Facts about STP Trading Advantages

There are many challenges faced by profitable Forex traders, that all traders should consider when choosing their ideal broker for their investments.

As an estimated 85% of retail Forex brokers are Dealing Desk brokers (market makers), profitable traders are at an extreme disadvantage due to the fact this broker model makes money when clients lose and lose money when client’s win.

The most common trading strategies to be affected the most are Scalpers, News Traders and Day Traders, and the reason is because these strategies can be very profitable, and executed by trading robots (EA’s), meaning that any trader can make profits trading the Forex markets. When an EA or manual trading strategy is profitable, a dealing desk broker losses money, and can often implement restrictions to ensure that the trader’s profit is limited, limit the ability to trade using these strategies or even disqualify the trader completely.

To combat this, profitable Forex traders choose to trade at STP/DMA brokers as there are no conflicts of interest. STP brokers make money on the spread or ECN commissions only, and do not make money on client’s losses, giving traders a level playing field and a fair chance in the markets. Below are some of the key facts about trading with a True STP Broker:

Trades
Traders are placed with liquidity providers, often tier-1 banks and ECN’s to ensure no dealing or intervention on your trades.  Identifying an STP broker can be tricky, look for 5-digit pricing, market execution and variable spreads.

Trading Conditions
STP brokers offer neutral prices that mirror the global (real) market conditions. You will benefit from more competitive pricing (tighter spreads), no-requotes and price improvements (positive slippage). There will be no restrictions or limitations for scalping, hedging, news trading and HFT’s.

No Conflicts
STP (DMA or ECN) brokers have no conflicts of interest with their client’s trading activity. You can be confident that your trades won’t be manipulated for the broker to have odds stacked in their favour as it would be with a dealing desk broker.

Advanced Forex Trading
Highly sophisticated and profitable trading systems are extremely sensitive to many market aspects. So anonymous trading highly recommended. Anonymous trading ensures that the liquidity bank or ECN (execution venue) doesn’t have access to any details about the trader and his/her orders. This includes protecting how the client is trading (manual or EA), having pending actions hidden (SL/TP/Pending Orders) and of course no history on the trader’s past, profitability or strategy.

In conclusion, there is clear proof that trading with an STP broker is highly beneficial for profitable traders, EAs or strategies. We would like to invite all interested traders to review the Yadix STP Broker services and benefits to learn more: https://www.yadix.com/about-us/stp-forex-model/

Non Farm Payroll Alert

The U.S Non-Farm Payrolls will be released Friday, 5th of April 2019 12:30 GMT and is a key economic indicator that can cause volatility in the markets.

What to Expect this Month?

Non-farm payrolls are expected to add 180,000 workers for March, this follows 20,000 in February. Manufacturing employment should rise by 10,000, up from 4,000 in February and the unemployment rate is expected to be stable at 3.8%. Average hourly earnings are forecast to gain 0.3% on the month, down from 0.4% in February stabilizing the yearly rate to be 3.4%. 

The markets are keen to learn whether February’s dramatic drop to only 20,000 new jobs was a blip or as a more concrete sign of weakness in the US economy, this will be reflected in another month of weak statistics, below the estimated 180K as fore casted. During the past five years the lowest months reports were 2018, 108,000 in September; 2017, 18,000 in September; 2016, 15,000 in May; 2015, 77,000 in March and 2014, 168,000 in February, and on each occasion the following two months delivered better than expected results.

For the past two years, the markets have seen some of the strongest job creation reports for many years, particularly in the manufacturing sectors, however there are several trade and economic issues including negotiations between US-China, the U.K’s withdrawal from the EU and an evident slowdown in global growth that could encourage caution and delayed hiring processes for big companies.

So far, February’s poor figures have not influenced trends dramatically and for the labour markets, there is no evidence that the current trend could change dramatically. However, another report under the expected figures may cause a change in direction. On the other hand, a strong US jobs report could indicate for at least one Fed rate hike this year.

Opportunities Around the NFP Reports:

Regardless of the results of the Non Farm Payrolls, the markets always experience moves immediately after the release which offer traders excellent short-term trading opportunities. Positive or negative reports will affect market sentiment which can create new trends and trading opportunities.