XM has two types of ordering methods: STP and ECN. STP accounts and ECN accounts have different transaction costs such as commissions and spreads, and each has its own merits and features. We will introduce the features, advantages and cautions of XM’s STP account and ECN account.
- Which is better, STP or ECN account?
- What is an STP account?
- What is an ECN account?
- Difference between STP and ECN accounts
- Features of STP accounts
- Features of ECN accounts
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 type||Standard account||micro account||KIWAMI pole account||zero account|
|Maximum leverage||1,000 times||1,000 times||1,000 times||500 times|
|Minimum deposit amount||$5||$5||$5||$5|
|Bonus||New account opening bonus deposit bonus|
|New account opening bonus|
|New account opening bonus||New account opening bonus|
|Amount of currency in 1 lot||100,000 currency||1,000 currencies||100,000 currency||100,000 currency|
|Minimum order quantity||0.01 lot||MT4: 0.01 lot (10 currencies)|
MT5: 0.1 lot (100 currencies)
|0.01 lot||0.01 lot|
|Maximum number of orders||50 lots||100 lots||50 lots||50 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 stocks||Same as left||Same as left||Same as left|
|transaction fee||free||free||free||$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
|contract power||Strong when trading volume is low||Strong when trading volume is high|
|Board information||Not see||can see|
|Minimum transaction quantity||small||big|
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.
STP accounts have wider spreads than ECN accounts. This is especially disadvantageous for traders who mainly do scalping.
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.
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.
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.
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.