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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.

I’ll cover 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

ECN vs STP vs DMA
As a trader, you should understand how different brokers affect your trading. This article compares ECN, STP, Market Maker, and DMA brokers. We’ll define and compare brokers.

ECN brokers provide traders direct market access. ECNs provide tight spreads and fast execution but demand a commission every trade.

STP brokers direct orders to liquidity providers. STP brokers charge trade commissions and spread markups.

Market makers provide liquidity. Market makers usually charge a spread on trades but may offer refunds.

DMA brokers offer direct market access. DMA brokers have tight spreads and fast execution but charge a commission per trade.

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

Max. Leverage

Spreads

Trading Acc.

Instruments

Connect

FP Markets 

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

Eightcap

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IC Markets

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

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

Axi 


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

InstaForex

BVI FSC

Up to 1:1000

From 0 pips

Broker Type:
MM | Binary
 6 Accounts

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

NordFX

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

FXOpen 

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

Vantagemarkets

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

RoboForex

FSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

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

Fxview

CySEC, FSCA  and FSC

Up to 1:500

From 0.0 pips

Broker Type:
Raw | Zero | Premium
3 Accounts

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

FBS

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

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

Blackbull
Markets

FMA, FSA

Up to 1:500

From 0.0 pips

Broker Type:
STP | ECN

6 Accounts

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

  Review  


Blueberry Markets

ASIC, SCB

Up to 1:500

From 0.0 pips

Broker Type:
ECN | MM
2 Accounts 

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


VALUTRADES

FCA, VFSC
CIMA, ASIC

Up to 1:500

From 0.0 pips

Broker Type:
ECN | MM
4 Accounts 

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


FXGT

SFSA, FSCA, CySec*

Up to 1:500

From 0.0 pips

Broker Type:
STP | ECN

6 Accounts

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


SVGFSA, FSC, FSA

Up to 1:500

From 0.0 pips

Broker Type:

STP | ECN 

3 Accounts

Forex, Indices,
Commodities,
Shares, Crypto

Exness

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 0.4 pip

Broker Type:
STP | ECN
 6 Accounts

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

  Review  


FINMA 

Up to 1:100

From 0.1 pip

Broker Type:
STP | ECN
 7 Accounts

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

An ECN

“Electronic Communications Network” is ECN. A trading platform that electronically connects buy and sell orders between market participants. ECNs charge a minor transaction fee. Eightcap, FBS, and IC Markets are major ECNs.

An Electronic Communication Network (ECN) Broker Defined

ECN brokers let traders trade directly with each other and against the broker’s in-house liquidity.

Thus, an ECN broker matches its clients’ orders with those of other market participants including forex traders, banks, and financial institutions.

How an ECN differs from other Broker types

STP brokers connect their clients’ orders with other market participants like ECNs. STP brokers charge a tiny commission per trade rather than providing liquidity.

Market maker brokers offer their clients liquidity. Trading with a market maker implies trading against the broker.

DMA brokers trade directly with other market players like ECN and STP brokers.
DMA brokers are less anonymous than ECN and STP brokers.
DMA brokers require trading accounts.

ECN accounts can make trading faster and cheaper.

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

FP Markets

Since 2005

Offices:

Australia, Cyprus, South Africa

FP Markets

Minimum Deposit:50 USD 
Account currency: USD, EUR, GBP
Leverage:1:500*
Accounts:Raw, Standard, Pro, IRESS account
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, ETFs Crypto, Bonds
Trading Platform:MT4, MT5, cTrader, WebTrader, Mobile App,  Superior VPS solutions
Regulation:ASIC, CySEC, FSCA
Spreads:Raw:  from 0.0 pips,
Standard: from 1.0 pip   
Visit BrokerBroker Review

FXOpen

Since: 2005

Offices:

UK, Australia, Cyprus, Nevis 

  FXOpen

Minimum Deposit:$15
Account currency:GBP, USD, EUR
Leverage:Up to 1:500
Accounts:Micro, STP, ECN, Crypto, Demo
Instruments Offered:Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4,   MT5*, TickTrader*  Free Forex VPS Hosting
Regulation:ASIC, FCA
SpreadsMicro: Floating Spread
STP: Tight Spreads
ECN: Raw Spreads
Crypto: Tight Spreads
Visit BrokerBroker Review

