ECN/STP whats the difference?

[Scotty2Cues]

Whats the difference between ECN and STP brokers?


Anyone have experience with any of the following uk brokers

1)fx financial group (they seem to spell spread as spred and margin as marjin)

2)fxcm

3)ODL

4)forex ltd

5) CFH markets

Thanks!

 

[GammaJammer]

there's a fair bit of info on this topic already. Busy day today scotty and I doubt the more informed members have time to re-type stuff thats already been said. Better of searching the forum for references to ecn. Beware though - a lot of uninformed comment out there too.

 

[Scotty2Cues]

there's a fair bit of info on this topic already. Busy day today scotty and I doubt the more informed members have time to re-type stuff thats already been said. Better of searching the forum for references to ecn. Beware though - a lot of uninformed comment out there too.

ok thanks.

Ive read lots but get lots of conflicting views, to the point where some brokers that claim to be stp are actually DD etc. The only one that I can find that seems really decent is dukascopy
I also see brokers that claim to be ecn with the mt4 platform but then read mt4 cant be used with ecn

 

[moe]

scroll down towards the bottom of this page it will tell you the difference.

http://www.100forexbrokers.com/stp-ecn-brokers

 

[Scotty2Cues]

scroll down towards the bottom of this page it will tell you the difference.

http://www.100forexbrokers.com/stp-ecn-brokers

thanks
so not much in it between ecn and stp.

 

[moe]

just a little difference, as you can see how they describe it

 

[GammaJammer]

Can I make a polite suggestion. I reckon your best bet is to start from a more basic standpoint and ask yourself what you actually NEED from your liquidity provider, whoever it may be.

The lines between what is an ecn and what isn't are pretty blurred these days and there are a lot of 'downstream' business models calling themselves one thing but delivering another.

So ignore it all, and don't get hung up on their descriptions. Work out what it is precisely that woul need them to deliver and proceed accordingly. What it's actually called is not important.

GJ

 

[Scotty2Cues]

Can I make a polite suggestion. I reckon your best bet is to start from a more basic standpoint and ask yourself what you actually NEED from your liquidity provider, whoever it may be.

The lines between what is an ecn and what isn't are pretty blurred these days and there are a lot of 'downstream' business models calling themselves one thing but delivering another.

So ignore it all, and don't get hung up on their descriptions. Work out what it is precisely that woul need them to deliver and proceed accordingly. What it's actually called is not important.

GJ

yeah thanks, thats what was bugging me. I read certain brokers are stp/ecn then read somewhere else that technically they are not. I know I dont want a DD which most of th uk ones seem to be except fxcm. Dukascopy looks very nice!

 

[Jack_Larkin]

mm.. do keep in mind that in some areas of the world, regulators won't let a broker work both the ECN business and brokering business at the same time (controlling the ECN itself as a business between LPs and managing order flow, vs sending order flow and holding client funds on the broker end.)

This is why MB Trading's marketing team had to rename all their 'ECN' accounts to 'EXN'.. after the CFTC jumped down their throat about it.



A lot of brokers use ECN in their marketing buzz, but they are really STPs... Though, they aren't exactly wrong in calling it "ECN" trading since the transactions are processed over an ECN. This is just a gray area where marketing is bending the terms a little.

 

[Jack_Larkin]

In your opinion, what is the best ECN broker. I personally am a fan of Dukascopy.

True ECN Forex Brokers

How many real ECN brokers that offer accounts to retail traders are there, Duklascopy, Deltastock and who else?

Let's be very clear here:

An ECN broker (not the ECN itself) is a broker who facilitates the participation of trading on an ECN. Not just passing order flow to the ECN, but clients directly interact with the ECN and can set price (best bid/offer) and impact liquidity without broker intervention.

Dukas kinda does this, but they do have limits on how retail order flow is professed through to their ECN (SWFX).. For instance, your order doesn't get posted to the other traders and is only executed once the market price moves through your limit order price... and last I checked, they don't have any other brokers who are participating on their ECN outside of a few white labels so it's really just down to Dukas to direct order flow...

This kinda puts Dukas as an "ECN" with their foot in the STP category. Not that there's anything wrong with that, since calling Dukas an "ECN" isn't technically wrong, it just depends on how picky you are with your definition of ECN.

For me, an ECN broker would be more like any broker that offers Currenex access account. The ECN itself is Currenex (not owned by the broker), and the broker just enables you to participate on it. Many brokers offer Currenex as well, so no single broker has control of order flow.

Once again, the difference isn't a bad thing, it really just comes down to "technicalities" and marketing. I personally trade with a market maker and an STP who also labels themselves as an ECN, and I'm quite happy with both.

 

[SaraRose]

There are many ECN brokers out there. However, unfortunately, many brokers advertise their brand as ECN but the truth is far from that and they are not really ECN. I recommend you try the demo of reliable ecn brokers such as sunbirdfx or Alpari so you will know what you should look for.

 

[mikedavid00]

In my opinion, it doesn't matter if your broker is STP or ECN because in both cases you can be sure that their is no conflict of interest

Lol very debatable.

 

[mikedavid00]

Let's be very clear here:
For me, an ECN broker would be more like any broker that offers Currenex access account. The ECN itself is Currenex (not owned by the broker), and the broker just enables you to participate on it. Many brokers offer Currenex as well, so no single broker has control of order flow.

Is there any easy way to get a Currenex only broker listing?

Also, can someone please explain what the below means from Currenex's website:

Currenex | Pre & Post Trade - Pre-Trade Processing

What are they basically trying to say above?