| Updated: Forex brokers can be grouped into several major categories based on the pricing models they use. One prominent category is Straight-Through Processing (STP) brokers, which have gained popularity among traders because of their approach to order execution.
STP brokers automatically route their clients’ orders directly to liquidity providers, such as banks or other financial institutions, acting as intermediaries between the two parties. There is no manual intervention or dealing desk involvement in the process. Read on as we explore STP brokers, their key features, and their pros and cons. This article also covers other popular pricing models, such as ECN, helping traders choose the model that best aligns with their strategies and budgets.
Expert opinion by Christopher Lewis:Below you can find a list of the best STP Forex brokers:
Top 9 STP Forex Brokers
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Fusion Markets
- Australia regulated broker
- MT4, MT5, TradingView, Ctrader
- Leverage up to 500
Trading InstrumentsDeposit Methods- Commodity CFDs
- Crypto CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
- Stock CFDs
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FP Markets
- Australia and CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading InstrumentsDeposit Methods- Commodity CFDs
- Crypto CFDs
- Energy CFDs
- ETF CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
- Stock CFDs
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BlackBull Markets
- Broker boasting lightning-fast execution speed
- ECN brokers with tight spreads from 0.0 pips
- $0 minimum deposit requirement
Trading InstrumentsDeposit Methods- Commodity CFDs
- Crypto CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
- Stock CFDs
-
Eightcap
- Traders can enjoy competitive trading conditions through different account types
- Offers access to over 800 CFD markets through TradingView
- Platforms like MT4 and MT5 enable multi-device trading
Trading InstrumentsDeposit Methods- Commodity CFDs
- Crypto CFDs
- Forex CFDs
- Index CFDs
- Share CFDs
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Pepperstone
- Australia and CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading InstrumentsDeposit Methods- Commodity CFDs
- Crypto CFDs
- Energy CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
- Stock CFDs
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Global Prime
- Australia regulated broker
- Advanced MT4
- $0 Minimum Account Size
Trading InstrumentsDeposit Methods- Commodity CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
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IC Markets
- Offers 2,200+ tradable markets, including 61 currency pairs
- Leverage of up to 1:1000 in select jurisdictions
- EUR/USD spreads from 0.8 pips for standard accounts
Trading InstrumentsDeposit Methods- Commodity CFDs
- Crypto CFDs
- Energy CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
- Stock CFDs
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Interactive Brokers
- Providing access to more than 135 global markets: Forex, Cryptocurrencies, Bonds, Commodities and Stocks
- Seamless integration with third-party research platforms and API access for automated trading and portfolio management.
- Advanced trading tools, such as algorithmic trading options, which allow professional-level trading executions.
Trading InstrumentsDeposit Methods- Bond Futures
- Bonds CFDs
- Commodity CFDs
- Crypto CFDs
- ETF CFDs
- Forex CFDs
- Index CFDs
- Metal CFDs
- Mutual Funds
- Share CFDs
- Stock Options
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ActivTrades
- Winner of 20+ Global Awards
- MT4/MT5, TradingView
- Leverage up to 1:400
Trading InstrumentsDeposit Methods- Bonds CFDs
- Commodity CFDs
- Crypto CFDs
- ETF CFDs
- Forex CFDs
- Index CFDs
- Share CFDs
Our 8-step guide to choosing a forex broker
- Verify regulation and authorisation (e.g., FCA, ASIC).
- Check trading costs: spreads, commissions, swaps.
- Compare execution quality: slippage, fills, order types.
- Check platforms and tools: MT4/MT5, cTrader, TradingView.
- Ensure risk controls: stop-loss, guaranteed stops, negative balance protection.
- Review funding and withdrawals: local options, fees, processing times.
- Evaluate research, education, and alerts.
- Prioritise security and support: segregated client funds, two-factor authentication, support hours.
