Which is Better, STP or DD? This Is Why It’s Hard to SayIt is often assumed that brokers who are market makers, also referred to as dealing desk brokers are never a good choice for traders, and that STP brokers are both the best alternative and the only option. We’ve covered the concept of STP in a previous article where we pointed out that such a comparison is subjective. In essence, it really depends on many criteria: trading style, account size, and experience to name a few. To get to the core of the subject though, it really comes back to the profile of the trader, which like every individual, is unique. Atomiq Consulting remains neutral in the forex industry, offering services to all participants, from brokers, to liquidity providers, all the way to traders. For this reason, we are able to offer an objective viewpoint about the pros and cons to both types of trading.
Advantages of STP Trading
- The broker is passing the risk away; anonymous trading.
- Orders are normally not rejected.
- Great for short term strategies, EAs, and scalping strategies.
Disadvantages of Straight Through Processing Brokers
- Slippage is often more common.
- Trading around news events is more difficult.
- Slower execution speed.
- Spreads can widen out.
Advantages of Trading with a Market Maker
- Less slippage and better execution
- Fixed spreads (Spreads do not widen)
Disadvantages of Dealing Desk Models
- Sometimes orders are rejected outright
- EAs and short term scalping strategies are often not permitted
- Concern that the broker is targeting your account specifically
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