XM Trading:Which is better, STP or ECN?

XMTrading

There are two different order methods for XM trading at overseas Forex companies: STP and ECN. STP accounts and ECN accounts have different transaction costs such as commissions and spreads, and each has its own benefits and features. We will summarize the features, benefits, and precautions of XM’s STP account and ECN account.

Which is better, STP or ECN account?

XM has a leverage of 1000 times, so many traders who want to trade big with a small amount of money gather. With XM’s STP account, the minimum deposit amount is 500 yen and you can receive a deposit bonus of up to 500,000 yen, so STP accounts are gaining popularity due to the low hurdles of trading. STP is recommended for those who want to stick to high leverage trading, and ECN is recommended for those who want to reduce transaction costs such as scalping.

STP is standard, micro, KIWAMI account

The ECN account will be a ZERO account. The rest will be STP.

Account typeStandard accountmicro accountKIWAMI pole accountzero account
SpreadFluctuationFluctuationFluctuationFluctuation
Maximum leverage1,000 times1,000 times1,000 times500 times
Minimum deposit amount$5$5$5$5
BonusNew account opening bonus deposit bonus
trading bonus
New account opening bonus
deposit bonus
trading bonus
New account opening bonusNew account opening bonus
Amount of currency in 1 lot100,000 currency1,000 currencies100,000 currency100,000 currency
Minimum order quantity0.01 lotMT4: 0.01 lot (10 currencies)
MT5: 0.1 lot (100 currencies)
0.01 lot0.01 lot
Maximum number of orders50 lots100 lots50 lots50 lots
Number of stocks handled[FX/currency pair] 57 stocks [FX/precious metals] 4 stocks [CFD/stock index] 30 stocks [CFD/Commodity] [CFD/Energy] 5 stocksSame as leftSame as leftSame as left
transaction feefreefreefree$5 each way

What is an STP account?

STP (Straight-Through-Processing) is an ordering method that electronically processes the flow of FX trading from order to execution to settlement without human intervention. With an STP account, you will trade at a rate that the FX company adds the spread to the rate presented by the bank called the cover destination. It is said that it takes 0.1 to 0.3 seconds to complete the contract compared to an ECN account due to the matching of trades.

What is an ECN account?

ECN (Electronic Communications Network) accounts are directly linked to the interbank market, making it a highly reliable ordering method as trading operations by FX companies cannot occur. It is characterized by being able to make a contract at a bank that offers the lowest rate among electronic exchanges called the interbank market. The reason why a fee is charged separately from the spread is that there is a usage fee for this electronic exchange, and the burden is on the trader side.

Difference between STP and ECN accounts

STPECN
transparencyhighquite expensive
Spreadwidenarrow
transaction feefreePaid
contract powerStrong when trading volume is lowStrong when trading volume is high
leveragehighlow
Board informationNot seecan see
Minimum transaction quantitysmallbig

From the trader’s point of view, the big difference is the presence or absence of commissions. You may feel that the zero fee is more profitable, but the STP account has a rate that includes the spread, so the overall cost will increase. When the market changes suddenly, the ECN account has a higher contracting power, and looking only at the trading environment, it can be said that the ECN account is more advantageous.

Features of STP accounts

STP has the following characteristics.

Bonuses and XMP

With XM STP account you can take full advantage of 4 types of bonus campaigns. This is a huge advantage as the bonuses at XM are very generous.

No transaction fees

STP is free of transaction fees. On the other hand, the Zero account (ECN account) incurs a transaction fee ($10 round trip) for each trade.

high leverage trading

There are limits depending on the margin, but with an STP account you can trade with high leverage of up to 1000 times.

low minimum deposit

It has a very low minimum deposit of $5. The minimum lot is set from 0.01 to (10 currencies), so you can start with small transactions.

wide spread

STP accounts have wider spreads than ECN accounts. This is especially disadvantageous for traders who mainly do scalping.

low transparency

ECN can trade directly with investors on electronic exchanges and you can check order details and quotes, whereas STP trades at the rate presented by the cover party, so transparency is inevitably lower than ECN. put away.

Features of ECN accounts

ECN has the following features.

low transaction costs

XM’s zero account (ECN account) incurs a transaction fee (round trip $10/100,000 currency). However, since the spread is narrow, the total transaction cost can be reduced.

high commitment

In the case of the STP method, the performance of the server etc. is greatly related to the execution power, but in the ECN account, the liquidity of the transaction currency determines the execution power.

Slippage is less likely to occur

ECN accounts tend to have less discrepancy between the price at the time of ordering and the price at which the transaction is actually executed because the FX company does not intervene in the trading order.

less bonus

STP accounts can use all 4 types of bonuses. On the other hand, the zero account (ECN account) only has a new account opening bonus.

High minimum deposit

The zero account of the ECN account has a high minimum deposit amount of $ 100. Considering the STP is $5, it’s a bit expensive.

low leverage

Standard and Micro accounts can be traded with a maximum leverage of 1000 times, but a zero account (ECN account) is limited to a maximum leverage of 500 times.

High minimum transaction volume

The minimum trading volume (minimum lot) is the same as the Standard account, but higher than the Micro account. Therefore, if you want to trade small amounts, a micro account is recommended.

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