Brokers Compared by Spread
FX Broker Deposit Method Comparison
| Brand | Minimum deposit | |
|---|---|---|
| Fusion Markets |  |
$0 |
| FP Markets | |
$50 (AU$100) |
| BlackBull Markets |  |
$0 (Standard)$0 (Prime)$20,000 (Institutional) |
| Eightcap | |
$100 |
| Pepperstone | |
$10 |
| Global Prime | |
$0 |
| IC Markets | |
$200 |
| Interactive Brokers | |
$0 |
| ActivTrades | |
$0 |
Brokers by Regulator
| Brand | Maximum leverage | |
|---|---|---|
| Fusion Markets | |
1:500 (ASIC | Pro Account), 1:30 (ASIC | Retail Account), 1:500 (VFSC | Retail Account) |
| FP Markets | |
1:500 (CySEC | Pro Account), 1:30 (ASIC | Retail Account), 1:30 (CySEC | Retail Account), 1:500 (FSAS | Retail Account) |
| BlackBull Markets | |
1:500 (FMA), 1:500 (FSAS) |
| Eightcap | |
1:30 (ASIC | Retail Account), 1:30 (CySEC | Retail Account), 1:30 (FCA | Retail Account), 1:500 (SCB | Retail Account) |
| Pepperstone | |
1:500 (CySEC | Pro Account), 1:500 (SCB | Pro Account), 1:30 (ASIC | Retail Account), 1:30 (CySEC | Retail Account), 1:30 (DFSA | Retail Account), 1:30 (FCA | Retail Account), 1:200 (SCB | Retail Account) |
| Global Prime | |
1:500 (ASIC | Pro Account), 1:30 (ASIC | Retail Account), 1:500 (VFSC) |
| IC Markets | |
1:500 (CySEC | Pro Account), 1:30 (CySEC | Retail Account), 1:1000 (FSAS | Retail Account) |
| Interactive Brokers | |
1:30 (ASIC | IBKR Lite), 1:30 (CBI | IBKR Lite), 1:30 (FCA | IBKR Lite), 1:25 (JFSA | IBKR Lite), 1:20 (MAS | IBKR Lite), 1:500 (Pro Account) |
| ActivTrades | |
1:400 (CMVM | Pro Account), 1:30 (CMVM | Retail Account), 1:1000 (FSC), 1:200 (SCB) |
Forex Broker Platform Availability
| Brand | FX pairs to trade | |
|---|---|---|
| Fusion Markets | |
cTrader, MetaTrader 4, MetaTrader 5, TradingView |
| FP Markets | |
cTrader, MetaTrader 4, MetaTrader 5, TradingView |
| BlackBull Markets | |
cTrader, MetaTrader 4, MetaTrader 5, TradingView |
| Eightcap | |
MetaTrader 4, MetaTrader 5, TradingView |
| Pepperstone | |
MetaTrader 4, MetaTrader 5, Proprietary Mobile, Proprietary Web |
| Global Prime | |
MetaTrader 4, MetaTrader 5 |
| IC Markets | |
cTrader, MetaTrader 4, MetaTrader 5 |
| Interactive Brokers | |
Proprietary Mobile, Proprietary Web |
| ActivTrades | |
MetaTrader 4, MetaTrader 5, Proprietary Web, TradingView |
Comprehensive Comparison of the Best STP Forex Brokers
| Brand | Min. Deposit | Trading Platforms | Spread | Regulation | Trustpilot |
|---|---|---|---|---|---|
 |
$0 |
|
AVG 0.91 pips |
|
|
 |
$50 (AU$100) |
|
AVG 1.29 pips |
|
|
 |
$0 (Standard)$0 (Prime)$20,000 (Institutional) |
|
AVG 0.1 pips |
|
|
 |
$100 |
|
AVG 1.1 pips |
|
|
 |
$10 |
|
AVG 1.1 pips |
|
|
 |
$0 |
|
AVG 1 pips |
|
|
 |
$200 |
|
AVG 0.82 pips |
|
|
 |
$0 |
|
MIN 0.2 pips |
|
|
 |
$0 |
|
AVG 0.5 pips |
|
How and When Did STP Order Execution Emerge?
The concept of STP order execution emerged in response to the evolving needs of the foreign exchange market. Traditionally, brokers acted as market makers, often taking the opposite side of their clients’ positions. The year 1973 marked a significant turning point in the history of foreign exchange trading, as the first electronic trade was recorded, paving the way for a new era in forex.
