5 Best STP Forex Brokers UK 2024

STP forex brokers use 'Straight Through Processing' of trade orders as they pass on the orders to the external liquidity providers to execute trade orders. Check which are the best STP forex brokers in the UK.

Forex brokers can be grouped under 3 categories namely ECN, STP, and Market Maker. Forex brokers can be differentiated based on the execution method they use to execute the trade orders.

The difference in market execution technique also affects the cost of trading for the traders and revenue generation for the brokers. We have thoroughly described STP/ECN trade execution model and compared it with market makers.

We have prepared the list of the top 5 best STP forex brokers in the UK to help traders in selecting the best brokers for themselves.

What are STP Brokers?

STP, which stands for “Straight Through Processing,” refers to a type of forex or CFD broker that directly sends client orders to liquidity providers without any interference or dealing desk involvement. In essence, when a trader places an order with an STP broker, the order is transmitted directly to the interbank market or other liquidity providers for execution.

Essential characteristics of STP brokers include the absence of a dealing desk, ensuring transparency in price quotes and execution, and the lack of a conflict of interest between the broker and the trader’s profitability. As STP brokers do not take the opposite side of their clients’ trades, their revenue usually comes from the spread or a small commission on each trade.

STP execution often results in faster trade execution compared to brokers with internal processing through a dealing desk. However, it is important to note that not all brokers claiming to be STP brokers operate in the same manner. Traders should conduct thorough research, read reviews, and verify the broker’s regulatory status to ensure they are dealing with a reputable and genuine STP broker.

The following are the best brokers in the UK that use the STP method for trade execution. There are several brokers in the UK that use the STP execution technique. We have selected these brokers based on more than 12 factors that can affect the trading experience in the UK. These brokers are listed in an unranked order.

#1 Pepperstone – Best STP Broker with Multiple Trading Platforms

Regulation: Pepperstone UK Limited is the legal entity of Pepperstone regulated by the FCA under license number 684312. They are also regulated by ASIC in Australia, BaFIN in Germany, DFSA in Dubai, CySEC in the European Union, CMA of Kenya, and SCB of the Bahamas. Pepperstone can be considered safe to trade forex and other CFDs in the UK.

Fees: Pepperstone offers two types of accounts with different pricing structures. The Standard account is a spread-only account with spreads starting from 0.7 pips. The Razor account involves the trading commission of $3.5 per side for a standard lot apart from the spreads that are as low as 0.1 pips.

The average typical spread for EUR/USD at Pepperstone is 0.17 for the Razor account and 0.77 for the standard account.

Trading Conditions: Pepperstone offers different configurations of trading accounts to suit the trading conditions of various traders. They also offer GBP as the base currency of the account.

Pepperstone supports all three major trading platforms namely MT4, MT5, and cTrader. This is a major advantage of choosing Pepperstone in the UK as traders can select the best-suited platforms for themselves.

#2 eToro – Best non Dealing Desk Broker for Copy Trading

At eToro, trade orders involving CFDs on forex pairs are processed through liquidity providers as STP processing. eToro does not take the other side of the trade and does not earn revenue from the losses made by the traders.

Regulation: eToro (UK) Ltd is an FCA-regulated financial service provider with reference number 583263. They are also regulated by CySEC and ASIC and can be considered safe for trading in the UK.

Fees: They offer a single account type that involves spread and swap fees as the only trading fees. The average typical spread for EUR/USD currency pair at eToro is 1.1 pips. They do not charge any trading commission apart from stocks.

Among the non-trading charges, eToro charges a withdrawal fee of $5 on each withdrawal regardless of the method used. They also incur monthly inactivity fees of $10 if no trade orders are placed in 12 consecutive months.

Trading Conditions: eToro allows trading on its proprietary trading platform and does not support any other platform like MT4, MT5, or cTrader. Their trading platform is user-friendly, and resourceful, and offers a convenient copy trading service.

eToro allows trading on more than 2500 stocks, 49 currency pairs, 76 cryptocurrencies, etc.

#3 XTB – Best FCA-regulated STP Forex Broker in the UK

Regulation: XTB Limited is regulated by the Financial Conduct Authority of the UK under license number 522157. They are also regulated by several other financial regulatory authorities globally.

