The Difference Between STP and ECN
Types of Crypto Brokers: STP Brokers
Most bitcoin trader ask what is the difference between the STP & ECN?
STP Bitcoin Broker
STP has many liquidity providers, but chooses the best one at any one time automatically for the trader. Therefore when a trader places a bitcoin trade the cryptocurrency orders will be passed direct to this interbank network of liquidity providers - after the liquidity provider with the low spread is selected automatically by the STP execution model.
Therefore STP bitcoin broker is like ECN bitcoin broker the only difference is that the Straight Through Processing Brokers automatically chooses the best fill at that particular time of trade execution and does it automatically for the trader.
ECN Bitcoin Broker
ECN bitcoin broker has many liquidity providers from which a trader will see all at the same time and choose which liquidity provider to trade with, It is like having 10 bitcoin brokers bitcoin quotes to choose from which to trade - these ten quotes are for the same crypto instrument - each quote from a different liquidity provider.
The ECN broker quotes model means a trader will have to look at many streaming bitcoin quotes at the same time and select one, this streaming quote will have varying spreads markups & a trader selects the low spreads.
There is no much difference between ECN bitcoin broker and STP bitcoin broker, that is why some bitcoin traders or some bitcoin brokers will use the term interchangeably, because the only difference between Straight Through Processing execution from Electronic Communication Network execution is that the STP bitcoin broker only chooses to have display only one liquidity provider with the best markup at the time of trade while ECN implements a wide variety of liquidity providers and displays all their quotes to the traders and it's upto the trader to choose which liquidity provider to choose from while trading.
According to bitcoin broker reviews, these ECN & STP brokers are also have the lowest bitcoin spreads, therefore if you are looking for the low spread it is good to choose an STP broker or an ECN broker.
Most online bitcoin brokers do not want to clutter the traders workspace with multiple streaming quotes from various different liquidity providers for the same cryptocurrency at the same time because this might confuse cryptocurrency traders, especially the beginner traders who do not know what is what from what, that is why most crypto brokers might be ECN brokers but only choose to display only one streaming bitcoin trading price quotes from only one interbank liquidity provider, therefore becoming more of an STP broker rather than an ECN broker, but the model of bitcoin trade execution operation is basically one and the same.
If you were to open a bitcoin trading account with an ECN bitcoin broker you would get like 10 different quotes of Cryptocurrency from different liquidity providers and to trade you would have to chose the bitcoin quote from one of these liquidity provider. 10 bitcoin quotes for every bitcoin pair would make your btcusd trading platform workspace too crowded (An ECN Bitcoin Broker Lists Spreads from many liquidity providers). Another thing is that you would need to have a more complex bitcoin platform to stream these multiple bitcoin quotes, this type of bitcoin platform would not make the best platform software to trade with. Furthermore, if you open an ECN cryptocurrency trading account you will have to pay additional commissions on top of bitcoin spreads. This is also another reason why to choose STP bitcoin broker since unlike ECN bitcoin broker, STP bitcoin broker don't charge commissions on top of spreads. This means that the ECN bitcoin broker execution isn't the cheapest execution method & will charge bitcoin traders extra commissions on top of spread adding on to your bitcoin trading transaction costs.
STP Bitcoin Brokers offer the best liquidity for cryptocurrency traders to make trades
STP bitcoin brokers do not have a bitcoin dealing desk and therefore this provides for full bitcoin trade order transparency, faster and better order fills. The full order transparency means this type of STP bitcoin broker doesn't create an artificial market for clients, but instead shows a trader the real time bitcoin trading price data quotes from an electronic network of banks and allows the trader to enter the true market conditions created by the various bitcoin market participants.
Straight Through Processing Bitcoin Brokers- is the name given to bitcoin brokers that: upon receiving of a bitcoin order they will pass on the bitcoin orders directly to the network of banks through liquidity providers and as such there is no intermediary who will be involved in the order execution in other words the Straight Through Processing Execution Model will not be filtering bitcoin trade orders through a Bitcoin Dealing Desk. The absence of a Bitcoin Dealing Desk is what makes the STP execution model the best choice for many online cryptocurrency traders.
With the absence of such an inter-mediary process such as a bitcoin dealing desk the STP bitcoin broker is able to process its clients cryptocurrency orders without any delays. In addition STP bitcoin brokers don't send requotes to their clients something which most traders regard as an advantage.
This also enables the Straight Through Processing Bitcoin Brokers to allow cryptocurrency traders to trade during the release times of financial news without any restrictions. Other online bitcoin brokers might not have the liquidity of an STP bitcoin broker and might in turn lock out bitcoin trading for few minutes before and after a bitcoin news release.
Straight Through Processing Cryptocurrency Brokers provide the best bitcoin order execution and access to trade order execution due to high internal liquidity rate provided by multiple liquidity providers and reliable inter-bank partners they have.
Different Types of Cryptocurrency Brokers - The Difference Between STP Crypto Broker & ECN Crypto Broker - Difference Between STP Bitcoin Broker & ECN Cryptocurrency Broker - Types of Crypto Brokers: STP Brokers - Types of Crypto Brokers: ECN Brokers.
