ECN vs DMA vs STP vs Market Maker

What is the difference between ECN, DMA, STP and MM?

 MMSTPDMAECN
Full nameMarket MakerStraight Through ProcessingDirect Market AccessElectronic Communication Network
Broker structureDDSTP + NDDDMA + STP + NDDECN + DMA + STP + NDD
Dealing modelDealing DeskNo Dealing DeskNo Dealing DeskNo Dealing Desk
ExecutionInstant ExecutionInstant & Market ExecutionMarket ExecutionMarket Execution
Spreadsfixedfixed & floatingfloatingfloating
Pricing4 & 5 digits4 & 5 digits5 digits5 digits
Commissionnonono & yesyes
Who is on the other side of your tradeYour brokerOrders sent to another brokerOrders sent to several other brokers/banksOrders sent to the ECN network
Conflict of interestsyesnonono
Depth of the Market (DOM)nonono & yesyes
Speed of executionregularregularfastfast
Re-qoutesyesyesnono
Slippageyesyesyesyes
News tradingnonoyesyes
Scalpingno & yesno & yesyesyes
Deposit requirements amountlowlowaveragehigh
Spread costhighaveragelowvery low
Illustration:

Trader
|
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

Abbreviation:

  • ECN – Electronic Communication Network
  • DMA – Direct Market Access
  • STP – Straight Through Processing
  • NDD – No Dealing Desk
  • DD – Dealing Desk
  • MM – Market Maker

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Note: We recommend not to use more than 5% of your equity in open trades at one time. Risk management is very important to minimize losses and maximize profits.
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