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How is the STP forex brokers?

The article below will present about Forex Floor, STP or STP Floor

We are listening to the flooring that is advertising Forex Broker type of DMA, STP type or type of NDD, even MM, ECN Broker ... So does this mean something? It will impact the trader? I'm compiling some articles related to this topic is designed to help the trader in considerably more

Please first learn about STP – Straight beside herself Processing-translated as the floor push command. The floor for themselves is the floor STP (STP Broker) will push your order straight to the providers of liquidity (Liquidity Provider-LP) and benefits of trader than the floor will not be against each other.

The primary Liquidity Provider is the new trade against the trader.

In General, the definitions of STP is all the floor (Broker) that no Dealing Desk sections (supervision orders) Besides the push command straight and then match the bid/ask from the liquidity provider can be called STP Floor (STP Broker)

But the STP also has many types of

-The floor is in fact just STP White Label (see what is the White Label) and push commands on 1 floor Parents then it is also called STP. Regardless of the mother's "House" and "her" pushing the Floor is about the command STP

-Reverse order matching STP Floors (like the House), but then pushing this command always automatically (if not automatically push the dealing desk is there and not be known as STP) up to the partners to provide liquidity (liquidity provider), also known as STP. Because it doesn't "cuddle" command which only match of commands to create the quick for the customer.

-Non-intervention that STP Floor push straight up customer order system of liquidity providers.

Problems to be concerned with STP

1. The amount of Liquidity Provider (LP) of the floor

Because LP is the trade in contrast should if 1 floor trader STP that only 1 LP behind the well regarded as trader are hit with ... 1 home and risks will increase. If the floor STP has many LP spreads will better (due to multiple sources). In General, the trader should select STP Floors have multiple LP

2. Spread of STP

Spread (the difference of Bid/Ask-the price of purchase/sale price) normally 2 types is fixed (Fix) or variable (Floating or Variable). And STP have enough Floor both this

-Cases Spread fixed (fix spread) it can be (1) the floor STP only 1 LP and LP laid Spread out for the trader. (2) the floor LP but this STP 1 behind the system to calculate the view the gap between the best Bid and best Ask price of the LP, see the size would be, and then the floor again with a fixed level of STP Spread a bit higher to make a profit. In terms of market contraction spread small Floor back STP will have much more profitable.

-In case of Spread volatility (floating spread) it is possible that the floor has many LP and STP will choose the best Bid price from 1 LP, then best Ask price from 1 LP, then reconnect and bring up the Spread quotes. Can the floor STP will "stats" Add 1 Ty spread (called mark-up) in order to be profitable, or will the currency commission.
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3. Matching mechanism

There are 2 matching mechanism is common Instant Execution and Market Execution

-If 1 STP floor that use Instant Execution mechanism (the price shown on the graph, click the transaction, not the right price will be on speed, requote the command often slow) then maybe it is the floor STP only 1 LP or even the floor ", false, false form" STP STP to "hug" the guest command

-If the floor STP mechanism Market Execution (prices shown on the graph, click the transaction you may be false joints 1 Ty according to market price, no requote, on quick command) then the Floor can be good, there are many LP STP.

In summary, the table summary of STP floors as follows:

A Liquidity Provider (LP) Usually Spread not good
Many of the Liquidity Provider (LP) Spread will often better
Fixed spread Usually do only 1 LP
Spread fluctuations are more LP
Instant order matching can be Tripod STP "wits". Floors this transaction should not STP
Order matching Market ability is the floor STP "cooler" high Floor Type STP this better
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