All trades with a retail dealing desk (mini, regular or multi-million) will be handled in-house initially. The only difference will be in what they do with that position afterwards. If you trade size, then the liklihood of a broker offsetting their risk to an outside source is higher. Also your track record probably determines what they do with it as well. Since they have a record of all of your previous activity, it would be stupid of them not to have some algorithm sorting trades from each account into two big piles: LONG TERM LOSERS (hold as long as possible) and LONG TERM WINNERS (offset immediately). The only difference with mini lots is that they must be aggregated into a size that can be traded with banks, so they couldn't immediately offset a $10,000 position. But since 99.99999999% of mini accounts are losers (they will be beginners for the most part) then there is no real urgency to do so. The real advantage to a big forex firm is not in trying to bet against single accounts, but rather in the overall effect of the retail trader being wrong most of the time. Think of the edge you have as someone like FXCM where there are so many accounts. All you need to do is balance your own position so that it is opposite that of the majority of your clients. Combine that long-run tendency with capturing the bid/ask and you have a money maker with little risk.
Well put. My position is that I would never utilize a dealing desk for the reasons previously stated. However, if you have to use a mini, then gravitate toward a broker whose primary biz is non dealing desk. In my opinion, you'll have a much more even playing field that way. I could be wrong. I doubt it though Good trading!