Best STP Brokers
The STP broker businesses model has several benefits for retail forex traders vs ECN and dealing desk brokers. In this review, we’ll discuss the meaning of STP and its pros and cons. We also list the best STP brokers for forex and CFD trading.
Top 5 STP Brokers
#1 - Forex.com
Why We Chose Forex.com
Forex.com boasts a global reputation with multiple awards and 20+ years experience. Regulated in the US, EU, UK and Canada they provide a huge range of day trading markets, not just forex, and offer competitive fees on a cutting-edge platform. The brand also provides a suite of additional tools, from performance analytics and SMART Signals to advanced charts and strategy builders.
"Forex.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."- DayTrading Review Team
- Instruments: Forex, Spot Metals
- Regulator: NFA, CFTC
- Platforms: MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
- Min. Deposit: $100
- Min. Trade: 0.01 Lots
- Leverage: 1:50
- The proprietary Webtrader is an excellent option for day traders, offering over 80 technical indicators for detailed analysis
- The $100 minimum deposit requirement makes the broker accessible for beginners
- The free demo account allows you to practice day trading strategies in a risk-free environment
- It's a shame that there's no copy trading platform for beginners or signal providers
- The investment offering varies between countries
- The $15 monthly inactivity fee is higher than some competitors, including XM which only charges $5
#2 - Interactive Brokers
Why We Chose Interactive Brokers
Interactive Brokers (IBKR) is a premier brokerage for experienced traders, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."- DayTrading Review Team
- Instruments: Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies
- Regulator: FCA, SEC, FINRA, CBI, CIRO, SFC, MAS, MNB
- Platforms: Trader Workstation (TWS), Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
- Min. Deposit: $0
- Min. Trade: $100
- Leverage: 1:50
- IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.
- There's a vast library of free or paid third-party research subscriptions catering to all types of traders.; plus, you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
#3 - ForexChief
Why We Chose ForexChief
ForexChief is a foreign exchange and CFD broker, established in 2014. The company is based offshore and registered with the VFSC and FMA. Users can choose between a wide selection of accounts and base currencies, making ForexChief accessible to global traders. The brand also stands out for its no deposit bonus and fee rebates for high-volume traders.
"ForexChief continues to prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The broker's rebate scheme and investment accounts will particularly appeal to seasoned traders. However, the lack of top-tier regulatory oversight is a major drawback."- DayTrading Review Team
- Instruments: CFDs, Forex, Metals, Commodities, Stocks, Indices
- Regulator: VFSC
- Platforms: MT4, MT5
- Min. Deposit: $10
- Min. Trade: 0.01 Lots
- Leverage: 1:1000
- ForexChief offers STP/ECN execution with low spreads from 0.0 pips and low commission rates starting from $2.50 per side
- ForexChief delivers a high-quality day trading environment via the MT4 and MT5 platforms, with market-leading charts, indicators and tools
- The low minimum deposit of $10 will appeal to beginners, as well as the beginners’ guides in the Library
- The Classic+ and Cent accounts provide access to fewer instruments than the other account types, at 50+ and 35+, respectively
- The total range of 150+ assets is much lower than most competitors who typically offer hundreds
- ForexChief is an offshore broker with weak regulatory oversight from the VFSC, so traders will receive limited safeguards
#4 - Axofa
Why We Chose Axofa
Axofa is a forex and CFD broker registered in St Vincent and the Grenadines. The broker offers three account types with access to forex, commodities and indices. With ECN processing, low minimum deposits and no commissions, Axofa remains an attractive option, although the broker does not hold a reputable license.
"Axofa could be a good option for clients looking for social trading features alongside the MT5 platform. The low entry requirements and ECN spreads are particularly promising, but the lack of transparency and respected regulatory oversight raises security concerns."- DayTrading Review Team
- Instruments: Forex, CFDs, Stocks, Indices, Commodities
- Regulator: SVGFSA
- Platforms: MT5
- Min. Deposit: $1
- Min. Trade: 0.01 Lots
- Leverage: 1:1000
- The broker offers a range of local payment methods, especially for clients in Asia, as well as crypto deposits
- Axofa offers the MetaTrader 5 platform which will particularly serve intermediate to experienced traders looking for advanced charting tools
- The $1 minimum deposit across all 3 accounts will appeal to novices and those on a budget
- Our team found inconsistencies between international subsidiaries and website information
- There is limited verifiable information about the broker’s owners and background
- The offshore operations and lack of any regulatory oversight is a major concern
#5 - Sage FX
Why We Chose Sage FX
SageFX is an offshore, unregulated CFD broker that offers highly leveraged trading on forex, stocks, commodities, indices and crypto via the TradeLocker platform. Traders can access commission-free trading or an ECN account with tight spreads. While the broker's regulatory status is weak, it does provide segregated accounts and two-factor authentication.
"Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker's prop trading service will also appeal to users looking for funded accounts with up to $200K available."- DayTrading Review Team
- Instruments: Forex, indices, cryptos
- Regulator: Pending
- Platforms: TradeLocker
- Min. Deposit: $10
- Min. Trade: 0.01 Lots
- Leverage: 1:500
- Bonus offers and trading competitions
- Ability to deposit and withdraw via Bitcoin
- Low starting deposit from $10
- Lacks educational resources and other extra features
- Relatively narrow range of asset classes
- Not regulated by any reputable body
What Is An STP Broker?
STP stands for Straight Through Processing and is a type of technology used by brokers to electronically pass trades directly to the market. STP forex brokers execute trades on behalf of clients by sending them straight to liquidity providers, such as banks or interbank exchange houses. Trades do not pass through a dealing desk, instead, they go directly to the market.
