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DMA Forex brokers | DMA (Direct Market Access)




DMA Brokers. What is DMA?

DMA - Direct Market Access - is a type of FX execution where traders are offered direct access to the physical market, enabling them to place trading orders with liquidity providers (leading foreign exchange banks, other brokers, market makers etc).

Sounds similar to STP and ECN dealing? It's close, but there is a difference.

DMA (Direct Market Access) is offered by ECN brokers and by some STP brokers. In fact, ECN brokers always offer DMA, but not all STP brokers offer DMA. Let's take a look at the differences.
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Broker discussion area

BrokerGuru

October 23, 2011

Yes, all 3 brokers are true DMA/STP, regulated and well known companies, absolutely no scam there.


trader

October 23, 2011

HI brokerguru
what about broker go markets, vantagefx uk, and ibfx ..
are they true DMA / STP Broker? and not SCAM ?


BrokerGuru

September 13, 2011

Hi,
At 100Forexbrokers we don't recommend/suggest any particular broker.
We keep a 100% neutral unbiased position. It's our website policy.
Our goal is to offer you facts & figures, so that you can make an educated choice.

Thank you!


trader

September 13, 2011

Hi BrokerGuru,

Can you please recommend me a real and good DMA broker that provide Manager Account facility.

Thank you in adv. :)


BrokerGuru

September 8, 2011

Hi Daffi,

yes, the Standard account at ThinkForex is DMA/STP.


Daffi

August 20, 2011

Hi,
ThinkForex Standard account is an DMA/STP account?

Thank You,
Daffi


BrokerGuru

August 17, 2011

It looks like TradeStation has removed all references about Gain Capital from their website.
I'll post updates once we find out more information.


trader

August 16, 2011

Should Tradestation be in this list? Tradestation Securities transferred all forex accounts to the dealing desk of Gain Capital on April 9, 2011.
A Tradestation Forex Risk Statement ends with: "If you open a Forex account with TradeStation, this means that your FX deals will be with Gain Capital Group, Inc., the dealer firm to which TradeStation refers your FX trading business through an interface between TradeStation and the online dealbook system Gain Capital Group, Inc. provides. Gain Capital Group, Inc. will provide the liquidity that will be made available for your FX trading, and will act as dealer and counterparty for your FX transactions."


BrokerGuru

August 13, 2011

Yes, it's possible to trade with 0.01 lots on ECN and/or DMA account, but you should know that your broker will try to accumulated several small orders from traders into at least 0.1 lot order, which a broker then can send to liquidity providers. If a broker can't do that fast enough, he would have no option but to facilitate your order quickly on his own side until he has enough orders to finally hedge them with liquidity providers.
It certainly creates more work for brokers, but with tough competition in Forex business nowadays, they don't have much choice.


trader

August 13, 2011

Hello and thanks for all the posts - this has been a great help.

So, to trade on an ECN or DMA/STP account that means the minimum lot size has to be 0.1?
Is it possible to get an ECN or DMA/STP account under that minimum lot size?

One site posted a minimum "lot step" at 0.01 aside the 0.1 for it's ECN, but since my understanding is now that LPs won't clear anything below 0.1, so a broker who says they are ECN or DMA/STP and allow 0.01 or 0.05 lot spots must be lying and pooling/counter trading at the DD.

I'm planning on trading 1:1 leverage at 0.01 lot positions (go ahead and laugh!! :P), and I'm afraid I'll just have to trade on DD accounts. This will probably be okay for some trading strategies I guess except for trading high volatile news when re-quotes can become a common occurrence. I'd just like the opportunity to trade the news too without having to worry about execution!


BrokerGuru

July 19, 2011

Thank you for the feedback and useful reference!


trader

July 19, 2011

Thanks BG for the great write up on DMA .. Being waiting for months for good information between the difference of DMA, STP and ECN Dealing.

The only information I had to go on was thru APBG forum post about - DMA vs STP - Below is part of the post .

"DMA goes beyond the STP model in that all rates are directly from banks with fully transparent market and revenue models. In practical terms this means trades are done on excellent prices for the full ticket amount because banks are refreshing their prices several times per second.
Partial fills almost never occur and platform rejection rates are significantly less than one percent
Who uses DMA?
Main users of DMA range from hedge funds to experienced individuals who want to trade on tight, neutral prices that are not spread or skewed in any way. There is a strong demand from large banks and brokers. These institutions are seeking the best possible FOREX model to offer their clients in terms of transparency, pricing, liquidity, low latency trading capabilities
Raising standards
As DMA grows in popularity, it will place pressure on the various FX execution venues to improve their technology standards and execution quality.
DMA is an enabling market structure in terms of efficient liquidity access and market transparency, raising standards in execution quality."


BrokerGuru

July 5, 2011

As far as we know, LCG offers ECN trading, but it shouldn't be a problem to ask broker where they send the orders to:
- if they work with only certain banks/liquidity providers according to their contracts - e.g. with own liquidity pool - that's DMA dealing.
- if they send orders to the ECN pools - where there is an unlimited number of participants, no individual contracts signed - that's ECN dealing.