Fees: XTB offers standard and swap-free account types with slight differences in the spreads. The spreads with the Standard account start from 0.5 pips while the lowest spread with the swap-free account is 0.7 pips. The average typical spread for EUR/USD at XTB is 1.2 pips which is slightly higher than some of the peers in the UK.

Trading Conditions: XTB allows trading on a proprietary trading platform called as xStation which is available on all types of devices. It is a user-friendly platform with limited patterns and indicators. The platform allows clients to trade on more than 2100 financial instruments.

#4 ETX Capital (OvalX) – Best Low Spread STP Forex Broker

Regulation: ETX Capital is the trading name of the legal entity Monecor Limited regulated by the Financial Conduct Authority (FCA) of the UK. It is one of the oldest forex brokers in the UK that uses the STP model for the execution of trade orders.

Fees: They offer a single account type with spreads-only trading fees. The average typical spread starts from 0.6 pips which are among the lowest in the UK. They also support trading accounts with GBP as the base currency.

Trading Conditions: Traders can choose between the most widely used MT4 platform and a proprietary platform called ETXTrader which is now renamed OvalX.

Both Platforms allow traders to trade on more than 6000 financial instruments including 79 currency pairs.

#5 FXTM – Best Overall STP/ECN Forex Broker in the UK

Regulation: Exinity UK Limited is a legal entity of FXTM that is regulated by the Financial Conduct Authority of the UK under license number 777911. They are also regulated by the FSCA of South Africa, CySEC of EU, and FSC of Mauritius. They also have a local office in London.

Fees: FXTM offers 3 types of accounts namely Micro, Advantage, and Advantage Plus with different trading conditions.
The Micro account is an STP account that can be opened with GBP 10 minimum deposit and involves no trading commission with spreads starting from 1.5 pips. This account does not give access to stock CFDs.

The Advantage account is an ECN account and requires a minimum deposit of GBP 500. The spreads are as low as 0.1 pips with this account but it also incurs a trading commission of $0.4 to $2 based on volume.

Trading Conditions: The Advantage Plus account is an STP account that also requires a minimum deposit of $500 and no trading commissions are involved with this account. The spreads are lower than that with the Micro account.

FXTM uses MT4 and MT5 trading platforms for trading on all types of devices. They offer a rich variety of tools that can enhance the trading experience.

Difference Between STP, ECN, and Market Maker Forex Brokers for Traders

1. STP stands for Straight Through Processing and is a method to execute trade orders in forex and CFD trading. In this method, the trade orders placed by the clients on trading platforms are passed on to external liquidity providers. STP brokers have no dealing desk (NDD) and they earn revenue from spreads and/or trading commissions.

   The liquidity providers can be banks or large financial institutions that execute the trade orders made by the clients. Brokers that use the STP method for order execution do not earn revenue on losses booked by traders.

2. ECN stands for Electronic Communication Network which is an order-matching software program that automatically matches the orders placed by the clients.

   Brokers that use this method generally offer very low spread and trading commissions. ECN system is also used by a few liquidity providers to execute trade orders.

3. A Market Maker cannot be considered a broker as it can either match trade orders with other orders or can also take the other side of the trade. A market maker can offer trading services either at a low or high spread with or without commission. Market makers have a dealing desk.

   A market maker can earn revenue on the losses of traders apart from the spreads and commissions. The profits for the traders can be losses for the market maker.

If we sum up the basic difference between STP/ECN broker with a market maker, we can conclude:

• STP brokers are more trustworthy as they do not earn on traders’ losses. Some market makers may also advertise themselves as STP to gain the trust of traders.
• FXCM was banned by the CFTC in the USA in 2017 because they promoted themselves as a non-dealing desk STP broker but had an undisclosed interest as a market maker.
• Brokers with the STP execution method will have no risk from scalping or algorithmic trading strategies of short tenures.
• Market makers can make a profit on the losses of traders while STP brokers will only earn through spreads and commissions on trade orders.
• A Market maker generally earns more than the STP/ECN broker.
• MT4, MT5, cTrader, or any other platform can either be used by STP/ECN brokers or market makers.
• There is no major difference in trading experience with a market maker or STP/ECN broker. Many traders do not even know whether their trading service provider is STP/ECN broker or a market maker.

How do you know if a broker is STP?

