How Does STP Compare To ECN?

Source: Forex Bonuses 2020-05-18

STP and ECN have several similar characteristics, but some traders prefer STP in its pure form due to the lack of a commission per trade that is usually associated with ECN accounts. Most institutional traders open ECN accounts to enjoy tighter spreads at the cost of a commission per trade that is charged as a percentage of the traded lots. Scalpers are also known to trade with ECN conditions to get in and out of the markets as quickly as possible and enjoy tighter spreads for better market execution. However, some retail traders are more comfortable with the higher STP spreads rather than accounting for the commission for each trade. Therefore, if a commission-free trade is your priority, STP accounts can provide more advantages than ECN accounts.

When it comes to the speed of trade execution, ECN has the upper hand over regular STP accounts as traders are exposed to the actual liquidity available in the market. STP accounts may be bridged to larger brokers or exchange houses, which can result in slower trade execution times and a few re-quotes. ECN accounts have minimal instances of re-quotes, and it is guaranteed that a trader’s position will be filled at the strike price, even if it is a partial fulfillment of the order.

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How Does STP Compare To ECN?

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