What is ECN Forex Broker?
Almost all Forex brokers today have ECN an STP accounts available to traders. What are these mysterious words stand for and why the trading conditions for these accounts are so much more attractive than the regular terms? ECN is an abbreviation of Electronic Communications Network, while STP is a short form of Straight Through Processing. In other words, we are talking about No Dealing Desk or in very short way NDD brokers.
There is not much difference between the three terms mentioned above. All three of them, ECN, STP and NDD, means that your trades are executed through an automated system, which pairs purchase and sell orders for securities. ECN Forex connects you with other traders, or 3rd party major brokers so that you can trade directly without having to go through a middleman.
Non-ECN brokers, on the other hard, are those who take the other side of your trade and therefore basically trade against you. These brokers usually do their best to hide their true nature and are referred to as dealing desk brokers or market makers, because they create an illusion of a market.
In most cases, ECN brokers offer fantastic trading conditions, especially in terms of low spreads, compared to market makers. There is, however, a commission fee on trade entries and exists. Most of the time, the commissions are calculated in percentage (like 8%, for example), and despite the fee, the end result is still lower than the spreads charged by non-ECN brokers.
ECN brokers are extremely attractive to traders due to its nature of transparency an low spreads, however the initial deposit requirement is usually much higher than the regular accounts. Right now, let's go over the advantages and disadvantages of ECN account in full detail review, so you can figure if ECN account is suitable for your needs or you better of with the regular dealing desk account.
|Broker Reviews||Rating||Demo||Leverage||ECN||Platforms||Min Deposit||Payments|
|OctaFX||9||yes||1:500||yes||MetaTrader 4, Metatrader 5, cTrader||50||Neteller, Skrill, Fasapay, Visa, Mastercard, Malaysian, Vietnamese, Indian, Indonesian, Bangladeshi local banks, Bitcoin, Unionpay|
|LiteFinance||8||yes||1:500||yes||Metatrader 4, Metatrader 5, WebTerminal||10||Skrill, Webmoney, Bitcoin, Advcash, Credit Card|
|InstaForex||7||yes||1:1,000||yes||MetaTrader 4, Metatrader 5, Webtrader||1||Some local Bank transfers, PayCo, AstroPay, Cryptocurrency|
|FxPro||5||yes||1:500||yes||FxPro cTrader, FxPro cTrader Web, MT4 Client Terminal, MT4 MultiTerminal, MT4 WebTrader, MT4 Premium||100||Credit/Debit Card, Bank Wire, PayPal, Neteller, Skrill|
|Dukascopy||4||yes||1:500||yes||Dukascopy||250||Wire, Bank Guarantee, Standby letter of Credit Segregated Accounts|
|Forex.com||4||yes||1:200||yes||ForexTrader platform (in-house), MetaTrader 4||50||wire transfer, Credit/Debit Card, Check|
|IronFX||4||yes||1:500||yes||Metatrader 4||100||credit cards, Fasapay, neteller, qiwi, skrill, webmoney, wire transfer|
|Blueberry Markets||4||yes||1:500||yes||MetaTrader 4||100||credit cards, wire transfer, POLi, Skrill|
|FXDD||3||yes||1:200||yes||MetaTrader4, FXDD Trader, Power Trader, FXDD Auto, MTXtreme||100||Wire, PayPal, Check, BPS|
|FP Markets||3||yes||1:500||yes||MetaTrader 4 (MT4), IRESS, Mobile trading||200||credit cards, UnionPay, Neteller, Skrill (3% fee), Wire transfer, BPay and broker-to-broker transfer|
|Tickmill||3||yes||1:500||yes||MetaTrader 4, Webtrader||100||wire transfer (commission are charged), credit/debit cards, Skrill, Neteller, FasaPay, UnionPay and WebMoney|
|TenkoFX||3||yes||1:500||yes||MetaTrader 4, Webtrader||10||Skrill, Neteller, FasaPay, Webmoney, Yandex Money, Qiwi|
|Z.com Trade||3||yes||1:200||yes||Z.com trader web, Z.com trader pro (demo account only)||1||credit cards, wire transfer, china unionpay, skrill|
|Freshforex||3||yes||1:1000||yes||Metatrader 4||1||WebMoney, ePayService, Skrill , FasaPay, ADVCash, Perfect Money, Neteller, OnlineNaira NGN/USD, E-wallets for the Philippines, Visa/Mastercard/Maestro USD/EUR, Local Depositors, Bitcoin, Internet Banking|
