What are ECN & STP Forex Brokers?
An Electronic Communications Network (ECN) or Straight Through Processing (STP) broker will forward every one of the trades placed on it directly to its “liquidity providers”, who are other market participants such as banks. In SA they are known as “no dealing desk” brokers. When trading on an ECN or STP Forex broker in South Africa, a trader is not trading against that operator. Therefore a conflict of interest doesn’t exist between the trader and operator.
ECN and STP Forex brokers usually have spreads that are lower than average, but will charge a commission for each trade. They also will often require South Africans to make a high deposit to get started. This means that ECN and STP accounts for the most part are only accessible to experienced and professional traders in South Africa.