No Dealing Deck Vs Dealing Desk
STP brokers are a type of No Dealing Desk (NDD) broker, meaning they do not use a dealing desk to complete a trade. Dealing desk brokers, known as market makers, fill the opposite end of a client’s trade. They do this either by finding another client to take the opposite side or by taking the trade themselves.
Since market makers do not connect directly to the wider market, there is a limited number of clients that can take the opposite side of your trade. Therefore, often the broker will buy the stock you’re selling, for example, making the market themselves.
Regulated STP forex brokers have slightly different licenses to market makers. They are known as A-book brokers, where market makers are known as B-book.
STP Vs ECN
Another type of NDD provider is an ECN (Electronic Communication Network) broker. These are similar to STP brokers in that they both send trades directly to the market. However, ECN brokers act as a liquidity hub, bringing together banks and financial institutions that compete to take the opposing side of your trade.
Pros Of STP Brokers
STP brokers are often favoured by retail traders. Their business model comes with several benefits:
- Processing speed – The STP technology used by these brokers means that trade execution occurs electronically and at high speed. Some market maker brokers also use software to process trades, but many complete them manually via a dealing desk. This can be a slow process and can result in requotes if the market is volatile.
- Quotes reflect the market – STP brokers trade directly with the market. Therefore, their quotes accurately reflect prices. Market makers may offer artificial quotes to improve their margins.
- No conflict – Market maker brokers profit when their clients lose since they’ve often taken the other side of the trade. This can cause some brokers to operate in ways that may conflict with their client’s ability to win. For example, they might offer artificial quotes or pick and choose which orders they fill. STP brokers are linked directly to the market and so have no profit motive behind client losses. In fact, if clients profit, they’ll often invest more with the broker whose revenue will grow.
- Lot sizes – ECN brokers typically restrict trades to a minimum lot size of 0.1 – the equivalent of 10,000 units of the base currency. This is because banks and other financial institutions operate on this minimum trade size. This can be prohibitive to retail traders, who may want to trade smaller values. STP brokers can often offer lower minimum lots. Admiral Markets and XTB, for example, have a minimum lot size of 0.01 while Interactive brokers has no minimum order size – you can place a trade for as little as 1 unit of the base currency.
Cons Of STP Brokers
Since STP brokers operate with most of the benefits of both ECN and market-markers, drawbacks are limited:
- Spreads – STP brokers tend to offer wider spreads vs dealing desk brokers. This is because dealing desk brokers make money from their clients’ losses. Therefore, they do not need to make as much revenue through spreads. With STP brokers, their revenue is coming solely through the spreads and commission they offer.
- Hybrid models – Some dealing desk brokers take a hybrid approach. They may pass some trades onto the market and take the other side of the trade on others. It can be difficult to know which brokers operate in this way. Seeking clarity from the broker’s customer support team via a contact number may help.
Identifying STP, ECN & Market Maker Brokers
It can be difficult to determine if a broker is a true ECN broker, STP or market maker. Some brokers do not make their business model clear to clients. However, some clues will help you work it out for yourself:
- Minimum lot size – If your broker is offering a minimum lot size below 0.1, they are probably not an ECN broker. The lowest minimum lot sizes are usually offered by market makers and STP brokers.
- Spreads – Brokers claiming to have the tightest spreads and be the cheapest around could be market makers. They often make money from client losses and so do not need to create as much revenue through spreads. Also, ECN brokers typically offer tight spreads but charge commissions to generate profit.
- Scalping rules – Scalping is a trading strategy that utilises inefficiencies in market quotes to make a profit. Traders can make healthy returns using scalping strategies, which can hurt a market maker’s bottom line. But most importantly, market makers will find it difficult to fill orders at the speed required for scalping strategies. Therefore, forex scalping is often not permitted at market makers and is instead more common at ECN and STP brokers in most countries, including the USA, UK, Australia, South Africa and more.
Final Word On STP Brokers
STP brokers are those with the technology to execute forex trades directly with the market. They offer quick processing times and accurate quotes whilst allowing small lot sizes which makes them a good choice for retail traders. However, it’s not always easy to know if your broker follows an STP model. If you start to experience slippage, quotes you feel are not in line with the market or requotes that you’re not happy with, you may want to switch to one of the STP brokers in our list above.
What Is An STP Broker?
An STP broker routes trades directly to the market using Straight Through Processing technology. They follow a No Dealing Desk model (NDD). STP brokers are usually the preferred choice for retail traders due to accurate market quotes and fast processing.
How Are STP Brokers Different From ECN Brokers?
STP brokers are similar to ECN brokers in that they both use no dealing desk models that offer direct market access. However, ECN brokers route trades to a liquidity pool and providers that they control. They also tend to offer larger minimum lot sizes of 0.1 (10,000 units of the base currency).
My Broker Offers An ECN Account, What Does This Mean?
ECN accounts promise faster execution speeds and low spreads like those that institutional traders benefit from. Your trades will be executed on the live forex market, as opposed to going through a dealing desk or STP account. The downside is that ECN often requires high minimum deposits and large minimum trade sizes.
How Can I Tell If My Broker Is A Market Maker?
Brokers may make it tricky to unpick their business model as no dealing desk brokers are often preferred by retail traders. With that said, there are some clues that you can look for. For example, stringent rules on trading behaviours, extra tight spreads and regular requotes indicate they could be a market maker.
Are NDD Brokers And STP Brokers The Same?
Yes, an STP broker is a type of no dealing desk (NDD) broker. They send your trades directly to the market rather than through a dealing desk. ECN brokers are another type of NDD broker. Dealing desk brokers are sometimes called market makers.