InstaForex

Since: 2007

Offices:

 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:BVI FSC 
Spreads:0 pips: Insta.Eurica and Cent.Eurica;
3–7 pips: Insta.Standard and Cent.Standard
Visit BrokerBroker 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 BrokerBroker 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
SpreadsFrom 0
Visit BrokerBroker Review

RoboForex

Since: 2009

Offices:

Belize

RoboForex

Minimum Deposit:$10
Account currency:USD, EUR, and GOLD
Leverage:1:2000 
Accounts:ECN, Pro, Prime, ProCent, R Stocks Trader
Instruments Offered:Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies, Futures
Trading Platform:MT4, MT5, WebTrader, Free VPS-Server, R StocksTrader
Regulation:FSC 
Spreads:From 0.0 pips
Visit BrokerBroker 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)

Direct Market Access (DMA). Direct trading allows traders to access the market without a third party.

Experienced traders who can execute complex orders and trade high volumes should use this method.

DMA trading works for forex, equities, commodities, and more. DMA trading reduces requotes and slippage.

A Direct Market Access (DMA) Broker Defined

DMA brokers give clients immediate market access. DMA brokers let you deal directly with the market, without an intermediary.

DMA brokers require more market expertise, thus experienced traders employ them. DMA brokers have cheaper spreads and commissions than other brokers.

DMA trading is riskier than broker trading. You are accountable for your trades and have no one to advise you. Before trading, you must comprehend the market.

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)

Market Marker is MM. Market makers buy and sell securities to offer liquidity. They profit on the spread between bid and ask pricing. Market makers keep markets liquid and pricing constant.

Market makers can be risky. They may act against investors to make a profit on the spread. A market maker may set a low bid price to attract sellers, then sell the same securities at a higher price. Front-running hurts investors and raises costs.

Thus, market makers’ risks must be considered before doing business with them. Before trading with a market maker, examine their prices and spreads.

A Market Maker Broker Defined

A market maker broker creates a two-sided market for clients.
The market maker broker will purchase or sell assets at a specified price regardless of market conditions.
This broker usually charges a spread, the difference between the bid and ask price.

Market maker brokers ensure price fairness and liquidity in financial markets. Front-running and Wash trades are unfair behaviors.

Understanding broker types and how they work is crucial when picking a broker. ECN or STP brokers offer minimal fees and fast execution.

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

Max. Leverage

Spreads

Trading Acc.

Instruments

Connect

FP Markets 

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

Eightcap

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IC Markets

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

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

Axi 


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

InstaForex

BVI FSC

Up to 1:1000

From 0 pips

Broker Type:
MM | Binary
 6 Accounts

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

NordFX

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

FXOpen 

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

Vantagemarkets

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

RoboForex

FSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

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

Fxview

CySEC, FSCA  and FSC

Up to 1:500

From 0.0 pips

Broker Type:
Raw | Zero | Premium
3 Accounts

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

FBS

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

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

Blackbull
Markets

FMA, FSA

Up to 1:500

From 0.0 pips

Broker Type:
STP | ECN

6 Accounts

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

  Review  


Blueberry Markets

ASIC, SCB

Up to 1:500

From 0.0 pips

Broker Type:
ECN | MM
2 Accounts 

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


VALUTRADES

FCA, VFSC
CIMA, ASIC

Up to 1:500

From 0.0 pips

Broker Type:
ECN | MM
4 Accounts 

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


FXGT

SFSA, FSCA, CySec*

Up to 1:500

From 0.0 pips

Broker Type:
STP | ECN

6 Accounts

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


SVGFSA, FSC, FSA

Up to 1:500

From 0.0 pips

Broker Type:

STP | ECN 

3 Accounts

Forex, Indices,
Commodities,
Shares, Crypto

Exness

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 0.4 pip

Broker Type:
STP | ECN
 6 Accounts

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

  Review  


FINMA 

Up to 1:100

From 0.1 pip

Broker Type:
STP | ECN
 7 Accounts

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

+ posts

Cory has been a professional trader since 2005, and holds a Chartered Market Technician (CMT) designation. He has been widely published, writing for Technical Analysis of Stock & Commodities magazine, Investopedia, Forbes, Benzinga, and others.