⭐ ECN vs STP Forex Brokers


ECN and STP Forex brokers: what is the difference?

ECN STP
VS
NDD + STP + DMA + DMT + ECN pricing NDD + STP
ECN (Electronic Communication Network)
NDD - No Dealing Desk
STP - Straight Through Processing
DMA - Direct Market Access to the Top-tier liquidity
DMT - Direct Market Trading within ECN liquidity pools
ECN pricing - ECN bid/ask quotes
STP (Straight Through Processing)
NDD - No Dealing Desk
STP - Straight Through Processing
ECN is a Network STP is the method of processing orders
Top-tier liquidity network, trading is done inside the network
Orders are passed straight through to a specific liquidity provider (LP), execution is done at the LP's side
ECN broker is an Agent STP broker is an Agent
ECN brokers don't fill client orders, all orders are passed to the ECN liquidity pool, where ECN participants become counterparties to clients' trades
STP brokers don't fill client orders either, all orders are passed to another liquidity provider, who executes the order and becomes a counterparty
Multiple Top-tier liquidity providers Few or a Single liquidity provider
Unlimited number of Top-tier 1-3 liquidity providers - ECN participants
A few liquidity providers, but oftentimes just 1 Brokerage company to whom all orders are sent for execution. This company can also be a sister company of the STP broker
Raw ECN pricing Single broker pricing
Raw market prices currently traded on ECN
Orders are executed at Market Maker prices
Strictly professional clients Available to retail & professional clients
High requirements towards experience level and capital
No requirements towards experience level or capital
Highest deposit requirement Lowest deposit requirement
Average minimum deposit is $50,000 (but no less than $10,000 USD)
STP accounts start from $1 USD
Leverage less than 1 : 100 High leverage
Due to the nature of ECN trading, leverage above 1 : 100 is unsustainable
No leverage limits, can go as high as 1 : 3000
Minimum trade size from 0.1 standard lot Minimum trade size from 0.001 standard lot
ECN brokers don't offer micro lots. The 0.1 minimum lot size cap is the requirement set by liquidity providers
STP brokers are able to offer lowest minimum lot size
Maximum trade size unlimited Maximum trade size is capped
No limits on trade size and volume
Limits set depending on the processing capacity of a final destination broker (LP)
Low commission No commission
Low commission, goes even lower with higher trading volume
STP brokers don't charge commission
Floating spreads Floating or fixed spreads
Only floating spreads
Spread type depends on the Market Maker executing orders, can be fixed or floating
Trade inside the spread no
Traders can place orders between the highest Bid and the lowest Ask price, e.g. become "price makers"
Trading on given spreads only, e.g. "price taking"
Trade against other traders no
Traders can trade against other traders, market makers or anyone else in the ECN network
no
Unlimited access to Market Depth (DOM) No access to Market Depth (DOM)
Traders can see true ECN liquidity
DOM is not available

ECN brokers are not well comparable to STP due to a huge difference in ways these brokers operate.

ECN would be a top choice for Professional clients, while STP can be a starter choice for anyone.

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