List of ECN Forex Brokers

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.

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?

 Looking for top ECN Forex Brokers? You are in the right place, because we offer comprehensive reviews and list of trading conditions you can go over to find the broker which suits your trading style, financial situation and expectations. When you review the features of ECN forex brokers, you need to go over the factors that make ECN forex broker reliable, reputable and most wanted:

Regulation – ECN broker might offer amazing trading conditions with lowest zero spreads and amazing innovative trading platform, however it is still your responsibility to check whether your broker is safe and takes care of your funds well enough. The only way to make sure that your broker is reliable is to check whether the broker of your choice is regulated. Major regulatory authority will protect you from any types of forex scam and broker fraud. Regulation, of course, doesn’t 100% secure your trades, but it gives you strong hand in case your security is under attack.

Innovative Features – The time is ticking and you can see more and more unique features added in forex industry. Why should you aim for anything less than perfect? ECN forex broker should offer great trading conditions and innovative features compared to its competitors. You must have access to tutorials, live news feed, analysis of the market, signals and the best trading platform. Some ECN forex broker offer VPS hosting for free in order to make your trading experience even better.

Trading platform – This is your gateway to the market, the wizard of trading conditions and the keeper of your funds. The reliability and user-friendliness is a must when it comes to ECN forex trading platforms. One of the most reputable platforms today is Metatrader 4, along side comes cTrader. Both platforms provide outstanding performance, reliable features and security for your funds.

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.

Trading sizes

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.

Transparency

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).

Fairness

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.

Price

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.