Why Traders Choose Best Gold Trading STP Broker and The Difference Between Best Gold Trading STP Broker and Best Gold Trading ECN Broker
XAUUSD Trading STP Definition
Best Gold Trading STP Broker or Straight Through Processing, is the name given to brokers that, when upon receiving a client trade order they will pass on the gold orders directly to their Gold Trading Liquidity Provider. Liquidity providers can include Banks & as such there is no intermediary involved in order processing in other words the STP doesn't filter the gold orders through a Dealing Desk. Absence of a Dealing Desk intervention is what makes this electronic trading platform a Straight Through Processing.
With the absence of an inter-mediary process (dealing desk) the Best Gold Trading STP Broker, Straight Through Process execution will be able to process its clients orders instantly without any delay. This makes Best Gold Trading STP Brokers the most recommended gold broker type. Straight Through Processing Brokers will also not send re-quotes to its clients something that most investors regard as very important. Straight Through Process execution will also in effect will allow its clients to trade during the release of financial news without any restrictions.
Straight Through Processing gold brokers benefit from having several liquidity providers and an increase in the number of providers in the system means better fills for the client. A large number of Best Gold Trading STP Brokers will use banks trading on the interbank markets as their liquidity providers.
Before Reading Spot the difference between these two headings so that the headings below don't seem like a repetition.
- Reasons why Brokers select STP execution
- Reasons why Traders Choose STP execution
Reasons why XAUUSD Trading Brokers choose to be Best XAUUSD Trading STP Broker
In addition to the fact that most traders prefer Straight Through Processing due to the fact that a client's losses are not a broker's profit. It is therefore in gold broker 's interest for the Client to make profitable trades, a STP execution model often implies that there is No Dealing Desk (NDD) & subsequently has less expenses through its staff salaries.
An Best Gold Trading STP Broker is compensated through a markup on the spread it obtains from its Gold Trading Liquidity Provider &/or commissions imposed for each trade. As most liquidity providers of Straight Through Processing execution are banks on the Inter bank market, the majority of which offer fixed spread this allows the Straight Through Processing Brokers to provide both fixed & variable spreads to its clients.
Each time a client trades through a Straight Through Processing platform, the Best Gold Trading STP Broker will always make a profit. As Straight Through Processing add a small markup to the spread they receive from their provider when getting quoting of bid/ask rate. The Best Gold Trading STP Broker will apply this markup by a certain amount of fractional pips to the bid and ask xauusd price that it receives from its best bid/ask Gold Trading Liquidity Provider before passing the rates on to client via the straight through processing electronic platform.
As the client places the order through the STP platform, the gold orders are then sent directly to the Gold Trading Liquidity Provider and as such the Best Gold Trading STP Broker executes the same orders as the client at a slightly better xauusd price this is the markup.
Reasons why Gold Traders Select Straight Through Processing Brokers
Clients often choose to execute trades via an Best Gold Trading STP Broker as it often implies there is no Dealing Desk, which in turn means that the broker is more transparent with clients.
The Traders enter trades into a true market instead of an artificial market that might be created by a market maker. Client trades obtain better and faster fills through an Best Gold Trading STP Broker.
The better & faster fills are obtained directly from the many competitive market bids & offers coming through the Straight Through Processing liquidity providers, which provides for more liquidity within the xauusd market and in turn this implies lower execution xauusd prices for the client.
Client transactions with an Best Gold Trading STP Broker means there is anonymity for the client as there is no Dealing Desk monitoring the transactions of orders coming in from each client. The Gold Trading orders are instead executed automatically through the xauusd market network anonymously.
Another Type of Online Gold Broker is Best Gold Trading ECN Broker
What is an Best Gold Trading ECN Broker?
Electronic Communications Network- Best Gold Trading ECN Broker provide traders with real time data quotes straight from the network of banks that trade Gold- The Interbank market. Since these Best Gold Trading ECN Brokers offer real time data gold trading quote from these network via their own Electronic Communication Network which connects directly to the Interbank network of banks, they are known as Best Gold Trading ECN Broker technology brokers, short form is Best Gold Trading ECN Broker.
Best Gold Trading ECN Broker will show the entire bid and ask offers currently available in the xauusd market from banks. An Best Gold Trading ECN Broker will allow traders to place their gold orders straight through to the gold trading market. The liquidity isn't provided by the broker but by this inter-bank network of banks. This way gold traders trading through an Electronic Communication Net-work gets high liquidity and execute trades very quickly & instantly without getting re-quoted.
