Why Professional Forex Traders Choose IC Markets Metatrader

By in Intro to Forex on December 31, 2015

There are allot of Metatrader brokers in Australia and as a true forex junkie I have trading accounts with virtually all of them. Over the past 10 years I’ve learned allot about forex brokers, one of the most important things that I’ve learned is that when deciding on a forex provider it is advisable to ask whether or not they are an STP (straight though processing) provider or a DMA (direct market access) broker. Most newbie traders get caught up in the marketing hype of no-dealing desk or STP when actually there is not much difference between them they’re both as bad as each other.


If you’re dealing in micro lots in reality you probably won’t detect the difference between an STP provider and a DMA provider, so the choice is really yours, any of the Metatrader brokers in Australia will probably do just fine. It’s only when you begin earning profits or trading greater lot sizes that you’re going to start to note the differences between an STP and DMA provider, this is where I found IC Markets Metatrader 4 to outperform the platforms of all of the other forex providers in Australia. To put it in simple terms when you’re trading with a DMA broker you are actually trading in the interbank market as all your trades are passed onto one of several top tier investment banks, however, when dealing with an STP broker your trades are aggregated with other client trades and hedged at the discretion of the broker. As STP brokers do not want large positions on their dealing book they slow down execution or refuse the order, something most professional traders simply will not tolerate, it is for this reason they choose a DMA forex provider like IC Markets.

Now that you know how STP and DMA forex providers execute your orders you must also be aware of how STP and DMA providers make their money. STP providers make their money by capturing the full spread of the foreign exchange pair they quote, often they also make money by holding the other side of the aggregated total of client positions, however if risk isn’t handled properly they can also lose money if clients make money. DMA forex providers on the other hand take on a far more conservative approach, they pass on the natural market spread which is often tighter than the spread quoted by STP brokers and charge a commission per million traded, DMA brokers don’t make money from holding the other side of customer positions nor do they profit from the spread. When adding the natural market spread and commission charged by DMA forex providers together still works out cheaper to trade with a DMA forex broker than pay the full spread STP providers quote plus you receive the advantage of interbank prices.

So are there any reasons to trade with and STP broker, well NO. Where possible at all times choose a DMA forex broker as you’ll be sure to receive the very best execution possible and transparent interbank pricing. Naturally there will always be some people that choose and STP forex provider however most of the time once they become profitable or start trading actively they switch to a DMA broker.


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