What is an STP Forex Broker

Market Makers Forex Brokers

💼 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.

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.

 

 

Trading Costs with STP Brokers

Like ECN brokers, STP brokers have access to multiple liquidity providers and can offer tight spreads.

They make profits mainly from:

  1. The spread between ask and bid prices (typically EUR/USD spreads between 1.1 and 1.9 pips without commissions).

  2. Some may charge commissions, but most earn only from the spread.

 

Advantages of Trading with an STP Forex Broker

STP brokers combine many benefits of ECN and Market Maker brokers:

  1. Fast order execution without delays (like ECN brokers).

  2. Tight spreads especially for major pairs like EUR/USD, GBP/USD, USD/JPY (like ECN brokers).

  3. Normal SWAP charges on overnight positions, favorable for long-term trading (like ECN brokers).

  4. Wide choice of trading platforms supporting automated trading, scalping, and hedging (like ECN brokers).

  5. No dealing desk, so no conflict of interest and increased transparency (like ECN brokers).

  6. Low minimum account requirements, often starting at $100 (like Market Makers).

  7. Welcome bonus promotions, usually credit bonuses (like Market Makers).

  8. Anonymity of trading, as there is no dealing desk monitoring orders — execution is automatic and anonymous through liquidity networks (like ECN brokers).

 

Final Thoughts

  • STP brokers are ideal for semi-advanced and advanced traders.

  • Beginners may prefer Market Makers for simplicity.

  • Professionals often choose pure ECN brokers for raw market access.

STP brokers offer a balanced mix of fast execution, narrow spreads, advanced technology, low minimum deposits, and promotional bonuses—without the conflict of interest present in Market Makers. This flexibility explains why STP has become a popular and successful model in Forex trading today.

🔗 More: » Compare STP Forex Brokers

 

◙ What is an STP Forex Broker?

What-is-Forex.com (c)

Pin It