Most Traders ask which is the best between the Best Gold Trading STP Broker and the Best Gold Trading ECN Broker? and What is the difference between these two?
Best Gold Trading STP Broker
Has multiple liquidity providers, but selects the best at any one time automatically for the trader. Therefore when a trader places a trade the xauusd orders will be passed direct to this inter-bank.
Therefore Best Gold Trading STP Broker is like Best Gold Trading ECN Broker the only difference is that the Straight Through Processing Brokers automatically chooses the best one at that particular time and does it automatically for the trader.
Best Gold Trading ECN Broker
Has many liquidity providers from which a trader will see all at same time and choose which to trade, It is like having 10 xauusd brokers to choose from which to trade.
The Best Gold Trading ECN Broker a trader will have to look at many streaming quotes at the same time and select one, this streaming gold trading quote will have varying spreads & a trader selects the low spread.
There is no much difference between Best Gold Trading ECN Broker and Best Gold Trading STP Broker, that is why some traders or some brokers will use the term interchangeably, because the only difference between Straight Through Process execution from the Electronic Communication Network execution is that the Best Gold Trading STP Broker only chooses to have only one Gold Trading Liquidity Provider while Best Gold Trading ECN Broker implements a wide variety of liquidity providers and it is up to the trader to select which Gold Trading Liquidity Provider to select from while trading.
According to reviews, these brokers are also have the low spreads, therefore if you are looking for the low spreads it is good to choose an Best Gold Trading STP Broker.
Most online gold brokers do not want to clutter the traders workspace with multiple gold trading streaming gold quote from various different places which may confuse the trader, especially the novice gold traders who do not know what is what, that's why most gold brokers might be Best Gold Trading ECN Broker but only choose to display only one streaming quotes from only one interbank, therefore becoming more of an Best Gold Trading STP Broker rather than an Best Gold Trading ECN Broker, but the model of operation is basically one & the same.
If you were to open a gold trading account with an Best Gold Trading ECN Broker you would get like 10 quotes of Gold from different banks and to trade you would have to chose the gold trading quote from one of these banks. 10 xauusd price quotes for gold would make your gold trading platform workspace too crowded (An Best Gold Trading ECN Broker Lists Spreads from many liquidity providers). Another thing is that you would need a more complex gold platform to stream these multiple xauusd price quotes, this type of platform would not make the best platform to trade with. Furthermore if you open an Best Gold Trading ECN Broker account you will have to pay additional commissions on top of spreads. This is also another reason why to choose Best Gold Trading STP Broker since unlike Best Gold Trading ECN Broker, Best Gold Trading STP Broker do not charge commissions. This means that the Best Gold Trading ECN Broker is not the cheapest execution method & will charge traders extra commissions adding onto your transaction costs.
Best XAUUSD Trading STP Brokers offer the best liquidity conditions for clients to make trades
Best Gold Trading STP Brokers do not have a dealing desk and therefore this provides for full trade transparency, faster and better order fills. The full transparency means this type of gold broker does not create an artificial market for clients, but instead shows a trader the realtime data gold quote from an electronic network of banks & allows the trader to enter the true market conditions created by the various gold market participants.
Straight Through Processing - is the name given to brokers that: upon receiving of a client order they will pass on the gold orders directly to the network of banks & as such there is no intermediary who will be involved in the order execution in other words the Straight Through Processing Execution will not be filtering orders through a Dealing Desk. The absence of a Dealing Desk is what makes the electronic communication network the best choice for many traders.
With absence of such an intermediary process such as the gold trading dealing desk the Best Gold Trading STP Broker is able to process its clients gold orders without any delay. In addition these brokers don't send requotes to their clients something that most Gold Trading traders regard as a huge advantage.
This also enables the Straight Through Processing Brokerages to allow its clients to trade during the release times of financial news without any restrictions. Other online brokers might not have the liquidity of an Best Gold Trading STP Broker & might in turn lock out trading for a few minutes before & after a news release.
Gold Trading Straight Through Processing Brokers provide the best 24-hour execution & access to order execution due to high internal liquidity rate & reliable inter-bank partners they have.
Difference Between STP and ECN - Gold Trading ECN Meaning - Gold Trading STP Meaning
