The overseas FX company xmtrading offers two types of order methods, STP and ECN, but there are differences between them. STP accounts and ECN accounts have different transaction costs such as commission and spread, and each has its own advantages and features. Here is a summary of the features, advantages, and points to note for XM’s STP and 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 |
| Spread | Fluctuation | Fluctuation | Fluctuation | Fluctuation |
| 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 trading bonus | New account opening bonus deposit bonus trading 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
| STP | ECN | |
| transparency | high | quite expensive |
| Spread | wide | narrow |
| transaction fee | free | Paid |
| contract power | Strong when trading volume is low | Strong when trading volume is high |
| leverage | high | low |
| 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.
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. Although you cannot change the account type under the XM brand, you can log in and add a no dealing desk format to hold a different type. If you want to narrow the pips and spreads on a wide range of stocks, foreign exchange, virtual currencies, etc., Kiwami is recommended. The high leverage keeps the required margin low. It is advantageous for withdrawals. Basically, it is easy to make a profit, so it is safe.
low transaction costs
XM’s Zero Account (ECN Account) incurs a transaction fee (10 dollars round trip/100,000 units). However, the system currently has narrow spreads, so total transaction costs can be reduced. This allows investors to make decisions and take advantage of opportunities. You can earn profits efficiently in total. Take advantage of the special offer and trade with a new pair you’re interested in.
high commitment
In the case of STP, the performance of the server etc. has a big influence on the contract power, but in the case of ECN accounts, the contract power is determined by the liquidity of the trading currency. The time period of the indicator is dangerous, but if you have the knowledge, 100% contract will be made. Enter the amount according to the situation. Also check the economic news from the official site. You can aim for considerable profits from the first time in the industry, whether in demo or real.
Slippage is less likely to occur
In ECN accounts, because the FX company does not intervene in buy and sell orders, there tends to be less discrepancy between the price at the time of the order and the price at which the transaction is actually concluded. Get to know the features and reduce the risk of loss before you start. Usually, you can trade multiple target stocks by clicking. XM also offers cashbacks, so make use of them at the same time.
less bonus
STP accounts can take advantage of all four types of bonuses. On the other hand, Zero accounts (ECN accounts) only have the new account opening bonus. It is best suited for advanced investment types, and as a result, it has fewer bonuses, but it does have additional loyalty programs. It’s easy to choose and get started.
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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