"What is the difference between the DMA and ECN models?"
"There are many similarities between the two models in terms of pricing. Both provide clients with access to the interbank market which creates tight pricing with depth of book transparency. In a typical anonymous ECN model, the individual client must have secured their own credit line from a traditional Prime Broker or Prime of Prime provider in order to participate in the ECN. With FOREX.com’s DMA model, we leverage our existing Prime Brokerage relationships to provide customers with access to trade on prices sourced directly from our liquidity providers."
How does DMA work?
"Our DMA service allows you to trade on underlying market prices and depth, but what you’ll actually receive on placing a trade is a CFD from us. It works like this:
DMA displays the best bid and offer price available for a particular market, plus further prices on either side of the order book You place an order, and we instantaneously conduct a margin check to ensure you have sufficient funds to cover the margin on your proposed trade If the margin check is satisfied we place an order in the market and, at the same time, create a parallel CFD between you and us So while you’re trading at market prices, you won’t gain any ownership rights over the equities or currencies that form the subject of your CFD."
"STP stands for Straight-Through-Processing, which means when you place an order with IMMFX we will simply pass this trade to one of our liquidity providers. These liquidity providers are the largest banks in the world, have deeper liquidity and they are ultimate counter party to your trades.
As an STP brokerage firm we make a profit by marking up the spread. This means that the more trades you make the more money IMMFX makes, which creates a win-win situation for both IMMFX and its clients."