ECN vs STP vs Market Makers vs DMA

As a trader, you have many choices when it comes to picking a broker. Do you want an ECN, STP, market maker, or DMA? This can be a difficult decision, especially if you don’t know the difference between these four types of brokers.

An ECN broker is a type of broker that uses an electronic communication network to connect traders to different liquidity providers. ECN brokers offer their clients tight spreads and the ability to trade in large volumes.

A STP broker is a type of broker that Straight Through Processing. STP brokers route all of their clients’ trades directly to the market, without taking the other side of the trade themselves. STP brokers offer their clients tight spreads and the ability to trade in large volumes.

A market maker broker is a type of broker that provides liquidity to the market by taking the other side of trades themselves. Market maker brokers typically offer their clients wider spreads than other types of brokers.

DMA is an acronym for Direct Market Access. DMA brokers route their clients’ orders directly to the market, without going through a dealing desk. DMA brokers typically offer their clients lower commissions than other types of brokers.

Keynote:
ECN brokers
are best suited for experienced traders who are looking for low spreads and fast execution.
STP brokers are ideal for beginners and intermediate traders who want to avoid dealing with requotes.
Market makers are ideal for those who want to trade with a large amount of leverage.
DMA brokers are best suited for advanced traders who want to have direct access to the market.

We’ll be covering each of these types of brokers in detail below as well as their key characteristics and also highlight the advantages and disadvantages of each type of broker.
We will compare the features of ECN, STP, Market Maker and DMA accounts, and discuss the advantages of trading with each account type. The four most common types of brokerages are: ECN, STP, MM, and DMA.

ECN vs STP vs Market Makers vs DMA

As a trader, it’s important to understand the different types of brokers that are available to you, and how they can impact your trading. In this article, we’ll cover the four main types of brokers: ECN vs STP vs Market Makers vs DMA. We’ll define each type of broker, and discuss the pros and cons of each.

An electronic communication network (ECN) is a type of broker that allows traders to connect directly to the markets. ECNs typically charge a commission on each trade but offer tight spreads and fast execution.

A straight-through processing (STP) broker is a type of broker that route orders directly to liquidity providers. STP brokers typically charge a commission on each trade, but may also offer a markup on spreads.

A market maker broker is a type of broker that provides liquidity to the markets. Market makers typically charge a spread on each trade, but may also offer rebates on trades.

A direct market access (DMA) broker is a type of broker that provides direct access to the markets. DMA brokers typically charge a commission on each trade but offer tight spreads and fast execution.

Recommended ECN Brokers

Choosing the correct broker for trading is critical to your trading journey, there are many factors you should take into consideration specifically for ECN trading before settling with the broker you may be trading with or when switching to a new choice broker which is best suited to your needs and factors which are important to you personally.

Broker

Regulators

Leverage

Spreads

Trading Acc.

Instruments

Connect

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC,FCA, DFSA, FSC

Up to 1:500

From 0 - 0.4 pips

Broker Type:
STP | ECN
 3 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

CySEC, FSC BVI, FSC

Up to 1:1000

From 0 - 7 pips

Broker Type:
MM | Binary
 6 Accounts

Forex, Indices,
Commodities,
Metals, Energies, Shares, Crypto

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IFSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
ETFs, Shares, Crypto

ASIC, CySEC

Up to 1:500*

From 0.0 pips

Broker Type:
STP | ECN | DMA 2 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, ETFs Crypto, Bonds

An ECN

ECN is an acronym for “Electronic Communications Network”. It is a type of trading platform that matches buy and sell orders electronically between different market participants. ECNs charge a small commission for each transaction. Some of the bigger ECNs are eightcap, FBS, and IC Markets.

An Electronic Communication Network (ECN) Broker Defined

An electronic communication network (ECN) is a type of broker that allows traders to place orders directly with each other, while also providing the opportunity to trade against the broker’s in-house liquidity.

In other words, an ECN broker connects its clients’ orders with those of other market participants, such as other forex traders, banks, and financial institutions.

How an ECN differs from other Broker types

An STP broker is very similar to an ECN in that it also connects its clients’ orders with those of other market participants. However, an STP broker makes its money by charging a small commission on each trade, rather than by providing liquidity.

Market maker brokers are those that provide their own liquidity to their clients. This means that when you place a trade with a market maker, you are actually trading against the broker itself.

