ECN, you end up sending your trade to another broker or a big bank, again depending on the bank relationship with your Prime Broker, there is always counterparty risk. For a bank to collapse like LEHMAN for example is more rare than an unregulated broker!
It does not mean though that the market will move, because the LP might take trade and internalise it!
Broker/dealers though advertise ECN, but still do not offset in the market! most of them!
That has pros and cons; for example/
Pros, faster execution than real ECN, less slippage and trade acceptance rate.
Cons, counterparty risk i.e. a broker/dealer defaults and not pay, manipulation of trades and bigger slippage.
DMA on level 2, prices will not move a lot if the product is very liquid like Google for example or might not move at all. If people are looking to move markets then DMA. Also yes trustworthy brokers are the best.
Agreed!