FXOpen ECN vs STP Account

Hayashi: I think you should know that the meaning of author in the STP standard account is very standard. Basically, a lot of it uses standard units. So that means when the author talks about 1 standard unit it means 1 lot. And since the Standard STP account can offer a minimum trade size of 0.01 lots, that means 0.01 standard lots.

For micro account, actual micro account transaction size is 0.01 standard account lot (1 micro lot = 0.01 standard account lot). So when the author talks about 1 micro lot, it means 0.01 standard lot. And 0.1 micro lot means 0.001 standard account lot.

I hope you will understand my explanation! Sorry for my English not good!

Sandy Sallywin: The key features that set ECN and True ECN Broker apart are the interbank liquidity pools that connect multiple market participants, such as banks, centralized exchanges, brokers, businesses and private investors. When you can login to it, you can see the whole Forex market very clearly, you can even see the actual market spread and you can also see other trader's position.

So the author said something about placing an order against another trader, that's what she meant!

Meanwhile, "fake" ECN brokers only offer lower spreads, almost identical to real ECN brokers, as well as almost the same fast execution. However, I can say that ECN functionality connecting to the primary market cannot be provided by "fake" ECN brokers.

Be sure to read the broker's statement about the type of broker. If they offer an ECN account but don't say they are an ECN broker, that means 50 50 they are an STP account or even a market maker broker

Karl: Hey, I saw your comment about the 50/50 split between market makers and ECN brokers. I was wondering if it's possible for brokers to offer both STP and true ECN services? I read an article about FXOpen that offers STP service, but some people say it's actually an ECN broker. I'm a bit confused about how it all works, but I'm guessing it's possible since both are NDD.

Another thing I'm curious about is whether a DD broker, like a market maker, can also be an ECN broker at the same time. Is that possible? Thanks!

Lewy: Sure, it's possible for a DD broker, like a market maker, to also be an ECN broker at the same time. Basically, it comes down to how the broker processes orders. If they act as a market maker for some trades and provide direct market access for others, then they could be considered both a DD and an ECN broker. It really just depends on the broker's specific setup and the types of accounts they offer. So, in short, the answer is yes, it's possible! Hope it can help you, dude!

George Jared:

Talking about scalping, you can actually do it in any type of trading account. It's all about opening and closing trades within a short time frame, usually just a few minutes. Beginner traders who are ready to trade on a live account often choose to trade on a standard account since the commission required is lower. Keep in mind that if you trade at 0.01 lot, the value of each pip may be lower since 1 pip can be worth $0.1.

Regarding FXOpen, according to their review, the spreads start from 1.1 pip (you can read it here : FX Open Review), and the fees that may occur each time you trade with 0.01 lot start from $0.11. If you are able to scalp 15 pips per trade, your gross profit would be $1.65 or your net profit would be $1.54 ($1.65 - $0.11), which is still a profit. So, you can definitely trade with an STP account!

Venda: Thank you for providing this information on scalping and the suitability of STP accounts for this type of trading! It's helpful to know that scalping can be performed in any account, and that beginners may prefer to use a standard account due to the lower commission fees. Additionally, your breakdown of the pips, fees, and potential profits associated with FXOpen's STP account is informative. And I willing to open the link that you gave above.

It's clear that careful consideration of these factors is important for any trader, particularly those who engage in scalping. While the potential profits may be attractive, it's crucial to also factor in the associated costs and risks. Overall, your insights provide valuable guidance for traders looking to engage in scalping through an STP account.

When it comes to the suitability of STP for beginners, it really depends on the individual's level of experience and trading goals. STP is a type of execution that can provide traders with a more transparent view of the market, but it can also come with higher spreads or commission charges.

For beginners, it may be more appropriate to start with a simpler execution type, such as market or limit orders, before moving on to more complex strategies involving STP. It is also important for beginners to do their research and choose a reputable broker that offers STP execution with fair pricing and reliable order execution.

Overall, STP can offer transparent view of the market but with higher fees because it doesn't offer direct connect to the first LP

I agree! As you can see from the previous comment, the calculations prove that traders can trade using STP even at a cheaper cost. This is because traders can use the STP feature to maximize their profits. However, experienced Forex traders may prefer ECN as they are familiar with its features. As a trader, whether you are a beginner or experienced, if you do not face any issues while trading using STP execution, it is better to stick with it. Profit does not solely depend on ECN or STP execution, but it is based on how the trader takes their trading to the next level!

