STP: Straight-Through Processing
Also known as: STP, STP broker, straight through processing, A-book routing
What is it?
Straight-through processing is an order-routing model in which your trade passes automatically from your platform to an outside liquidity provider, with no human dealer and no broker book standing in between. The contrast is with a dealing desk, which takes the other side of your trade and therefore profits when you lose. An STP broker instead earns from a markup on the spread or from a commission, so its revenue scales with how much you trade rather than with how badly you do.
Straight-through processing vs a dealing desk
STP (A-book)
- Your order is passed to an outside liquidity provider automatically
- The broker earns from a spread markup or commission, not from your loss
- No dealer can reject or delay the order, so requotes disappear
- You meet the real book, so thin conditions produce slippage instead
No conflict of interest, but no cushion against a thin book either.
Dealing desk (B-book)
- The broker takes the other side of your trade and holds the risk
- Its revenue can rise when your account falls
- Fixed spreads are possible, and requotes are the usual rejection
- Fills are a broker decision rather than a market outcome
Tighter fixed pricing on small trades, at the cost of an opposed interest.
A liquidity provider might quote EUR/USD at 1.08420 by 1.08428, and the broker passes it on at 1.08417 by 1.08431 - the same 0.8-pip market, with a 0.6-pip markup, and nobody reviewing the order on its way out. What that buys you is the removal of dealer intervention: no requotes, no manual delay on a profitable account. What it does not buy you is liquidity that is not there.
Because your order meets the real book, a large order in thin conditions gets filled deeper rather than rejected, so slippage replaces requotes as the thing to watch. It is also worth knowing that STP has no single standard and is a marketing term as often as a technical one - a broker can route some flow externally and internalise the rest, which is why the slippage statistics matter more than the label.
Why it matters: STP routing sends your order to an outside liquidity provider rather than the broker's own book, so slippage replaces requotes as the execution problem to watch.
The routing model decides whether an unfilled order comes back as a requote or as a worse fill, which changes how an automated strategy should handle rejections.
Real-world example
A liquidity provider quotes EUR/USD at 1.08420 by 1.08428 and the STP broker passes it on at 1.08417 by 1.08431 - the same market, a 0.6-pip markup, and no dealer between the two.
How SignalBots handles it
SignalBots connectors place orders through your own broker account, so whichever routing model that broker runs is the one your automated entries inherit. See /risk-warning.
Pro tip
Judge routing by the broker's published slippage statistics rather than by the label. Every broker's marketing uses the word STP, and it describes plumbing rather than quality.
Common pitfalls
Reading no requotes as no slippage. STP removes the dealer's ability to reject an order; it does not create liquidity that was never in the book.
Frequently asked questions
What is the difference between STP and ECN?
STP routes your order to one or more liquidity providers the broker has chosen. An ECN places it into a shared pool where other participants' orders can match against it, which usually means raw spreads plus an explicit commission rather than a markup.
Is an STP broker always better than a market maker?
Not automatically. STP removes the conflict of interest, but a well-run market maker can offer tighter fixed spreads on small trades. What matters is the all-in cost and the fill quality you actually measure on your own account.
Does STP mean my broker cannot see my stop-loss?
No. Your stop is held on the broker's server in either model, because it is an instruction to your account rather than an order sitting in the market. STP concerns where the resulting trade is routed once the stop triggers.
Why do I still get slippage with an STP broker?
Because you are meeting the real book. If the size available at the best price is smaller than your order, the remainder fills at the next available price - a genuine market outcome rather than a broker decision.
How can I tell whether my broker really routes STP?
You cannot verify it directly from a retail account, but you can measure the symptoms: track positive as well as negative slippage over a few hundred trades. Slippage that is consistently one-directional is a reason to ask questions.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