|Pepperstone||3||yes||1:500||yes||Metatrader 4, Metatrader 5, cTrader, cAlgo, cMirror||200||bPay, credit cards, Paypal|
|TradeFW||3||yes||1:30||yes||https://www.forexexplore.com/forex-brokers/tradefw-review||0||Bank wire, Credit/Debit Card.|
|Hotforex||2||yes||1:1,000||yes||Metatrader 4, mobile platform, rapid trader fix/api||5||credit cards, skrill, Unionpay, neteller, wire transfer, webmoney, fasapay|
|Alpari||2||yes||1:500||yes||MetaTrader 4||1||Debit or Credit Card, Wire Transfer|
|FinPro Trading||2||yes||1:200||yes||Metatrader 4, zulutrade, Finopro station||5||credit cards, paypal, skrill, wire transfer|
|AAAfx||2||yes||1:200||yes||ZTP, MetaTrader 4, Binary options webtrader, Zulutrade||300||Wire, Credit Card, Skrill, Neteller, giropay, EPS, directpay24, teleingreso, ideal, qiwi, Bitcoin|
|XTB||2||yes||1:200||yes||Metatrader 4, xStation, xMobile||250||Credit cards, Neteller, Paypal, Skrill, Wire transfer|
|Anzo Capital||2||yes||1:1000||yes||MetaTrader 4||100||Webmoney, Skrill, Neteller, Credit Cards|
|Markets.com||2||yes||1:200||yes||Meta Trader 4,MarketTrader, Market WebTrader, Market Java Trader, Market Mobile Trader, Market WAP Trader, Market iTrader, Market AutoTrader||100||Credit/Debit Cards, Wire Transfer, Webmoney, Local Payments|
|eToro||1||yes||1:30; 1:1 for Crypto Currencies||yes||eToro Platform||200||Credit Cards, Debit Cards, Paypal, Neteller, Skrill, Webmoney, Wire Transfer|
|Tifia||1||yes||1:1,000||yes||Metatrader 4, webtrader||10||wire transfer, credit cards, skrill, neteller, perfect money, fasapay, okpay|
|FXOpen||1||yes||1:500||yes||MetaTrader 4||1||Wire, WebMoney, AlertPay, CashU, c-gold, PerfectMoney|
|House of Borse||1||yes||1:100||yes||MetaTrader 4||50000||credit cards, wire transfer|
|Fort Financial Services||1||yes||1:1,000||yes||MetaTrader 4, CQG, Ninja trader, binary options||5||Credit cards, webmoney, Skrill, Neteller, perfect money, fasapay, wire transfer|
|MEX Exchange||1||yes||1:500||yes||Metatrader 4||25||Neteller, Skrill, Fasapay, UnionPay, Credit Cards, Wire Transfer|
|FBS||1||yes||up to 1:3,000||yes||MetaTrader 4, Metatrader 5, Webtrading||1||credit cards, fasapay, Indonesia local banks, Neteller, okpay, perfectmoney, Skrill, Webmoney, wire transfer, Thai local banks, Exchangers, Malaysian banks and Bitcoin by Skrill|
|Synergy FX||1||yes||1:500||yes||MetaTrader 4||500||credit cards, skrill, wire transfer|
|FCI Markets||1||yes||1:100||yes||Currenex, FCI NetStation, MetaTrader 4||250||credit cards, neteller, skrill, wire transfer|
|FXGlobe||1||yes||1:500||yes||MetaTrader 4||250||Credit cards, Neteller, Skrill, Wire transfer|
|FXonus||1||yes||1:500||yes||MetaTrader 4||500||Credit Cards, Skrill, Neteller, Wire Transfer, China Union Pay|
|FXoro||1||yes||1:400||yes||Metatrader 4||200||credit cards, wire transfer, skrill, neteller, ecoPayz, CashU|
|FXprimus||1||yes||1:500||yes||Metatrader 4||100||Bitcoin, China UnionPay, FasaPay, Neteller, Skrill, Wire Transfer|
|Infinox||1||yes||1:300||yes||Metatrader 4||100||credit cards, wire transfer, skrill, neteller, china unionpay|
|Larson&Holz||1||yes||1:500||yes||Metatrader 4, Web Trader||100||credit cards, wire transfer, neteller, paypal, Yandex, liqpay, alfa click, beeline, mtc, perfect money|
|LCG||1||yes||1:500||yes||MetaTrader 4, LCG Trader (web-based, ECN accounts only)||1||wire transfer, debit/credit cards, Skrill|
|LMFX||1||yes||1:1,000||yes||Metatrader 4, Webtrader||50||credit cards, Fasapay, neteller, okpay, skrill, wire transfer|
|LQDFX||1||yes||1:500||yes||MetaTrader 4, xStation||20||Wire transfer, Credit cards, Skrill, Neteller, Unipay, FasaPay, SoFort, iDeal|
|Pricemarkets||1||yes||1:400||yes||MetaTrader 4 ECN, Currenex ECN, Integral FX, Liquid-x, Hotspot FX||500||wire transfer, credit cards|
|Roboforex||1||yes||1:500||yes||MetaTrader 4, cTrader||1||credit cards, QIWI wallet, webmoney, Yandex.money, RBK money, Skrill, FasaPay, CashU, Payoneer, China UnionPay, Neteller, Perfect Money|