The introduction of currency futures trading on an electronic platform by the International Money Market (IMM) laid the groundwork for the development of modern trading systems such as STP. As technology continued to advance during the 1990s, a new type of broker emerged, leveraging automation to streamline trade execution and minimise potential conflicts of interest.
This new generation of brokers, known as Straight-Through Processing (STP) brokers, utilised advanced networks to provide clients with direct access to the market, enabling faster and more efficient trade execution. They began routing traders’ orders directly to third-party liquidity providers, such as banks, hedge funds, and other financial institutions. The advent of STP brokers transformed the forex landscape, offering clients a more transparent and efficient trading experience.
How Does the STP Pricing Model Work?
The STP pricing model is based on routing orders directly to the broker’s liquidity providers. When a trader places an order, the STP broker forwards it to its network of liquidity providers, which then compete to offer the best possible price. The broker collects a commission on each trade instead of relying solely on the bid-ask spread for revenue.
This approach allows STP brokers to offer more competitive pricing because they are not incentivised to widen their spreads or manipulate prices. The STP pricing model is designed to provide traders with the best available prices while ensuring that the broker generates revenue through commissions. Here is a brief overview of how this pricing model works in practice.
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The client sends an order to the broker, specifying the transaction details, including the currency pair, the amount to be traded, and the target price.
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The broker then transmits the request to a network of liquidity providers, such as banks and other market participants.
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The liquidity providers return their most competitive quotes for the specified currency pair.
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The broker selects the most favourable price quote.
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The trade is automatically executed without human intervention, ensuring seamless, fast, and efficient execution.
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The broker collects a small fee, which may be fixed or calculated as a percentage of the trade volume.
Main Features of STP Brokers
STP brokers are characterised by their ability to provide direct market access, transparent pricing, and fast order execution. Together, these features make them a compelling choice for traders looking to minimise trading costs and improve execution efficiency. Here are some of the main features of STP brokers at a glance.
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No dealing desk order execution: STP brokers route orders directly to their liquidity providers, allowing traders to access more competitive prices.
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Price transparency: This type of forex broker provides traders with real-time market prices, reducing the potential for price manipulation and conflicts of interest.
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Low-latency order execution: STP brokers utilise advanced technology to execute trades quickly and efficiently, reducing the risk of slippage and requotes.
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Floating spreads: Trading sites that implement this pricing model offer variable rather than fixed spreads. Their prices may be more competitive, with spreads often starting from 0.0 pips, as brokers are not incentivised to widen spreads to generate revenue.
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Commissions on trades: STP brokers earn revenue mainly by charging commissions on each trade rather than profiting from the bid-ask spread. Commissions are based on trade volume, usually one standard lot, and may apply when you open and close your positions.
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Higher deposit requirements: This type of broker may be unsuitable for small-scale retail traders because it often has higher minimum deposit requirements.
Other Common Types of Order Execution at Forex Brokers
In addition to STP order processing, several other pricing models are used by Forex brokers, including Dealing Desk brokers, also known as market makers, and Electronic Communication Network (ECN) brokers. Some brokers rely on hybrid models, as outlined below. Continue reading to learn more about each type of broker.
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Dealing Desk (DD)
Dealing Desk brokers act as intermediaries between traders and the market, often serving as counterparties to their clients’ trades. This means that the broker’s interests may conflict with those of its clients, as the broker aims to profit from the difference between the buy and sell prices. Unlike the spreads offered by STP brokers, their spreads are usually fixed rather than floating.
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Electronic Communication Network (ECN)
These brokers act as intermediaries between traders and a network of liquidity providers, such as banks, hedge funds, and other financial institutions. By aggregating prices from multiple sources, ECN brokers create a marketplace where traders can interact with one another and with liquidity providers, allowing for more competitive pricing and tighter spreads. ECN brokers provide access to the interbank market.
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Hybrid Brokers
These brokers use a combination of the ECN and STP models. They can route trades either to a network of liquidity providers or directly to a single counterparty, depending on the specific requirements of the trade. This hybrid approach enables brokers to optimise trade execution, minimise costs, and provide customers with a more robust and reliable trading experience.
