⭐ DMA vs STP Forex Brokers
DMA vs STP Forex brokers: what is the difference?
Both are sending orders to the Liquidity providers, while the Aggregation of orders and Access to Liquidity will differ:
| DMA |
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STP |
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VS |
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| NDD + STP + DMA + ECN-style pricing |
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NDD + STP |
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DMA (Direct Market Access)
NDD - No Dealing Desk
STP - Straight Through Processing
DMA - Direct Market Access to the Top-tier liquidity
ECN-style pricing - competitive bid/ask quotes
resembling ECN pricing |
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NDD - No Dealing Desk
STP - Straight Through Processing |
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| Multiple liquidity providers |
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Single liquidity provider |
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Access to multiple liquidity providers at any time |
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Access to a single liquidity provider, which sometimes can be it's own sister company |
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| Access to the Best price |
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Access to a Single price |
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Price aggregation from several liquidity providers allows for selection of the Best price |
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A quote received from a single liquidity provider has no alternatives |
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| Guaranteed anonymity |
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Possible identification of individual traders |
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Liquidity providers cannot identify individual traders and their profitability levels, no price worsening can take place |
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Individual traders in some cases can be identified (in case with a sister company), thus price worsening/manipulation cannot be excluded |
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| Low quality execution excluded |
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Low quality execution possible |
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Large slippage and delays minimized due to a choice of alternative faster quotes coming from other liquidity providers |
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Orders can be executed with a large slippage or delay due to being fully dependent of a single liquidity provider |
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| Protection against non-market quotes |
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No protection against non-market quotes |
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Liquidity providers who quote non-market quotes won't trigger Clients' stop orders |
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With a non-market quote Clients' Stop orders will be triggered |
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| Shielding from force majeure |
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Vulnerability to force majeure |
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In the event of a force majeure (such as no quotes, loss of communication with a liquidity provider, etc), Clients' orders will be executed by another liquidity provider |
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During a force majeure event, no back-up solutions available |
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