STP Forex – Straight Through Processing
What is STP?
STP acronym means “Straight-Through Processing”, which can be translated as “processing directly.” This concept is relatively new in the capital market, and it appeared only by the desire of investors around the world to a more reliable solution of orders placing.
Why do we need STP technology?
When placing orders, there is a risk-called “calculated risk” – which investors are trying to eliminate by STP. In order to understand what lies behind the settlement risk, let’s consider a very simplified example.
Let’s say you want to transfer from your bank account X amount of dollars to a USD bank account Y. However, your bank account X is denominated in Swiss francs SWF. Bank transfer usually takes 3 days. Over the three days, USD/SWF course can change dramatically (which probably will happen). Change can occur in your favor or against you, and in the end to put the required amount of USD, your account will be debited SWF, different from the one you originally calculated. In this case this uncertainty is a calculated risk in this case.
Thus, the settlement risk associated with the delay in complying with the transaction. In the case of a bank delay is caused by the fact that the bank’s employees have to check all the details to get through to banks and brokers, etc., and in the case of trading FOREX, the delay is due to the fact that the dealer have to process your transaction.
Though on the FOREX, delay is much less – not days, but seconds, it is still there. But when trading with large volumes and, especially, with high leverage, each item is important in the quote currency. We all saw how easily the price can change by tens of items!
STP accounts are designed to minimize as possible settlement risk. When submitting a request for placing orders and dealer signal passes through a specially tuned “bridges” and other patented technologies, it’s delivered directly to the liquidity provider, which instantly processes the order for the automatic level. Hence the name “Straight-Through Processing”. Such an approach to the processing of orders allows the company Forex4you greatly increase the speed of execution.
The advantages of STP technology:
- Perfect for managing large deposits on which even the slightest price movement you will feel. This assures that you not only enter at the price existing at the time of order opening, but also you will receive the best price due to Slippage Control.
- Suitable for expert advisors, for whom the order processing speed is critical, as it directly affect their work and profit.
- The best option for scalping! Given that scalping implies taking frequent but small profits, it is very important to quickly enter and exit the market, so that the price wouldn’t change between order opening and execution.
We can guarantee that the Pro STP account will give you direct access to the interbank market! No hybrid schemes!
Pro STP account conditions are based on transparency and trust. On Pro STP accounts liquidity is provided by FCStone and Sucden Financial, which give the best quotes from major banks using such prime brokers, as Deutsche Bank, Rabobank and JP Morgan.
The transaction model on the Pro STP server:
You get quotes directly from the largest banks, while we give you the best possible price.
- In the trading terminal, click “buy” or “sell” after setting all order details
- Your order request is sent to the Forex4you server
- Then the Bridge technology provided by Integral comes into action. Three large liquidity providers that we work with give their price quotes for your order.
- The prices are sent via the FIX Protocol (fully secure connection), via the bridge, many times per second, without stopping (so that you could receive the price quote right after your order, in no time)
- You get the trading result in the form of the best price at the time of submitting your order. You can also get prices without slippage by using our Slippage Control function
- Your order is executed immediately. The average STP execution speed for today.
The process described above will take you no more than half second. Moreover, after setting the order details and by using a special script One Click Trading you can submit your trading operations by one click, without re-setting the order details every time.