DMA Trading - what are the benefits?

[ash2010]

Hi All,

I have been spreadbetting for for some time and like most people have made lossess and gains. However one thing that has caught my eye recently was an offering from IG markets - Pure Deal DMA trading. I have read up on this and cannot currently see any major advantages on using this service.

Has anyone used this service? Is it any good?
What are the benefits of using it compared to the normal platform?

The only advantage I can see is that it allows you to open a position inside the spread but from what I gather you can only fill against orders that are present in the order book.

Is it much more complicated then the standard CFD or spreadbetting?

Any responses would be much appreciated.

Thanks

Ash

 

[new_trader]

If you need someone to explain why DMA is the platform that professional traders use then you are not ready to understand.

 

[Chorlton]

IMO A few reasons that are immediately obvious to me as to why DMA is preferred.

1. When you trade using a Market Maker you are trading the MM's "interpretation" of the underlying price so things like spreads can vary a lot more
2. Normally they will profit from their clients positions due to the way they hedge their own positions, so its not in their interest for you to make money. Read into that what you will..............

There's plenty of info on the net about both DMA Brokers and Market Makers. I would encourage you to research it.

 

[raysor]

it's still not as simple as it seems. I dealt today in 16000 Max Property, The order book was showing 115.5-117 5000
115 -120 5000

For some reason I just knew the 5000 offer would reload but my dealer decided to deal with an MM at 19.5 You can see see 4x5000 trades just after all at 17! C'est la vie. Probably if I had taken out the 5000 at 117 there wouldn't have been anymore. A short while after you could have bought for 14 or 15

 

[disi]

IMO A few reasons that are immediately obvious to me as to why DMA is preferred.

1. When you trade using a Market Maker you are trading the MM's "interpretation" of the underlying price so things like spreads can vary a lot more
2. Normally they will profit from their clients positions due to the way they hedge their own positions, so its not in their interest for you to make money. Read into that what you will..............

There's plenty of info on the net about both DMA Brokers and Market Makers. I would encourage you to research it.

This is commonly repeated 'opinion' but I have never seen any research that clearly shows that traders using DMA get better results than traders using MM.

I trade on forex mostly but here also we have MM and STP. I traded on both and I prefer MM. The only real difference was the fact that using STP I was getting enormous slippage. My STOP/LIMIT orders could not be 'guaranteed' etc. So I really see no extra benefit - and I am in my 9th year on forex.