DMA price quotes are considered to be more reliable = read "executable", since they come from known liquidity providers, who commit to their prices with little to no rejection.
Let me further confirm this by quoting one of the brokers who explains this DMA vs ECN difference:
"With ECN's, it's an open portal essentially allowing anyone to become a market maker to your trades.
Whether it's client matching, stp, or filled as house risk to counterparty. Inside an ECN, most banks don't price very well which means most of the tight pricing is coming from other clients, hedge funds, or the broker hosting the pool themselves. If that is the case, then you really aren't avoiding any of the issues why people are leaving the dealing desk model. With open forums allowing anyone to price, this can cause re-quotes, major slippage, partial fills, phantom liquidity, etc.
With a true DMA model, since the only liquidity providers are banks, the pricing coming in and the depth of book, is executable not phantom or other market makers looking to gauge the market then rejecting orders. Since all orders are instantaneously passed through to the pricing banks on a best bid/ask basis, they have committed to be here for the clients providing tight streaming rates with no re-quoting, no partial fills, and a low rejection rate (less than half of 1 percent)."


trader

July 4, 2011

Hi , i noticed that LCG is listed under ECN group on your site and after reading their site it looks like they are STP/DMA type , which is better in your opinion ECN or STP/DMA ? thanks


BrokerGuru

June 24, 2011

That's right, Gábor

At Pepperstone you have:
- Razor accounts ($200), which are ECN.
- Standard accounts ($200), which are DMA/STP.


Gábor

June 24, 2011

Hi,

Pepperstone is listed both as an ECN/STP and a DMA/STP brokerage. Am I right to think that it is because of the two different accounts they offer? I'm a bit at a loss.

Gábor


BrokerGuru

June 15, 2011

Hi PetroB,

DMA/STP brokers can choose to charge commission, it's fine. There are a few brokers who do that.


PetroB

June 14, 2011

Broker Guru,
I checked on the Harbour FX site, and they charge commissions. This would mean, I believe, that they are not a true DMA/STP.
PetroB


BrokerGuru

May 13, 2011

Hi Luis,

Thank you for the feedback.
I'm a little bit behind the schedule with emails, sorry about that.

1 - updated.
2 - updated. Thank you!

Regarding your questions:

1 - yes, after doing one more check and talking to support I finally realized that I was wrong. HotForex doesn't work with ECN liquidity, but rather with several own liquidity providers. The commission was added to compensate for the low spreads (basically you can treat it a mark-up). So, in the end, we have HotForex "Currenex" account, which is STP, it's in fact DMA/STP.

2 - despite all beliefs it's tricky to trade during the news. I would say that the best execution should be from DMA brokers (no requested while on market execution, but you could get slipped if price moves fast, still you get filled), then second place goes to ECN (though DMA and ECN are pretty equal, DMA is a bit more straight-forward in terms of guaranteed executable quotes that ECN). Regular STP brokers won't be suitable for news trading.

8 lots is not a large order for any broker, you should have no problems with that.

info@100forexbrokers.com is the direct mail, it's my email, where I answer to all inquiries. I don't have a facebook page, somehow never tried to create one..


Luis

May 13, 2011

Hi Broker Guru:

First of all i would like to tell that in my opinion this Site (100ForexBrokers.com ) is the best forex Site in the world to take doubts, congratulations for that.

Now let me correct 3 things because i want contribute to the sucess of ur Site:

1- I am sure that Hotforex have 6 liq providers, and not 5, u can confirm with support

2- I am sure hotforex in currenex account takes 10$ per round lot trade and not 5$, they wrote 5$ in the site but its not per round lot Trade, its 5$ per per 100,000 USD Traded

Now the last thing and more important, i talked with support in order to know if they are DMA or if they are STP or ECN, and i told i had Currenex account, and they guaranteed me that even in currenex account they are STP and not ECN, i talked with 4 different support members, and all told me that my account (currenex) was STP, actually they dont use never ECN

So i would like to ask u 2 things:

1- Is possible that u are wrong about currenex being ECN ?

2- I want to start trading based on the news (in my case 5 seconds after the new released i will open position manually, not with buy or sell stops or limits), never did it in my life but will start soon, so what i want is a broker that allow me to open positions when the prices are moving ultra fast without requotes , and more important, in the price of the moment i clicked in.

For this kind of strategy what kind of Broker u reccomend me ? ECN STP or DMA ?

Another thing, i will buy always 8 lots, that big number of lots can make me loose the price or so ?

One more thing: can i get your direct mail or facebook ?

Luis


BrokerGuru

May 11, 2011

Hi Luis,
Currenex account at HotForex is an ECN account with $5.00 commission per 100k round turn lot.

At our site we cannot provide opinions/suggestions/recommendations about any Forex brokers. Our goal is to collect data and facts and offer this information to traders. Thank you for your understanding.


Luis

May 11, 2011

Hello. i am professional, and i choosed HotForex to trade 2 weeks ago. Was a risky move because the site is not knows yet because have less than 3 years. However i am ultra hapy, never got a requeote, spreads are great, and in news time it dontchanges almost nothing. So i love it.
My account is Currenex account, and i would like to ask u if thi s account is ECN or STP/DMA.
Oh, and if u can, pelase give meur opinion about this broker

Luis


BrokerGuru

May 4, 2011

Yes, liquidity providers will be counterparties to your trades with DMA.

There always has to be one, no matter if it's:
a) a deliang desk - the broker himself is your counterparty
b) a no-deliang desk STP or DMA - one of the liquidity providers will be your counterparty
c) a no-deliang desk ECN - again one of the liquidity providers will be your counterparty.

With the DMA model stop hunting is not possible, because your order is sent to the liquidity providers anonymously, so that they don't know where your stops and profit targets are.


trader

May 3, 2011

HI BG

I would like to know more about DMA, is that the liquidity providers will be client's counter party? Is there any stop hunting will happen?

Thank You!



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