Direct Market Access, or DMA, is a type of CFD that is incredibly popular among day traders. Using this type of CFD, you will find that instructions are actioned immediately without the dealer intervening at all. This means that the orders are filled without there being any re-quotes. A re-quote is when you have elected to by at a certain figure, but your broker has become involved and said that the price you want is not available, but it is available at a slightly higher amount. If you’re running DMA CFDs using the WebIress feed, and you could see that there was volume available, there would be no problem at all getting your price.
Having Direct Market Access means that traders can join bid/offer queues, as well as the markets open and closing auction phases. When dealing using a DMA broker you will never get any re-quotes, as you’re dealing within the liquidity of the local exchange. So when you go to buy stock at the price you want, and the volume is available, then that is the price you are going to pay So really the Direct Market Access CFDs have all the advantages that you would expect when you trade in conventional securities, along with the leverage you get with margin trading.
Traders that use DMA are often regarded as the ones responsible for setting the market prices. They seemingly have an influence over the prices, because the exchange reacts to any orders that are made by DMA traders. This can also affect the share prices on which the CFD is based .
Other advantages that this style of trading has over traders that use a market maker, include that they can enter trades when they are at their most favorable, But there is a disadvantage, using this method if you do not keep your eye on the ball, that is that it is not possible to guarantee stop loss orders. The more experienced traders get around this problem by using options to manage any exposure they may have
If you want to trade in anything other than stock, then DMA trading is not for you. To be able to trade in the forex or commodities markets, for instance, you still have to use a market maker. You will also find that DMA providers cannot compete with the number of different products that are available from market makers. However, they are the best option for traders who prefer managing their own trades.
Even if you are using DMA access to trade, for a small fee you can still receive exchange market data. This allows you access to real time quotes. It also lets you monitor how many traders are operating at all of the different price levels.
The CFDs that use the Direct Market Access model are ideal for those who are day traders. These traders need the ability to make frequent deals, so as to take advantage of small price fluctuations extremely quickly. Their orders, to be effective, need to be executed speedily, without the handicap that re-quotes would give.
There are a few platforms that allow the trading of DMA share CFDs, one being the webiress trading platform. This platform allows traders to operate in the market depth of the CFD they are trading within.
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