Advantages of Trading with STP Brokers
Trading with STP brokers has become an increasingly popular choice among forex traders for several reasons. By using a Straight-Through Processing (STP) model, these brokers can offer benefits that may enhance a trader’s overall experience.
Traders gain access to more streamlined and cost-effective order execution, which can be particularly beneficial for those who trade frequently or in large volumes. Here is a brief overview of the main benefits of STP.
- Faster execution speeds
- Tighter spreads
- Lower trading costs
- Increased transparency
- Reduced conflicts of interest
- Direct market access
- Improved trading conditions
Disadvantages of Trading with STP Brokers
While STP brokers offer a range of benefits, they are not without drawbacks. Trading with an STP broker can result in additional costs and other disadvantages. You should consider these factors carefully, as they can significantly affect your overall experience and profitability. Below, we list the main disadvantages of trading with STP brokers.
- Commissions when entering and exiting trades
- Potentially significant price fluctuations
- Higher deposit requirements in some cases
- Potential technical issues and errors
- Limited control over trade execution
- Slippage can still occur
FAQs
Are STP brokers suitable for beginners?
STP brokers may not be ideal for novice traders because they sometimes require higher initial deposits. Beginners may also find it challenging to navigate the complexities of STP trading, especially if they struggle to understand how the fee structures work. Additionally, the fast-paced, automated nature of STP trading can be overwhelming for those who are new to the markets.
Are STP brokers a good fit for scalpers?
STP brokers can be a good fit for scalpers because they may provide rapid trade execution and lower spreads. The automated processing offered by STP brokers allows traders to enter and exit positions quickly, which is essential for scalping strategies that rely on placing multiple small trades within a short period.
Is ECN order execution better than STP?
ECN order execution is often considered preferable to STP execution because it can provide access to a deeper pool of liquidity, potentially resulting in tighter spreads and more competitive pricing. ECN execution may also reduce potential conflicts of interest and improve overall trading efficiency.
How much capital do I need to start trading with an STP broker?
The amount of initial capital required to start trading with an STP broker can vary significantly depending on the specific broker and the type of trading account you open. Generally, STP brokers have slightly higher minimum deposit requirements. It is essential to research and compare the minimum deposits at different trading sites to find one that aligns with your budget, experience level, and goals.
How can I find a reliable STP broker?
It is crucial to conduct thorough research and exercise due diligence when selecting an STP trading site. This process typically involves verifying the broker’s regulatory status, assessing its reputation by reading feedback on consumer review platforms such as Trustpilot, and evaluating its trading conditions, including spreads, commissions, and maximum leverage.
Conclusion
STP Forex brokers offer a distinctive approach to trade execution, providing traders with more transparent pricing and faster execution. Although trading with them has some disadvantages, the benefits of this model can make it an attractive choice for those seeking better trading conditions and more competitive pricing.
By understanding the features, advantages, and disadvantages of STP brokers, traders can make informed decisions and select the broker that best suits their requirements. Whether you are a seasoned trader or just starting out, STP brokers may be worth considering as a viable option.
Why You Should Trust RationalFX
When it comes to making informed decisions about forex brokers, it's essential to rely on trustworthy sources. RationalFX, a company with over 20 years of experience since its founding in 2005, has established itself as a credible authority in the industry. With an impressive collection of over 2500 reviews on Trustpilot, boasting a score of 4.2, it's clear that Rational FX has built a reputation for providing reliable and unbiased information.
What sets Rational FX apart is its rigorous evaluation process, which considers over 30 different criteria when selecting forex brokers. This comprehensive approach ensures that every aspect of a broker's service is taken in consideration, including regulation, forex spreads, trading platforms, deposit methods, and reputation. With its wealth of experience, transparent review process, and outstanding customer feedback, Rational FX is a trusted source for anyone seeking reliable information on forex brokers. You can reach us via e-mail at feedback@rationalfx.com or contact us through our social media accounts here: Facebook, YouTube, or leave a feedback here.