💼 ECN Forex Brokers 

An ECN Forex Broker is a broker that uses an Electronic Communication Network (ECN) to give clients direct access to the orders of major participants in the global currency market.

 

What is Actually an ECN Forex Broker?

• ECN stands for Electronic Communication Network.

• ECN brokers provide traders with direct market access (DMA) to the Forex market.

• Unlike Market Makers or Dealing Desk brokers, ECN brokers have no dealing desk — they do not take the opposite side of client trades.

• Instead, all client orders are routed directly to liquidity providers, which are usually major commercial banks or financial institutions.

Two Main Types of ECN Brokers

There are two main categories of ECN brokers:

(1) Retail ECN brokers

(2) Institutional ECN brokers

Institutional ECN brokers offer better trading conditions than retail ECN brokers. Institutional clients include banks, hedge funds, large importers/exporters, and others.

Read more: What is an ECN Forex Broker

💼 What is an STP Forex Broker

 An STP Forex broker sends its clients’ orders directly to liquidity providers—such as banks, without any manipulation.

 

Definition of STP Order Execution

STP stands for Straight Through Processing, a technique that optimizes the speed of order processing and execution by allowing automatic, same-day settlement of trades without manual intervention.

 

What is an STP Forex Broker?

An STP broker uses Straight Through Processing as its main order execution model. This means the broker sends clients’ orders directly to liquidity providers—such as banks, investment firms, hedge funds, or other Forex brokers—without intervention by a dealing desk.

STP brokers sit between Dealing Desk brokers (Market Makers) and pure ECN brokers in terms of execution style.

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STP Broker Quotes

STP brokers display quotes that closely track actual ECN interbank quotes. The connection between an STP broker and its liquidity providers relies on complex algorithms that analyze each order’s nature and execute it instantly.

Read more: What is an STP Forex Broker