|Tradersway||1||yes||1:1,000||yes||Metatrader 4, ctrader||0||Skrill, Neteller, Perfect Money, Webmoney, QIWI, MonetaRu, EasyPay, Boletto, CashU|
|TurnkeyForex||1||yes||1:200||yes||MetaTrader 4, Trade Station||5||credit cards, wire transfer, neteller|
|Oinvest||0||yes||1:200||yes||Metatrader 4||200||Skrill, Neteller, Credit Cards|
|Orbex||0||yes||1:500||yes||MetaTrader 4||500||Skrill, Neteller, Wire Transfer, Credit Cards, CashU, Webmoney|
|GrandCapital||0||yes||500:1||yes||MetaTrader 4, WebTrader||10||Credit card, Neteller, Webmoney, CashU, Fasapay, Scrill, Webmoney|
|Alvexo||0||yes||400:1||yes||MetaTrader 4, WebTrader, Mobile||5000||Cash-U, Credit Card, Webmoney, Wire Transfer|
|NSFX||0||yes||200:1||yes||Metatrader 4, Webtrader, NSFX Jforex platform||300||credit cards, Skrill, CashU and wire transfer|
|Alfa Financial||0||yes||1:100||yes||MetaTrader 4, AX1Trader||10000||yes|
|Forexee||0||yes||1:500||yes||MetaTrader 4||50||Credit Cards, Webmoney, Wire Transfer, Skrill, Neteller, Bitcoin, Bitcoin Cash, litecoin, Fasapay, etherium, Payza, Perfect Money|
|LH-Crypto||0||yes||1:500||yes||Metatrader 4, Metatrader 5||10||Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Monero, DASH, Ripple, NEO, Visa, MasterCard, Web Money, QIWI, wire transfer|
|MarketBull||0||yes1000||1:1000||yes||Metatrader 4||1000||Credit Cards, Neteller, Skrill, Bank Wire Transfer|
|GCI Trading||0||yes||1:400||yes||MetaTrader 4, ActTrader||500||Bank Wire Transfer, Credit Card, Neteller, Skrill|
Advantages of ECN Forex Brokers
Execution Speed - ECN brokers in most cases provide outstanding execution speed. Sometimes, you can even experience 0 spread. To make a comparison, consider trading with Market Maker broker where the execution may experience delays, causing you to get deep into negative slippage and basically stay in the trade you can't wait to get out from. This can happen any time during important news releases and cause you to lose money. With ECN broker, slippage is unlikely to happen due to the execution speed.
Very low Spreads - If you see an account with fixed spreads, this means you are officially looking at Market Maker broker. Spreads tend to widen substantially, following supply and demand hunger. ECN brokers are the most transparent type compared to all online Forex dealers. The profit of ECN brokers does not come from spread difference. The profit comes from commissions on each trade you make. ECN brokers need you to win, otherwise there will be no commissions for their hard work.
High Liquidity - ECN Forex brokers provide high liquidity an can guarantee orders to be filled in the market arena, without experiencing re-quotes or order cancellations. There is also no conflict of interest between the broker and the clients, because there is a direct market access and all orders go through the market at the current market rates.
No Deader Intervention - The fact that there is no dealing desk makes it possible for a trader to concentrate on the strategies without worrying that your broker is trading against you or manipulate the prices in any way. Market markets brokers can easily control the platform and alter trading conditions without you even noticing, therefore ECN is definitely the safest way to trade forex.
Risks of ECN Forex Brokers
There are some cons to consider when choosing ECN broker in 2022. There is commission on your trades and a certain percentage is always changed from you for the ECN services. Some brokers go even further and add the commissions to the spreads. What you need to remember is that ECN brokers earn their salary by charging commissions and you are the one who pays for the trades before opening and closing the positions.
Another issue to consider is the slippage. ECN brokers do experience volatility and prices can go up and down with the matter of seconds. Since there is no dealer, during volatile market conditions, you may experience slippages both positive and negative. If you are using high leverage, these changes and slippages can be rather risky business.