DMA brokers are similar to ECN and STP brokers in that they allow you to trade directly with other market participants.
However, DMA brokers do not provide the same level of anonymity as ECN and STP brokers.
This is because DMA brokers require you to have an account with them in order to trade.

If you’re looking for a more efficient and cost-effective way to trade, an ECN account may be right for you.

ECN Execution Recommended Brokers

Exness

Since 2008

Offices:

UK, Cyprus, Seychelles

Exness

Minimum Deposit: Standard; Cent; Plus: $1 | Raw Spread, Zero, Pro:$200
Account currency: USD
Leverage: From 1:100 up to 1:2000
Accounts: Standard, Standard Cent, Standard Plus, Raw Spread, Zero, Pro
Instruments Offered: Forex, Indices, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, WebTrader, Mobile, Free VPS hosting
Regulation: FCA, CySEC, FSA, CBCS, FSC,  FSCA
Spreads: Standard; Cent: from 0.3 pips,
Standard Plus: from 1 pip
Pro: from 0.1 pips,
Raw spread; Zero: from 0 pips,
Visit Broker Broker Review

AXI

Since: 2007

Offices:

UK, Australia, UAE, Saint Vincent & the Grenadines

AXI

Minimum Deposit: $1
Account currency: AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, SGD, USD
Leverage: Up to 1:500
Accounts: Standard, Pro, Elite
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform:  MT4, PsyQuation with Axi,  WebTrader, VPS hosting
Regulation: ASIC,FCA, DFSA, FSC
Spreads Standard: from 0.4 pip, Pro: from 0 pip
Visit Broker Broker Review

InstaForex

Since: 2007

Offices:

Cyprus, St.Vincent & the Grenadines, British Virgin Isles

InstaForex

Minimum Deposit: From $1
Account currency: EUR, USD
Leverage: From 1:1 up to 1:1000
Accounts: Demo, Insta.Standard, Insta.Eurica, Cent.Standard, Cent.Eurica, PAMM
Instruments Offered:
Forex, Indices, Futures, Options, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: МТ4, МТ5, InstaTrader, WebTrader, Multiterminal, Mobile Trading, VPS hosting
Regulation: CySEC, FSC BVI, FSC
Spreads: 0 pips: Insta.Eurica and Cent.Eurica;
3–7 pips: Insta.Standard and Cent.Standard
Visit Broker Broker Review

EightCap

Since: 2009

Offices:

Australia, Vanuatu

EIGHTCAP

Minimum Deposit: $100
Account currency: AUD, USD, GBP, NZD, SGD, EUR
Leverage: 1:30 for Australian clients
1:500 for Non-AU clients
Accounts: Standard Account, Raw Account
Instruments Offered:
Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, Mobile, VPS hosting
Regulation: ASIC, VFSC
Spreads: From 0.0 pips
Visit Broker Broker Review

IC Markets

Since: 2007

Offices:

Australia, Cyprus, Seychelles

IC MARKETS

Minimum Deposit: 200 US dollars
Account currency: USD, AUD, GBP, CHF, JPY, NZD, SGD, CAD, HKD, BTC
Leverage: From 1:1 to 1:500
Accounts: Demo, Raw Spread, cTrader, Standard, Islamic, PAMM
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Bonds Cryptocurrencies
Trading Platform: cTrader, MT4, MT5, WebTrader, VPS hosting
Regulation: AFSL, ASIC, CySEC, FSA
Spreads From 0
Visit Broker Broker Review

FBS

Since: 2009

Offices:

Cyprus, Belize

Minimum Deposit: $1 , €10
Account currency: Euro
Leverage: 1:3000 
Accounts: Standard Account, Cent Account, Demo Standard Account, Demo Cent
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, Multiterminal, WebTrader, FBS Trader, VPS hosting
Regulation: CySEC, FSC, FSCA, ASIC
Spreads: From 1 pip
Visit Broker Broker Review

Straight Through Processing (STP)

STP stands for Straight Through Processing. STP brokers are similar to ECN brokers in that they also use an electronic communications network to connect their clients to other market participants. However, STP brokers usually have a dealing desk and may trade against their clients.

A Straight Through Processing (STP) Broker Defined

A STP broker is defined as a financial institution that provides wholesale forex services to institutional traders.

When a trade is made, the order is sent directly ‘through’ the broker to their liquidity providers. There is no human intervention in the process, hence the term ‘straight through processing’ or STP.

