What Is STP Execution?

  • STP market execution stands for Straight Through Processing
  • It involves sending money of the traders directly to the market
  • STP is thought to be a hybrid of the ECN and dealing desk models
  • STP execution means directly connecting traders with liquidity providers

Understanding STP Forex Execution - How Does It Work?

Forex STP explained: STP execution model means sending orders directly to the market without passing through the dealing desk. stp execution ForexStraight Through Processing is a very popular model of execution, which involves sending the orders of the traders directly to the market without passing them through the dealing desk. This model of execution is very similar to ECN, where the positions are also directly sent to the liquidity providers and do not go through the dealing desk. STP execution brokers are known for a very high level of transparency. Although very similar, STP is not an alternative to ECN. ECNs are known to be a purely non-dealing desk, while STP is more of a hybrid. All of the orders made with STP Forex execution directly go to the liquidity providers, without passing through the dealing desk. While there are many similarities between ECN and STP trade execution, there also are many differences. For example, STP has lower commissions, especially compared to the high commissions mainly associated with ECN. A huge advantage of this type of execution is that it is a fully automated process and is done through electronic transfers. Because there is no need for manual intervention, the time needed for the processing of the transaction is reduced a lot.

What Did We Learn From This STP Forex Trading Article?

STP execution Forex directly sends the orders of traders to the liquidity providers, such as banks. STP execution is a fully automated process done through electronic transfers with no manual intervention. There are no intermediaries involved in the whole process as the orders of the traders do not pass the dealing desk. STP is known to speed up transactions and reduce the time that is needed to process the transactions.

Common Questions On STP Trade Execution

What Does STP Mean In Trading?

STP stands for the straight-through processing and means that all of the orders made by traders are directly sent to the liquidity providers without the need for them to go through the dealing desk. There are many advantages associated with it, one of the biggest being the reduced time of transactions.

Which Is Best Between ECN And STP?

It is very hard to say which one is best because they have many similarities. Both of them operate as the NDD, meaning No Dealing Desk, which means that the orders are forwarded to the interbank market without being processed by the dealing desk. The main difference between these two is that STP trades are forwarded directly to liquidity providers, while ECN trades form inner liquidity between the members of the network.

What Is STP Account Type?

STP account type is offered by many brokers around the world. While there are some brokers that only work with STP execution, there are others who offer other types of execution as well. These brokers have a special account created for investors who want to trade using STP execution.