If you wish to only trade with an STP broker, the first step is to check whether the broker is STP or a market maker. This is a tricky task as some market makers do not want traders to know that they are market makers.

There are multiple ways in which traders can ensure that the broker they have chosen is STP/ECN and not a market maker.

1. Regulation
If a broker is regulated by top-tier regulators like FCA in the UK, it does not ensure that it is an STP broker and not a market maker. There are several FCA-regulated brokers in the UK that are market makers and make revenues on the losses booked by clients.

However, the customer support service executives of the FCA-regulated brokers in the UK are generally honest with their trade execution techniques. Their regulatory license can be revoked if they lie to their traders about the trade execution method and the proof is presented to the regulatory authority. FCA-regulated market makers are very likely to accept that they are market makers.

2. Execution Speed
By checking the journal on the trading platform, traders can note down the time taken for the trade order to get executed. The execution speed for the STP brokers is faster compared to market makers. If the trade execution speed is between 80 ms to 120 ms, it is most likely an STP broker. Faster execution of trades also reduces the slippage risk.

3. Transparency
In general, STP brokers are more transparent with their clients about the trade execution summary. Traders can check the order book summary at the STP broker and find out proof of trade execution through a bank or liquidity provider from the best available price. Market makers do not provide such details to the clients.

4. Spread
Since the market makers can make revenue from the losses of traders, the spread is not the only source of revenue. For STP brokers spreads are the major source of revenue. Hence, in general, a market maker may offer narrower and more attractive spreads to traders. However, it is not mandatory that each market maker will have a lower spread compared to the STP brokers. Some STP/ECN brokers have lower spreads than market makers.

How to Choose an STP Forex Broker for Trading?

There are many brokers in the UK that use the STP method for trade execution. For a better trading experience, traders must check and compare multiple aspects for STP brokers in the UK. The following are the major aspects that must be considered while choosing STP brokers in the UK.

Regulation

It is important to check the authenticity of the regulatory license held by the broker. FCA is the financial regulatory authority in the jurisdiction of the UK. It is important to ensure that the brokers you are about to choose are regulated by the FCA in the UK.

STP brokers as well as market makers can get a regulatory license from the FCA. Traders need to check their website and ask through the customer support service about the market execution technique. Multiple regulatory licenses from top-tier regulatory authorities like ASIC, FSCA, etc can further increase the safety ratings of a broker.

Fees

Each STP broker in the UK will incur different trading and non-trading fees. Traders must check and compare the fees and commissions charged by the brokers. Brokers with STP/ECN execution have low spreads and can also charge commissions for even lower spreads.

Trading Platform

All trades are executed through trading platforms and it is important to check whether you are familiar and comfortable with the available trading platform or not. An STP/ECN broker or market maker may offer the same trading platform but can have different execution methods. MT4 and MT5 are the most chosen trading platform in the UK but some proprietary platforms like eToro and Plus500 are also preferred by many traders.

Customer Support

Customer support services can greatly affect the trading experience at any broker. Traders can test the quality of support services by raising random queries through live chat, email, or phone before opening their accounts. Brokers with local phone support services are more trustworthy.

Deposit and Withdrawal

Deposits and withdrawals are major concerns for a forex trader. Traders must choose a broker that offers fast and convenient deposits and withdrawals. Most brokers are fast with deposits but take a longer time to process the withdrawals. It is always good to test the deposits and withdrawal services with a small amount at the initial stage.

The fees associated and the time taken to process the transaction is different for each broker. Traders must check these details before opening their accounts.

Advantages of STP Execution in CFDs

STP execution is intended to offer several advantages:

Faster Execution: Orders are processed quickly since they’re sent directly to the market without intermediaries.

Transparency: Traders can see the real-time market prices and execute trades at those prices, increasing transparency and reducing the potential for manipulation.

No Conflict of Interest: With STP, the broker doesn’t take the opposite side of the trade, eliminating the conflict of interest that may arise with dealing desk models.

Potentially Tighter Spreads: Since trades are executed at the best available market prices, traders may experience tighter spreads, which can reduce trading costs.

Reduced Slippage: STP execution can help reduce instances of slippage, where trades are executed at a different price than expected due to market volatility.

Comparison of Best STP Forex Brokers UK

FAQs on Best STP Forex Brokers UK