Resources

STP, ECN and DD Forex Brokers

NDD — No Dealing Desk — NDD Forex brokers provide access to the interbank market without passing orders trough the dealing desk. With true No Dealing Desk brokers there are no re-quotes on orders and no additional pausing during order confirmation. This, in particular, allows trading during news times with no restrictions on trading.
An NDD broker can either charge commission for trading or choose to increase the spread and make Forex trading commission free.
No Dealing Desk brokers are either STP or ECN+STP.

STP — Straight Through Processing — STP Forex brokers send orders directly from clients to the liquidity providers - banks, which trade on the Intebank. Sometimes STP brokers have just one liquidity provider, other times several. The more there are banks and liquidity in the system, the better the fills for the clients.
The fact that traders have access to the true market and can execute trades immediately without dealer intervention is what makes the platform STP.

ECN — Electronic Communications Network — ECN Forex brokers additionally allow clients' orders to interact with other clients' orders. ECN Forex broker provides a marketplace where all its participants (banks, market makers and individual traders) trade against each other by sending competing bids and offers into the system. Participants interact inside the system and get the best offers for their trades available at that time. All trading orders are matched between counter parties in real time. A small trading fee - commission - is always applied.
Sometimes STP brokers are discussed as if they were ECN brokers. To be a true ECN, a broker must display the Depth of the Market (DOM) in a data window, let clients show their own order size in the system and allow other clients to hit those orders. With ECN broker traders can see where the liquidity is and execute trades.

You can learn more regarding different currency brokerage firms by visiting the www.100forexbrokers.com site.