DMA Forex brokers, a brokerage that is where its customers (Traders) it is possible to access to multiple liquiditor at once (to some big banks), with the purpose to get the level of execution and spreads fast and best prices, and including Non-broker Dealing Desk.
The following are characteristics of DMA broker, namely :
- Spread using the spread fluctuates (variable spreads) and not Fixed.
- Spread can expand and shrink depending on the actual Market + mark up the spread under 1 point to corporate profits (quite fair and transparent)
- Usually use 6 digit numbers (5 decimal for currency Direct, and 3 decimal for currency Indirect). Commonly called with 5 digits. But there are also brokers who still use DMA price 5-digit (4 and 2 points behind the comma)
- Using Market Order Execution (there is also an Instant, because their type Hybrid DMA)
- Usually Without The Commission
- Order really thrown into the market, which in this case is to some large banks that are already bound to a contract with the broker
- Order entry based on the availability of the real volume of the market (liquiditor), and not the result of hedging the dealer
- A definite order execution speed is fast and very rarely requote (except when interrupted by user's own internet connection)
Forex brokers-DMA does not benefit from the results of loss or defeat its customers as well as the broker of the same Airport or Bucket Shop, but this pure DMA Broker Companies benefit only from the difference between the Bid Ask spread is just (typically mark-up if the spread is very small and below the range of 1 point for profit corporations).
How to find out the original DMA broker is studying the regulation of them. The regulation is such as to their legality, and if their dubious legality/regulation, or not clear, or listed somewhere remote, as well as foreign/not registered as broker that properly, then we recommend that you AVOID the broker if you want to trade seriously, because it is most likely what is mentioned in the broker is not true or fabricated.
But if they are properly regulated in the regulation of that right is not government-owned Offshore, then they shouldn't be trusted. (especially the ones listed in the category or categories of brokers in FCM in the CFTC/NFA, FSA, ASIC).
And avoid brokers that allow 3rd party transfer 3, Local media or with Transfer e-currency that is illegal, such as Liberty Reserve (LR), E-Gold and the like (except paypal, moneybooker, neteller), because of the a broker like that certainly will not be properly regulated in the Government regulatory agency Onshore.
LR and E-Gold is not regulated like Paypal or Moneybooker. And they LR or E-Gold is headquartered in a country that is free/offshore, so there is no guarantee the security there.
A credible regulatory body (Government-owned) home to the Forex broker activities, namely: the CFTC, NFA (category of FCM), FSA (category a broker), ASIC.
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