Why Traders Select STP Brokers and Difference Between STP Crypto Brokers & ECN Crypto Brokers

Straight Through Processing is the name given to online brokers that; when upon receiving a client order they will pass it directly to their Bitcoin Liquidity Provider. Liquidity providers (LP) can include Banks and as such there's no intermediary involved in the order processing in other words the Straight Through Processing model does not filter the trade orders through a Dealing Desk, DD.

STP Online Brokers

With absence of an intermediary process (dealing-desk) the Straight Through Processing will be able to process its client's orders instantly without any delay. This makes STP brokers the most recommended broker type because they do not re-quote their clients something which most traders regard and consider as very important. Straight Through Processing will also in effect will allow its clients/customers to trade during the release of financial news reports without any restrictions.

These brokers benefit from having several liquidity providers & an increase in the number of liquidity providers in the system means better order fills for the clients.

Prior to reading on, spot the difference between these 2 headings so that as the headings below do not seem like a repetition.

Reasons why Top Brokers prefer this execution
Reasons why Top Bitcoin Traders prefer this execution

Reasons Why Online Brokers Choose This Model

As the clients places their crypto orders through the Straight Through Processing platform, the orders are then sent directly to the liquidity providers & as such the STP Broker executes trade positions efficiently and quickly thus providing better fills for their customers using this model.

Why Traders Choose Straight Through Processing(STP) Execution

Client trades obtain better and faster fills through this technique.

The better and faster fills are obtained and received directly from the many competitive market bids and provides coming through the many LPs, which provide for deeper liquidity within the bitcoin market & in turn this implies the client gets the best fills.

Client transactions with an STP crypto broker means there is anonymity for the client orders which are instead automatically executed through the inter bank market network anonymously.

ECN Online Brokers

Electronic Communications Net-work ECN provides traders with realtime data quotes straight from network of banks that form the Interbank markets.

ECN Crypto Brokers will show the entire bid and ask offers currently available in the btcusd trading market from banks. Electronic Communication Network allows investors to place their crypto orders straight through to the btcusd trading market. Liquidity isn't provided by the broker but by this inter-bank net-work of banks. This way traders transactions through an Electronic Communication Network and henceforth they can execute trades quickly and instantaneously without getting re quoted.

STP Brokers and ECN Online Brokers Comparison

Most Investors ask which is the best between the STP Broker and the ECN Broker? & What is the difference between these two? - Compare brokers ECN and STP execution models?

STP Broker

STP crypto brokers many liquidity providers, but selects the best at any one given time mechanically/automatically for the online trader. Therefore when a one places a trade and the trade orders will be placed direct to the inter-bank.

Therefore Bitcoin STP brokers are like Bitcoin ECN brokers, the only difference is that the Straight Through Processing(STP)STP model mechanically/automatically chooses the best quote, at that particular time of trade execution and does it mechanically/automatically for the trader.

ECN Broker

ECN crypto brokers have many liquidity providers from which a trader will see all at the same time and then select which one to trade, It is like having 10 crypto brokers to choose from which to trade.

For true Bitcoin ECN brokers, one will be required to look at many streaming quotes at the same time & select one, each will having varying spreads & the investor will try to select and choose the low spread for himself among the 10 displayed for the same bitcoin chart.

There is no much difference between these two, that's why some traders or some online brokers will use the term interchangeably, because the only difference between the 2 is that the STP only chooses to display automatically the best bitcoin trading quote chosen from a multiple of liquidity providers while ECN shows all of them at the same time & it's up to the investor to select and choose which one to open an order with - as a trader you might not be able to chose the best as these change very fast.

According to reviews, this execution model also have the low spread, henceforth if you're looking for the low spread it's good to choose an STP.

Most brokers do not want to clutter the platform work space with multiple bitcoin trading streaming quotes from various different places which might confuse the trader, especially the beginners who don't know what is what, that's why most online brokers might be implementing an Electronic Communications Network but decide to only display one streaming bitcoin quote from only one interbank, thenceforth becoming more of an STP rather than an ECN, but the model of operation is basically one & the same.

If you were to open an account with a Bitcoin ECN crypto broker you would get like 10 quotes of each crypto instrument from different banks and to trade you would have to chose from one of these banks - 10 bitcoin price quotes for every bitcoin chart would make your bitcoin platform workspace too crowded. Another thing is that you'd need a more complex bitcoin platform to stream this amount of data, this type of platform wouldn't make the best option to trade with. Furthermore if you open an ECN account you'll have to pay additional commissions on top of spreads. This is also another reason why to choose STP since they don't charge commissions.

Because most brokers are MT4 crypto brokers and they want to make retain the platform as it is which makes it easier to operate and which is why this trading platform software is the most popular/liked, these MT4 crypto brokers will only display the low spreads only after mechanically/automatically choosing it using their algorithms, then display and show this low spread alone at all times.

STP offer the best execution conditions for traders to make trades

STPs execution technique/method provides for full trade transparency, faster and better order fills. The full transparency means a investors receives the real time data allowing them to enter the btcusd market directly at the best fill level.

The best brokers implement this model because this execution model is able to process its client's orders without any delay. In addition this model does not re-quote something that most Bitcoin investors regard as a huge advantage.

Straight Through Processing(STP)STP provides the best 24 hour access to market execution due to the high liquidity that they have from their reliable inter bank partners.

Get More Tutorials and Courses:

Trade Bitcoin Trading