Trading With ECN

Maybe many traders don’t know the difference between the STP and ECN VIX brokers are slightly different – both are non-dealing desk. STP stands for Straight Through Processing, while ECN is an Electronic Currency Network. In ECN, traders can jump directly into the real market. Here traders can meet directly with banks, governments, and other large institutions – without going through brokers again. The ECN broker that available at brings together sellers and buyers online and in real-time. They take a commission from spreads only. Meanwhile, the STP broker functions as a bridge to connect with other brokers as the liquidator. Here, the order execution will be conveyed to the ECN broker or large institution.

The advantage of an STP broker is that sometimes the STP broker has one or more liquidity providers. The more liquidity the provider is, the better it will be in fulfilling orders from traders. Because the STP (Straight Through Processing) system will find the most appropriate price for trader orders from banks that are liquidity providers. Meanwhile, ECN brokers have a commission. Pool system, meaning that orders at the ECN broker will be thrown into the market in a mixed way to get the best price. Not bound by a contract with a particular liquidator while STP brokers have no commissions. The STP broker throws the order only to one or two of its liquidators, which is usually to another, bigger broker, or to another ECN broker/liquidator such as a certain bank. Order execution speed, because it is based on a non-dealing desk, so it is perfect when the market is hectic.

So, what should a trader do to make sure what trading platform will be used for? Is it ECN, STP, or using Dealing Desk? Is the practice as promised? There is only one way, prove it by using a variety of trading tools and strategies. Is it possible to execute real-time real time especially when the market is hectic? Is the execution no requotes? Is there no limit pips and time when closing and placing pending orders, both stop and limit? And when compared to other broker platforms what about the slippage? It must be checked carefully. So make sure to get the best ECN brokers to help you in trading.

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