With ECN trading, you have to be in full control of your trading accounts, since there is no way to preset levels for take profit an stop loss.
ECN brokers charge astronomically high initial deposit. When you can usually get away with $100 minimum deposit, ECN account may require thousands of dollars of deposit before you can come any close to the ECN account conditions. Despite high requirement, traders can search for ECN brokers that doesn't ask for crazy initial deposit. You can review such brokers with ECN accounts at our recommended Forex brokers list.
Market Depth means that ECN traders have access to wide range of market depth and liquidity. With ECN account you can experience real time orders through your platform. This is simply not the case with market maker broker. You will never see the real thing trading with dealer desk broker.
ECN Forex brokers rarely offer high leverage. While market maker can go all the way to 1:1000 leverage, even major ECN brokers cannot catch up with such leverage and this is also the reason for high minimum capital requirement.
How to Choose The Best ECN Forex Brokers?
Promotions - Bonuses and competitions were always part of trading fun. Top ECN forex brokers should not limit the clients and give out bonuses and raffles for traders. On the other hand, do pay attention to suspiciously high trading bonuses, because this can indicate some sort of fraud and mischief from the broker. The bonus conditions have to make sense and have transparent terms and conditions.
Why Should You Deposit With Top Rated ECN Forex Brokers?
Clearly ECN Forex brokers bring you the best trading features and conditions available in currency exchange market and they limit the risks related to slippage and volatile spreads. ECN Forex Brokers allow you to have positive hand first on the real market conditions. They offer security, regulation, and trading conditions that can be found only in ECN networks.
You can find brokers located in your own country if that makes you feel more comfortable. There are a lot of options to choose from and once you have the country figured out, you basically narrow down your search. Do you want to trade with UK based broker? Maybe US-based broker makes you feel more secure?
Deposit small or big, you still need to make sure that your funds are safe. This is when regulation of your broker comes in handy. Imagine the situation when a broker looses all of this money. With regulation authority, you will be able to return your funds because this is your insurance. Reputable financial authorities give you peace of mind when it comes to trading online.
Choosing ECN brokers is time consuming, however it gives you advanced access to the real market rather than a made-up world of market-marking brokers. You don't have to worry about weird terms and conditions, broker trying to trade against you and changing the platform features as it pleases. Best ECN brokerages are available throughout the internet and it's just a matter of time until you find the one that suits you best.
HOW TO FILTER FAKE ECN FOREX BROKERS
The popularity of ECN brokers has led to an increasing number of brokers labeling themselves and such or claiming to offer ERCN-type of accounts. It is therefore crucial that you understand how to discern fake from real. Here are a few tips
Check the spreads
Spreads in an ideal ECN broker are dynamic. A broker that has nearly fixed spreads and slow executions is undoubtedly not an ECN broker.
The first question that bank traders asked during the launch of the pioneer ECN Forex broker was the possibility of banks accepting to process direct microlots. The truth is that this level of execution is only possible for ten or more full slots. It would take longer to attain this threshold if an ECN Forex broker accepted microlots or smaller trade sizes.
Any broker that accepts such low minimum sizes has to have a dealing desk for the bucketing of the orders. It, therefore, ceases to be a real ECN broker.
Sometimes, knowing what happens behind the scenes might not be essential. Such is the case when you have the certainty that the brokers are matching the orders directly and the execution speed is acceptable.
The liquidity provider
The liquidity provider ought to be a 1 tier investment bank. Most of the fake ECN brokers have their dealing desks acting as the liquidity provider. Most of them do not reveal their liquidity provider to traders. If you have to push to get this information, then the broker is market maker with an ECN façade.
Benefits of Using an ECN Broker
When it comes to deciding which type of broker is best suited to a particular investor, it’s important to look at what benefits are offered. In order to make this as simple as possible, we’ve outlined a few of the most prominent benefits to the best ECN broker.
One of the biggest advantages of trading with an ECN broker is transparency. As these brokers use a network, every platform has access to exactly the same information at the exact same time. This means that any ECN broker should offer precisely the same prices for an asset at a given time (although spread and commission can still vary).
As everyone has access to the same information and price history, it’s easier to analyze market trends. In theory, this helps to reduce market manipulation and puts traders on even ground.
Perhaps the most important benefit to trading with an ECN broker is getting the best possible price. When using an ECN-based platform, a trade should always execute at the best price on the market. Considering forex trading often involves taking advantage of small price movements using high leverage, this can end up making a big difference.