Deployment modes in WebLogic server determines how deployment files are made available to target servers that must deploy an application or standalone module. WebLogic Server provides three different options for staging files:
stage mode, nostage mode, and external stage mode, following explains when to use which deployment mode:
Stage mode:
    Deploying small or moderate-sized applications to multiple WebLogic Server instances.
  1. Deploying small or moderate-sized applications to a cluster.
 Nostage mode:
 Deploying to a single-server domain.
  1. Deploying to a cluster on a multi-homed machine.
  2. Deploying very large applications to multiple targets or to a cluster where deployment files are available on a shared directory.
  3. Deploying exploded archive directories that you want to periodically redeploy after changing content.
  4. Deployments that require dynamic update of selected Deployment Descriptors via the Administration Console.
 External stage mode:
    Deployments where you want to manually control the distribution of deployment files to target servers.
  1. Deploying to domains where third-party applications or scripts manage the copying of deployment files to the correct staging directories.
  2. Deployments that do not require dynamic update of selected Deployment Descriptors via the Administration Console (not supported in external_stage mode).
  Deployments that do not require partial redeployment of application components.