Forex Brokers with Direct Market Access (DMA)

Richard Montana | November 1, 2022

If you are thinking about trading forex online, you will need an account with a forex broker. When it comes to choosing a broker, you will see that there are a few types of forex broker to choose from. This includes dealing desk (DD) brokers, non-dealing desk (NDD) brokers, STP brokers, ECN Brokers and direct market access (DMA) brokers. With forex direct market access (DMA), you can trade on the physical market, without the need for a middleman.

What is DMA forex broker?

DMA stands for Direct Market Access and is a type of FX execution that offers traders access to the physical market without any intermediaries between their trades and the forex market.

Traditionally, FX trading is conducted through a forex broker, who will request quotes from exchanges and market makers, and then present the best price to their client.

DMA displays the best bid and offer price available for a particular market, plus further prices on either side of the order book.

DMA forex brokers provide an excellent way for traders to gain access to the best possible rates when trading. This is made possible due to the fact that forex brokers with direct market access will usually have access to a wider range of global banks, funds and other types of liquidity providers that they can get quotes from to pass directly onto DMA account holders.

With direct market access, the trade is executed at the final market transaction phase by the brokerage firm. The order is accepted by the exchange for which the security trades and the transaction is recorded on the exchange’s order book. As such, traders can enjoy greater visibility of the market whilst interacting with financial market exchanges directly.

What are the advantages of a DMA forex broker?

  • Superior FX pricing
  • Tight spreads from 0.0 pips
  • Deeper liquidity pools
  • Faster execution speeds
  • More control over your trades
  • Extended data on currency pairs
  • Better transparency
  • No dealing desk interference

What are the disadvantages of a DMA forex broker?

  • Higher minimum deposits
  • Strict regulations
  • Restricted leverage
  • Do not always provide mini/micro lot accounts
  • Usually do not have fixed spread accounts
  • Prices are not necessarily better than OTC brokers
  • Cannot change or reverse the position after execution

DMA brokers vs market makers

A DMA forex broker makes money by bringing together assets to buyers and sellers. On the other hand, a market maker helps create a market for investors to buy or sell securities. Direct Market Access (DMA) guarantees that you are trading on real market prices and liquidity.

When a trader places a trade with a DMA broker, this is replicated in the underlying exchange before being offered to the speculator. Market Makers on the other hand offer a market that may differ from the underlying exchange. They can take the opposite side of your position which some believe leads to a conflict of interest.

DMA vs ECN brokers

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.

The main difference between ECN and DMA is that DMA brokers make individual contracts with each liquidity provider, while ECN brokers are connected to anonymous ECN networks where there are no direct contracts.

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 the DMA model, brokers can leverage existing Prime Brokerage relationships to provide customers with access to trade on prices sourced directly from liquidity providers.

Who are the best DMA forex brokers?

To start trading forex with DMA, you will need find a suitable forex DMA provider, and open a trading account with them. Below you can see a selection of our best DMA forex brokers based on thousands of broker reviews that we have done over the years.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.
IG Review

ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA

$250

1974

1:200

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
2.
IC Markets Review

ASIC, CySEC, FSA, SCB

$200

2007

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
3.
Pepperstone Review

ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB

$200

2010

1:400

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
4.
XM Group Review

ASIC, CySEC, DFSA, IFSC

$5

2009

1:888

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
5.
XTB Review

CySEC, DFSA, FCA, FSCA, IFSC

$1

2004

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
6.
Forex.com Review

ASIC, CIMA, CFTC, FCA, FSA, IIROC, JFSA, NFA, SFC

$100

2001

1:50

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
7.
Admirals Review

ASIC, CySEC, EFSA, FCA

$1

2001

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
8.
FP Markets Review

ASIC, CySEC, SVGFSA

$100

2005

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
9.
Interactive Brokers Review

ASIC, CFTC, FCA, IIROC, NFA, SFC

$1

1978

1:200

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
10.
Saxo Bank Review

ASIC, FCA, FINMA, JFSA, MAS, SFC

$500

1992

1:66

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Conclusion: should I trade with a DMA forex broker?

Yes, in my opinion there are many advantages when trading with a forex broker that gives you direct market access when compared to a market maker broker. You can get access to tighter spreads and faster execution speeds, whilst removing any potential conflict of interest with your broker.

About the Author

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Richard Montana
Richard has many years of experience in broker research, testing, analysis and reviews. He knows what to look for through years of trading himself with different brokers and listening to the feedback of others.

Review Methodology

For all of our broker reviews, we research, validate, analyse and compare what we deem to be the most important factors to consider when choosing a broker. This includes pros, cons and an overall rating based on our findings. We aim to help you find the best broker according to your own needs. You can read more about our review process.


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