Let me help you! When it comes to trading cryptocurrencies, ECN accounts are generally considered better than STP accounts. This is because ECN accounts offer deeper liquidity and tighter spreads, which can be beneficial for traders looking to make frequent trades in a volatile market like cryptocurrencies. Additionally, ECN accounts offer more transparency and faster execution speeds than STP accounts, which can also be advantageous for cryptocurrency trading. However, it is important to note that ECN accounts may have higher fees and require a larger initial deposit compared to STP accounts. Ultimately, the choice between STP and ECN account types will depend on your individual trading style and preferences!

If a broker offers both STP and ECN accounts, it doesn't necessarily mean that they are a true ECN broker. However, it does show that they have multiple account options available for traders with different trading needs. To determine whether an account is using STP or ECN pricing, you should look for the spreads and commissions charged by the broker. With an ECN account, you should expect to see raw spreads with a commission added on top, while an STP account may have wider spreads without a commission. Additionally, ECN accounts typically offer depth of market (DOM) information, which shows the available liquidity at different price levels, allowing traders to see the best available prices and place orders accordingly.

I hope this helps clarify the differences between STP and ECN accounts and how to identify them in FXOpen or other brokers!

@Cloud: Certainly! Understanding the conversion between micro lots and standard lots is important for managing risk and making informed trading decisions. In general, the standard lot size is typically referred to as 1.0 lot, representing 100,000 units of the base currency.

To convert 0.1 micro lots into standard lots, you can use the following formula:

Standard Lots = Micro Lots / 10

In this case, if you have 0.1 micro lots, dividing it by 10 would give you the equivalent in standard lots. Therefore:

0.1 Micro Lots / 10 = 0.01 Standard Lots

So, 0.1 micro lots would be equivalent to 0.01 standard lots.

Understanding this conversion allows you to assess position sizes and manage risk effectively. It's important to consider your trading strategy, risk tolerance, and account size when determining the appropriate lot size to trade.

Maybe some people who don't understand trading will choose to trade EUR/USD because they think it will provide a more volatile market and a more stable market.
However, For me, as a novice trader and most of my coaches have also said, there is no one "best" currency pair to trade in forex, as the optimal choice of currency pair depends largely on your individual trading style, risk tolerance, and personal preference. Some currency pairs that are very friendly to trade:

EUR/USD (Euro/US Dollar)
USD/JPY (US Dollar/Japanese Yen)
GBP/USD (British Pound/US Dollar)
USD/CHF (US Dollar/Swiss Franc)
AUD/USD (Australian Dollar/US Dollar)
USD/CAD (US Dollar/Canadian Dollar)
NZD/USD (New Zealand Dollar/US Dollar)
These currency pairs are known as "major pairs", because they represent the most traded currencies in the world. However, there are also "minor pairs" and "exotic pairs" that can be traded in forex, and these may offer unique opportunities depending on market conditions and your trading strategy. However, this pair is not widely traded. So, it is best to have a Main Pair.

FXOpen has very low spreads and the standard account has no commission. Therefore, it is helpful for new traders to trade without worrying about high transaction fees.

Overall, brokers determine the spreads they offer on currency pairs based on a combination of market conditions, liquidity, their own costs and profit margin, and the trading volume of their clients. So, it is not just adding some modification of the spread with profitable but also many factors included and more detail, I can list at below :

• Market condition, The most important factor affecting spreads is the supply and demand dynamics of the market. If there is high demand for a particular currency pair, the spread can be tight, which means that the difference between the bid and ask prices will be smaller. Conversely, if demand is weak, the spread can widen, which means that the difference between the bid and ask prices will be larger.
• Liquidity is another crucial factor that determines the spread. The more liquid a currency pair, the tighter the spread is likely to be. This is because a more liquid market means that there are more buyers and sellers in the market, which creates more competition and narrower spreads.
• Broker's markup, trading volume, and even time of day can affect the spread as well.

All the factors above are basically the same from broker to broker. It's the same with FXOpen too

Furthermore, for the problem of scalping, remember that scalping is trading with very short opening and closing price times and can make many entries. Because it generates many entries, spreads are calculated more frequently. And if the spread is high then the transaction costs are also high. This is why scalping requires low spreads. The standard unit of spread in pips and 1 pip is usually $10, but if you trade 0.1 lot or 0.01 lot, the pip can be $1 and $0.10.