# DMA or MM?



## andrew100 (8 January 2010)

Hi,

I am currently with a MM broker and so to reach my take profit limit I will either have to add in the spread (which makes it harder to reach) or reduce my take profit limit. 

I am considering going to a DMA broker which I think just charge you a fee for entry and exit, is this correct? is this a good idea? will there be reduction in liquidity? require more margins? are there any other points I should consider before making the decision?

Are there any recommended DMA broker? what is everyone using MM or DMA?

Regards,

Andrew100


----------



## Timmy (8 January 2010)

There should be no extra charge for the placing of orders as you describe - just the standard commission fee.  

The liquidity offered by a DMA broker is the liquidity in the ASX market at the time.  A MM provider is free to offer whatever liquidity it wishes, so there _may _well be a reduction in liquidity compared to a MM provider from time-to-time.

More margins? - the DMA provider will provide a current list of margin required before you sign up so you can check this out.

Other points - level of service offered, recommendations, counterparty risk (only saying this for good form, shouldn't be a problem in Australia with a reputable firm), ease of use of software, extra software provided (charts etc.).  I used ManFin and had no problems with them.

Hopefully you will get some other input on these questions to help you along the way.


----------



## Wysiwyg (8 January 2010)

Monthly real-time-data fees or waivered after x number of trades.


----------



## skc (8 January 2010)

andrew100 said:


> Hi,
> 
> I am currently with a MM broker and so to reach my take profit limit I will either have to add in the spread (which makes it harder to reach) or reduce my take profit limit.
> 
> ...




A lot depends on your trading style. If you trade penny stocks then MM would be a joke given the spread. If you don't mind sitting in the queue waiting to be hit then DMA is the way to go.

I would suggest you give IG market a try. They run both MM and DMA model on their web based platform. Same fees, same margin, big enough reputation, good bells and whistles.

Only down side is they only provide 5 levels of market depth. Good for some stocks. Not enough for many others.


----------

