Woodside Capital, Inc.
Project Finance, Stocks & Options, Commodity, Forex, Futures, Binary Options

Metatrader 4 STP

Forex ECN Trading Model vs Fixed Spread Forex Broker Trading

The table below explains the main differences between an ECN Broker and a traditional forex broker.

Feature ECN Trading Model Fixed Spread Broker Platform Explanation
Anonymity  Yes  No

On dealer forex trading platforms, the dealer knows your open positions, trading style and tactics and can use this information to his advantage.

Client-To-Bank
Trading
 Yes  No

On the WCI ECN, you can trade instantly on prices streamed by leading FX banks.

Re-quotes  No  Yes

Re-quotes are common in traditional spread trading. WCI does not re-quote. The platform’s technology and strict price/time dealing protocol are designed to fill your trade at the current market price.

Conflict Of Interest  No  Yes

WCI doesn’t take positions against its clients at all.

Trading During Economic Releases  Yes  ?

WCI allows all clients regardless of forex trade size to trade and put in new orders during key economic releases. During these releases, and at times of unusual market volatility, bid/offer spreads are wider than those available during ‘normal’ market conditions.

 

STP Forex Key points:

All transactions with a STP/ECN trading platform are completely anonymous. When buying or selling through an STP provider your account cannot be either identified or traced back to you.

Anonymity when STP trading is especially important when using an aggressive trading strategy as it protects your performance and STP trading strategy.

You can place an order in between the Bid and Ask spread, in the hope that the STP broker will find another market participant who will match your order. You can even place orders outside the Bid/Ask spread and attempt to gain several pips by creating your own spread.

Spreads are not fixed on an STP/ECN currency trading platform. The spreads on a particular currency pair will continuously vary depending on the volume being traded in that pair and the available liquidity to support the trades.

STP brokers get pricing feeds from multiple institutional market participants and display the best quote on their trading platform.

STP brokers provide you with improved execution on your trades. It is important to realise you are not trading directly with STP but you are simply using the network provided by ECN - electronic communication network.

The WCI MT4 is solely focused on matching up your order with the opposite side held by another market participant as quickly as possible.

RISK WARNING: Trading in Forex and Contracts for Difference (CFDs), which are leveraged products, is highly speculative and involves substantial risk of loss. It is possible to lose more than the initial capital invested. Therefore, Forex and CFDs may not be suitable for all investors. Only invest with money you can afford to lose. So please ensure that you fully understand the risks involved. Seek independent advice if necessary.