What is the difference between ECN, DMA, STP and MM?
| MM | STP | DMA | ECN | |
|---|---|---|---|---|
| Full name | Market Maker | Straight Through Processing | Direct Market Access | Electronic Communication Network |
| Broker structure | DD | STP + NDD | DMA + STP + NDD | ECN + DMA + STP + NDD |
| Dealing model | Dealing Desk | No Dealing Desk | No Dealing Desk | No Dealing Desk |
| Execution | Instant Execution | Instant & Market Execution | Market Execution | Market Execution |
| Spreads | fixed | fixed & floating | floating | floating |
| Pricing | 4 & 5 digits | 4 & 5 digits | 5 digits | 5 digits |
| Commission | no | no | no & yes | yes |
| Who is on the other side of your trade | Your broker | Orders sent to another broker | Orders sent to several other brokers/banks | Orders sent to the ECN network |
| Conflict of interests | yes | no | no | no |
| Depth of the Market (DOM) | no | no | no & yes | yes |
| Speed of execution | regular | regular | fast | fast |
| Re-qoutes | yes | yes | no | no |
| Slippage | yes | yes | yes | yes |
| News trading | no | no | yes | yes |
| Scalping | no & yes | no & yes | yes | yes |
| Deposit requirements amount | low | low | average | high |
| Spread cost | high | average | low | very low |
| Illustration:Trader | STP broker | Prime broker | Aggregator platform | Global connection | Banks & other Liquidity providers | ECN Network |
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| Related topics: ECN Forex brokers – in-depth description & comparison DMA Forex brokers – DMA vs ECN vs STP STP Forex brokers – difference and trading conditions |
Abbreviation:
- ECN – Electronic Communication Network
- DMA – Direct Market Access
- STP – Straight Through Processing
- NDD – No Dealing Desk
- DD – Dealing Desk
- MM – Market Maker
Searching for the best brokers is always important in any market but the FX market will always stand out because it’s the largest in the world, these broker types will affect how you trade so make sure you choose the correct one.
