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ECN vs DMA vs STP vs Market Maker




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
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STP broker
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Prime broker
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Aggregator platform
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Global connection
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Banks & other Liquidity providers
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ECN Network

ECN vs Market maker ECN vs STP ECN vs DMA ECN vs DMA vs STP

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MT4 ECN Forex brokers
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


Broker discussion area

trader

February 12, 2017

Guru, how to find real DMA account? is any difference between DMA platform and other?


trader

October 24, 2016

if we Select ECN Broker how much the commission charges and if trade bring forward to next day what the charges for swap


BrokerGuru

June 19, 2016

There is no universal method.
Here is a detailed guidance that will set you on the right track:
https://www.100forexbrokers.com/how-to-choose-forex-broker


trader

June 18, 2016

guru how to find true forex brokers?


BrokerGuru

February 19, 2016

ECN brokers quote raw (real) spreads, without markups. That means they earn zero on that part. The income for ECN brokers comes from commission. Traders are paying commission for the privilege to trade on the best conditions.
And yes, that means traders pay spreads + commission, which, however doesn't always mean paying double, since spreads are often negligible, close to 0 pips (or sometimes even negative).


trader

February 19, 2016

Just some questions on ECN:
If an ECN broker charges you a commission on a trade then this must mean that the spread we see in the quote is the REAL spread and that there is no markup in that spread. But how does a trader really know? And even if the spread is the real spread, does that not mean then that the trader is paying double for the trade as he/she is paying the commission AND the spread?



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