How forex brokers operate

A forex broker gives you access to currency pairs and executes your trades, earning from spread, commission, or both. Some pass orders to liquidity providers; others act as the counterparty.

The execution model affects pricing, slippage, and conflict-of-interest considerations.

Execution models

Common models include STP (straight-through processing), ECN (electronic communication network, often with commission), and market maker (broker acts as counterparty).

Each has trade-offs in cost, transparency, and slippage. The broker profile lists the model where provided.

  • STP: orders routed to liquidity
  • ECN: often commission-based, transparent
  • Market maker: broker is counterparty

What to compare

Look at spread/commission, platform, leverage limits, regulation, and instrument range. Use the comparison tool once you have verified figures.

Sample records in our directory show the field layout but contain no real broker data.

Match the broker to your market. A great forex broker may not offer the stocks or crypto you also want.

Frequently asked questions

What is the difference between ECN and STP?
Both route orders externally, but ECN typically aggregates multiple liquidity sources with commission pricing, while STP sends orders to a provider. Definitions vary by broker.
Why does execution model matter?
It affects cost, transparency, and potential conflicts. Understanding the model helps you interpret spreads and slippage.