls that can easily lead to losses.
While the service allows you to trade attractive products such as cryptocurrencies, gold, currency pairs, and stock indices, some people claim that the NDD method is a lie. We will respond to these concerns below.
① Assume spreads will widen [Most Important]
Caution
At the time of index announcement
The beginning of the week/immediately after market opening
During periods of low liquidity
👉 Spreads temporarily widen
Countermeasures
Avoid trading before and after index announcements
Set stop losses (SL) wider than usual
Confirm the total cost of a Zero account plus fees in advance
② Slippage is unavoidable
Caution
Market orders are executed at the next price
Unfavorable slippage is common
Countermeasures
Use limit orders
Avoid market orders in critical situations
Limit trading volume if execution is important
③ Delayed execution does not necessarily mean fraud
Caution
Sudden delays occur during sudden fluctuations
NDD is more prone to “delays and slippage” than “rejections”
👉 Failure to understand the difference from the DD method can lead to distrust
④ Understanding NDD Differences by Account Type
Standard Account
Costs Included in Spreads
Suitable for Beginners
Zero Account
Minimum Spreads + Commissions
Suitable for Scalping/EAs
👉 NDD Trading Cost Structures Are Different
⑤ Not Well-suited for Indicator Trading
Caution
Sudden Widening of Spreads
Execution Prices Jump
Countermeasures
Do Not Hold Positions When Indicators are Predicting
If Holding, Minimize Lot Sizes
⑥ Favorable Slippage Occurs, But Don’t Expect It
Advantages and Disadvantages Are Random
Disadvantages Are Often Perceived
👉 Expecting a “Favorable Slippage” Can Lead to Failure
⑦ Strongly Affected by Internet Connection and Environment
Caution
Communication Delays = Disadvantages to Execution
Unstable Home Internet Connections are Disadvantages
Countermeasures
Use a Stable Internet Connection
Consider Using a VPS (EA Users)
⑧ Zero-Cutouts = Not Invincible
No Margin Calls, But
Capital Can Easily Become Zero
When Stop-Out Levels are Reached, Execution Continues as Normal
Key Points for Correctly Understanding XM’s NDD System
To properly understand XM’s NDD system (No Dealing Desk), it is important to distinguish between the ideal (ECN) and the actual system (STP-type NDD).
The following are key points to understand to avoid misunderstandings and avoid any discrepancies in practice.
① Understand that NDD does not equal ECN [Most Important]
Correct Understanding
XM is an STP-type NDD system
Not a pure ECN
Misunderstanding this leads to the misunderstanding that…
“No depth of market information = lies”
“Wide spreads = DD”
👉 NDD = No Dealer Intervention
👉 ECN = Exchange-Like Direct Market Connection
② Order Processing and Price Distribution are Separate
Key Points
Order: Automatically Sends to LPs (Liquidity Providers)
Price: XM Aggregates and Distributes Prices from Multiple LPs
👉 There is no discretionary intervention in orders, but
the displayed price is determined by XM’s logic
③ Widening Spreads = Not Fraudulent
Correct Understanding
The spread naturally widens when market liquidity decreases.
This is particularly noticeable at indices, the start of the week, and early mornings.
👉 The flip side of NDD’s “Direct Market Connection”
④ Slippage is also evidence of NDD
Change Your Perspective
DD is More Likely to be “Rejected”
NDD is More Likely to be “Slippery Execution”
👉 Slippage = Higher Execution at Market Price
⑤ Don’t Expect Favorable Slippage
Advantages and Disadvantages are Random
Disadvantages are Often Perceived
👉 The strategy is
not to assume that it will not slip, but to design it so that it will work even if it does slip.
Frequently Asked Questions About XM’s No Dealing Desk (NDD) System
The following are frequently asked questions about XM’s No Dealing Desk (NDD) system, summarized in Q&A format, focusing on commonly misunderstood points. The official website discloses management terms and conditions. Take advantage of industry-leading campaigns and other special offers to manage your eligible account. Manage your preferred trading style with large margin and ample profit potential.
Q1. Does XM’s No Dealing Desk (NDD) system truly eliminate dealer intervention?
A. Yes.
XM uses an STP-type NDD system, which means dealers do not manipulate prices or reject traders’ orders at their discretion.
However, XM handles the distribution of displayed prices and spread design.
Q2. Is XM not an ECN broker?
A. It is not a pure ECN.
XM uses an STP-type NDD system, with the following differences:
❌ No depth of market information displayed
❌ Not fully connected to the market
⭕ Orders are automatically sent to liquidity providers (LPs)
👉 It’s more accurate to understand that the Zero account is similar to an ECN, but not an ECN in its entirety.
Q3. Are widening spreads evidence of due diligence?
A. No.
Even with NDD, spreads naturally widen in the following situations:
When economic indicators are released
Beginning of the week
Times of low liquidity
👉 Widening spreads do not necessarily mean due diligence.
Q4. Is high slippage a sign of fraud?
A. It is not.
With NDD,
market orders are executed at the current market price,
so slippage occurs during sudden market movements.
Both favorable and unfavorable outcomes occur.
Only unfavorable outcomes tend to be remembered.
Psychological factors play a large role.
Q5. Why does favorable slippage seem so rare?
A. They do occur, but
Profits are “natural”
Losses are “strongly remembered”
Because of this, it’s easy to feel a greater disadvantage.
Statistically, it cannot be said that the balance is completely one-sided.
Q6. How does XM make a profit despite NDD?
A.
Standard account: Spread addition
Zero account: Trading fee
👉 Customer losses do not equal XM’s profits.
Q7. Are NDD orders guaranteed to be executed?
A. They are almost always executed, but not 100%.
Extremely low liquidity
Market prices are changing too rapidly
In these cases,
Execution delays
Price slippage
Partial execution
may occur.
Q8. Is the NDD method suitable for index trading?
A. Generally, it is not.
Sudden widening of spreads
Price jumps
Unexpected execution
👉 If targeting indicators, it is best to minimize lot sizes or avoid trading altogether.
Q9. Is scalping really okay?
A. It is completely permitted under the terms and conditions.
No limit on number of transactions.
EAs allowed.
However,
A strategy must be designed with widening spreads and slippage in mind.
Q10. Can an account be frozen even with NDD trading?
A. Yes, if there is fraudulent activity.
Examples:
Bonus abuse
Arbitrage fraud
False registration/violation of terms and conditions
👉 NDD does not mean you can do whatever you want.
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