Advice on DMA

Davidee

Member
80 2
With DMA you broker is simply putting you trade directly into the market place. A market maker however takes the other side of your trade and may try to hedge their exposer to your position.

If you are trading large liquid markets then a DMA broker is probably best. However if you're looking to trade CFDs on penny stocks you might find the liquidity isn't there to trade these things with the DMA model and need a market maker to take the otherside of those positions -this is why they're sometimes called liquidity providers.
 

SlowlyButSurely

Well-known member
324 38
FYI there are even large institutions which advertise as large institutional liquidity providers (offering 'DMA' services) but in actual fact offer liquidity from just one bank. They arrange a deal with said bank and so you don't get proper market liquidity and even placing a 1 lot trade on EUR USD at 12pm GMT can take an age to get filled.

Of course it has not been proven but quite a few people suspect this sort of activity and have questioned the company about it. When in the world of finance its best not to trust anyones word basically
 
 
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