An STP broker makes their profit from the spreads they add to the bid and ask prices they receive from their liquidity providers. They may also charge a small commission on each trade.

Keynote:
STP brokers is beneficial for traders who want their orders to be executed quickly and without any interference.

Direct Market Access (DMA)

DMA is short for Direct Market Access. As the name suggests, this type of trading gives traders direct access to the market, without going through a third party.

This type of trading is beneficial for experienced traders who want to trade large volumes and have the ability to execute complex orders.

In addition, DMA trading can be used to trade a variety of markets including forex, stocks, commodities, and more. One of the key advantages of DMA trading is that it can help traders avoid dealing with requotes and slippage.

A Direct Market Access (DMA) Broker Defined

A Direct Market Access (DMA) broker is a type of broker that provides their clients with direct access to markets. This means that when you trade with a DMA broker, you are trading directly with the market, without the broker acting as a middleman.

DMA brokers are typically used by more experienced traders, as they require a higher level of knowledge and understanding of the market in order to be successful. However, DMA brokers can offer some advantages over other types of brokers, including lower spreads and commissions.

It is important to remember that with DMA trading, you are taking on more risk than if you were to trade through a traditional broker. This is because you are responsible for your own trades, and there is no one to offer guidance or advice. As such, it is essential that you have a good understanding of the market before you begin trading.

Keynote:
DMA accounts offer greater transparency than other types of accounts. This is because all prices are displayed in the order book and all trades are executed at the same price. This means that there is no scope for price manipulation or dealing desk intervention.

Market Makers (MM)

MM is short for Market Marker. A market maker is a firm that provides liquidity to the markets by buying and selling securities. They typically quote both a bid and an ask price, and make money on the spread between the two prices. Market makers are an important part of the financial ecosystem, as they provide continuous liquidity to the markets and help to ensure that prices are stable.

However, market makers can also be a source of risk. Because they are always looking to make a profit on the spread, they may engage in practices that are not in the best interest of investors. For example, a market maker may quote a very low bid price in order to encourage people to sell their securities, only to then turn around and sell those same securities at a higher price. This practice, known as Front-running, can be detrimental to investors and can ultimately lead to higher costs for everyone involved.

As such, it is important to be aware of the risks associated with market makers before doing business with them. You should always research a market maker thoroughly before deciding to trade with them and make sure that you understand their quoted prices and spreads.

A Market Maker Broker Defined

A market maker broker is a type of broker that provides liquidity to its clients by making a two-sided market.
In other words, the market maker broker is willing to buy or sell assets at a set price, regardless of the current market conditions.
This type of broker typically charges a spread, which is the difference between the bid and ask price.

Market maker brokers play an important role in the financial markets by providing liquidity and helping to ensure that prices are fair and efficient. However, they can also be accused of unfair practices, such as Front-running and Wash trades.

When it comes to choosing a broker, it’s important to understand the different types of brokers and how they operate. If you’re looking for low costs and fast execution, then an ECN or STP broker may be a better choice.

Keynote:

If you’re looking for more guidance and support, then a Market Maker broker may be a better option.

Core Differences Brokers Have With Each Trading Account

Broker Types are ECN: Electronic Communication Network | STP: Straight Through Processing | DMA: Direct Market Access & MM: Market Makers.

Conclusion

ECN brokers are best suited for experienced traders who are looking for low spreads and fast execution.
STP brokers are ideal for beginners and intermediate traders who want to avoid dealing with requotes.
Market makers are ideal for those who want to trade with a large amount of leverage.
DMA brokers are best suited for advanced traders who want to have direct access to the market.

Recommended & Regulated Brokers

Broker

Regulators

Leverage

Spreads

Trading Acc.

Instruments

Connect

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC,FCA, DFSA, FSC

Up to 1:500

From 0 - 0.4 pips

Broker Type:
STP | ECN
 3 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

CySEC, FSC BVI, FSC

Up to 1:1000

From 0 - 7 pips

Broker Type:
MM | Binary
 6 Accounts

Forex, Indices,
Commodities,
Metals, Energies, Shares, Crypto

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IFSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
ETFs, Shares, Crypto

ASIC, CySEC

Up to 1:500*

From 0.0 pips

Broker Type:
STP | ECN | DMA 2 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, ETFs Crypto, Bonds