How do ECN & STP Forex Brokers work?
An Electronic Communications Network (ECN) or Straight Through Processing (STP) broker will relay all of the trades it gets directly to its “liquidity providers”, who are other market participants such as banks. In Netherlands they are known as “no dealing desk” brokers. When trading on an ECN or STP Forex broker in Netherlands, a trader is not trading against that operator. That means that there isn’t a conflict of interest between the trader and operator.
ECN and STP Forex brokers typically have low spreads, but will charge a commission for each trade. They also will often require Dutch to make a high deposit to get started. This means that ECN and STP accounts are for the most part just available for experienced and professional traders in Netherlands.