10 Best and Trusted STP Forex Brokers

STP Forex Brokers

Straight Through Processing (STP) is a brokerage model that involves sending client orders directly to the market without passing them through a dealing desk. STP brokers promise to offer a highly transparent trading environment that is free of conflict of interest with its clients. Choosing the best STP Forex broker is crucial for a profitable and successful trading experience. In this article, we will look at 7 critical factors to consider when choosing the best STP Forex Brokers

1. Regulation

The regulation of an STP Forex broker is often overlooked in the initial stages of choosing a broker. When an STP broker is unregulated, it means that no one is monitoring their business, and in the event of a problem, getting your money back can be a hassle. That is why we recommend that you choose an STP broker that is regulated to ensure that they are adequately capitalized, your funds are kept safe and they maintain fair dealing practices so that your trades are effected at the prevailing market prices.

Top Regulated STP Forex Brokers

BrokerInfoBonusOpen Account
HYCM Logo Min Deposit: $100
Spread: From 0,2 Pips
Leverage: 1:200
Regulation: FCA UK (#186171), CySEC (#259/14), CIMA (1442313) and DFSA (F000048)
10% Welcome Bonus up to $5,000Visit Broker
FBS Markets Inc forex broker Min Deposit: $1
Spread: From 0 Pips
Leverage: 3000:1
Regulation: CySEC, IFSC
$100 No-Deposit Bonus, 100% Deposit Bonus, Lucky T-shirt, iPhone 6s PlusVisit Broker
OCTAFX forex broker Min Deposit: $5
Spread: From 0.2 Pips
Leverage: 500:1
Regulation: FSA (Saint Vincent and the Grenadines), FCA UK (#679306)
50% Deposit Bonus, Real contest 1st prize Luxury car BMW X5 M, Copy trading, Trade&Win.Visit Broker
xm best forex broker Min Deposit: $5
Spread: From 0 Pips
Leverage: 500:1
Regulation: ASIC, CySEC, FCA (UK), IFSC Belize
“50% +20% deposit bonus up to $5,000, Loyalty Program BonusVisit Broker
exness forex broker review Min Deposit: $1
Spread: From 0 Pips
Leverage: 2000:1
Regulation: FCA UK, CySEC, FSP, BaFin, CRFIN
35% of the account DepositVisit Broker
Forex.com Gain Capital review USA Min Deposit: $50
Spread: Starting 0 Pips
Leverage: up to 400:1
Regulation: FCA UK, NFA, CFTC, ASIC, IIROC, FSA, CIMA
Visit Broker
No Deposit Bonus Instaforex Broker Min Deposit: $1
Spread: Fixed Spread From 3 Pips
Leverage: Up to 1:1000
Regulation: CBR, CySEC and FFMS
30% Forex Deposit bonusVisit Broker
City Index forex broker Min Deposit: $100
Spread: Starting 0 Pips
Leverage: up to 500:1
Regulation: FCA UK, ASIC Australia, MAS Singapore
Visit Broker
etoro best forex broker USA Min Deposit: $200
Spread: From 3 Pips
Leverage: 400:1
Regulation: NFA, FCA, CySec
Visit Broker
FXOpen ECN Broker Min Deposit: $300
Spread: floating, from 0 pips
Leverage: 500:1
Regulation: FCA UK reference number 579202
Visit Broker

2. Capitalization

This point closely ties with regulation. You want to trade with an STP broker who is well-capitalized. This majorly depends on the country where the broker is regulated. Bucket shop STP brokers that are based in an unregulated country, simply means they are not monitored or regulated and are highly likely to be undercapitalized. Make sure to check whether the broker has published this information.

3. Data Security

When opening an account with an STP Forex broker, you transmit a lot of personal and financial data. The broker will often need copies of your passport, utility bills, bank account information and credit card numbers. Doing this over poor internet security practices can lead to your personal data being stolen, your trading activities disrupted and even being put at risk for identity theft. Hence, you want to make sure your broker employs reputable internet security.

4. Segregation of Funds

The business of Forex trading, especially when ordering directly in a highly changing market, is risky trade. And although you understand and agree to the risks of winning or losing big, you do not want to expose yourself to any avoidable risks. You want to look for an STP Forex broker that offers segregation of funds. This assures you that your funds are safe and that the brokerage firm will not have full access to your funds.
The depth of their liquidity pool

Unlike ECN (Electronic Communication Network) brokers who send their orders to predetermined ECN liquidity pools that contain large numbers of liquidity providers (LPs), STP brokers create their own liquidity pool. This consists of a smaller number of LPs that have signed a contract to do business with the STP broker. The available liquidity providers compete to offer the best ask/bid rates for all orders brought to them by the STP broker.

Why it matters ?

The more LPs there are in a system, the deeper the trading pool, which is crucial for healthy STP Forex Trading. If an STP broker is only dealing with a single liquidity provider, it automatically means there is no competition among Liquid Providers (LPs). This will be equivalent to just adding an extra broker into the trading. That is why it is crucial that when you are choosing an STP Forex broker, you make sure to confirm the number of LPs available in their pool and its depth. The more LPs, the deeper the liquidity, better ask and bid quotes, which result in lower spreads.

5. Type of Spread

Spreads are a broker’s primary source of compensation. Today, STP brokers offer both fixed and variable spreads. It is crucial that you understand these two different types of spread and how each one affects their trading.

Variable spreads

A variable STP broker works in the same way as the ECN model, but in its own internal trading liquidity pool. All the liquidity providers in the pool compete to propose the best bid and ask price. This allows the STP broker to choose the best bidding price from one of the LP and the best asking price from a different one to deliver only the best current spreads to the client. The STP broker will include a small mark up, allowing them to earn some profit too.

Fixed Spreads

Unlike a variable STP broker, Fixed spread STP brokers do not adjust spreads for the client based on the highest bidding or asking price offered by the liquidity providers in their pool. Instead, the spreads remain fixed throughout.

Also Read : Lowest Fixed Spread Forex Brokers

Hence, if an STP broker only has 1 LP, they will act as the only counterparty to all the client’s trades. Therefore, the trader will be fully dependent on the LP, who will not only be responsible for deciding which price to quote but also when to quote it. If on the other hand, there are multiple liquidity providers but then the spreads of the trade remain fixed, the STP broker will use its own price matching engine that enables the broker to make profits on the spread difference. For this to be effective, the client will be charged a fixed spread that in essence is higher than the best rate the broker can obtain from the liquidity providers. The broker will earn their profit from the spread difference.

6. Type of Execution

In order for your trades to be filled at the best rates and in a timely manner, it is crucial that you find an STP broker with good trade execution.

Instant execution

This means that your order will not go to the market but instantly executed by your broker. The broker may or may not offset own risk with LP, making it a less transparent model.

Market Execution

This means that your order will pass through the market, where it will be filled based on the available order offered by the liquidity providers. This provides a more transparent model.

7. Customer service

One factor that is often overlooked when choosing an STP broker is whether you can reach them and speak to a real person when you need it most. Nothing is worse than experiencing, for instance, a technical problem with the platform while you are having an open position in the market. Therefore, ensure your broker offers reliable customer service. Most importantly, do your research online to find out other trader’s experiences with the broker.

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