DMA FAQs: Execution
10) How will my stop and limit orders get filled?
Orders placed via the DMA trade ticket will be immediately passed to our liquidity providers (in FOREX.com’s name) where they will add to the liquidity in the pool. The limits and stops effectively become bids/offers for other participants in the liquidity pool to interact with.
Orders placed via the standard trade ticket on the Advanced Trading Platform and the mobile and web platforms will be top-of-book and will only be sent to the liquidity pool as a market order when the order is triggered.
11) How will liquidations be executed?
You are responsible for monitoring your account and maintaining 100% of required margin at all times to support your open positions.
If at any point, the equity available drops below 100% of the margin required you will be subject to auto liquidation of the position incurring the largest loss. The liquidation process is as follows: the net aggregated open position with the greatest unrealized loss is closed first, followed by the next largest losing position and so on, until the maintenance margin requirement is satisfied or exceeded. Depending on the size and unrealized P&L of the open positions, all open positions may be liquidated in order to meet the margin requirement.
In the event of a liquidation, the trade is executed in the market directly with the liquidity provider and then passed down to the client.
When your account falls below 120% margin, a margin alert will automatically be sent to you via email. This notification is for your convenience and should not be relied on to protect your account.
While our 100% margin requirement and real-time margin system is designed to limit your trading losses and help ensure that total losses never exceed your total account balance, you do risk incurring losses greater than your account balance, especially during periods of extreme market volatility. For this reason, we strongly encourage you to manage your use of leverage carefully. Increasing leverage increases risk.
12) Who is the counter party on trades with a DMA account?
FOREX.com acts as the principal and counterparty to the trade.
Here’s how Forex DMA execution works:
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a. The Forex DMA dealing ticket displays the best bid and offer price available for a particular market as well as the additional prices available on either side of the order book.
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b. Client places an order on the DMA pricing and FOREX.com instantaneously conducts a margin check to ensure the client has sufficient funds to cover the margin required for the proposed trade.
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c. If the margin check is satisfied, FOREX.com places an order in to the market in FOREX.com’s name at the client’s chosen price.
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d. When the order is executed in the market, we fill the client’s order at the exact same price without a mark-up and book into their FOREX.com trading account.
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e. Therefore, while the client is trading on transparent DMA pricing provided directly from top-tier global banks and liquidity providers, FOREX.com remains as the principal and counterparty to the trade.
13) Are there any differences from the market maker model in executions and fills?
Yes, when you trade on market maker model:
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Client places an order after seeing FOREX.com’s tradable bid/ask spread
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FOREX.com executes the order
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We confirm the execution to you
FOREX.com is directly accountable for pricing and execution quality and customer orders are filled directly by FOREX.com.
When you trade on DMA:
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The Forex DMA dealing ticket displays the best bid and offer price available for a particular market as well as the additional prices available on either side of the order book.
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Client places an order on the DMA pricing and FOREX.com instantaneously conducts a margin check to ensure the client has sufficient funds to cover the margin required for the proposed trade.
-
If the margin check is satisfied, FOREX.com places an order in to the market in FOREX.com’s name at the client’s chosen price.
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When the order is executed in the market, we fill the client’s order at the exact same price without a mark-up and book into their FOREX.com trading account.
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Therefore, while the client is trading on transparent DMA pricing provided directly from top-tier global banks and liquidity providers, FOREX.com remains as the principal and counterparty to the trade.
With DMA, FOREX.com is placing an order on behalf of the client and passing along the fill received directly to the client, there is the possibility of order rejections and partial fills.
14) What is the difference between DMA and ECN model?
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. 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 FOREX.com’s DMA model, we leverage our existing Prime Brokerage relationships to provide customers with access to trade on prices sourced directly from our liquidity providers.
15) Can clients request execution data the same way as market maker model?
Yes.
16) Will I have access to historical data?
Clients will have access to historical data in the same manner that retail clients do today.
17) What recourse do I have if my stop or limit order is not filled?
Our ability to fill your trade is contingent on the order being executed with our liquidity provider(s). When you trade on our DMA service, your orders are passed directly to our liquidity providers with FOREX.com acting as counterparty to your trade. A lack of available liquidity from FOREX.com’s liquidity providers may result in your order not being filled at any price.
We will display currently available pricing for the contracts offered under the DMA Service. The actual execution price achieved in the market with our liquidity provider is passed on to you at the same price with FOREX.com acting as counterparty to your trade. There may be instances when the prices may differ from the pricing displayed.
