ECN / STP Broker Comparison 2022
What is a ECN Broker?
ECN means Electronic Communication Network. In this way, the broker's customers or other partners are in
integrated into a liquidity network. This network includes other investors, banks, brokers or other networks. All orders are placed in an order book. That
Order book can be checked and viewed. Course formation takes place through supply and demand. A key feature of an ECN broker is that he
thus making no profit on the spread. Often the spread is at 0 pips. An ECN broker makes profits through commissions. A disadvantage of ECN brokers is that in the
Unlike market makers, the minimum deposit is usually higher.
CFDs are complex instruments and come with a high risk of losing money quickly because of leverage. Between 74% and 89% of retail investor accounts
Lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk
losing your money.
The best ECN / STP Brokers
What is a STP Broker ?
STP stands for Straight through Processing, which means direct transmission. As with an ECN broker, orders are passed directly to the liquidity network
and there is no dealing desk in between. In the best case, it can even happen that several banks compete for an order. To opposite of a market maker
In order to remain at an advantage, the liquidity pool should be as large as possible so that prices are not formed by just one or a few banks. A difference to the ECN broker is,
that private traders can also belong to the liquidity pool.
Difference ECN- STP Broker / Market Maker
In contrast to an ECN/STP broker, the courses are generated via an internal dealing desk. The main difference with these is that a market maker generates the prices themselves
brokers. The spreads are usually lower with an ECN/STP broker than with a market maker. Sometimes an additional order fee is charged. However, ECP/STP
Broker more suitable for the experienced trader. All customer orders are executed internally by market makers. To find an imbalance (buy or sell orders) on the real
A market maker can hedge against balancing the market. In the worst case, a conflict can arise between the customer and the broker. The customer's profits would be
then the broker's losses, and vice versa.
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