It works in a clean ECN model, which won the sympathy AETOS is a well-known brand all over the InstaForex is one of the leading brokers on the Asian market. It has received awards in , and It is regulated by the Russian Federal Pepperstone was founded in by a team with years of experience in trading on the Forex market and in technology industries.
The company is based Hantec Markets is a broker that has been operating on the market for 25 years, primarily in Asia. At present, it also offers its services to European Dukascopy is one of the largest retail brokers in the world and one of the oldest ECNs available to retail clients. However, it is good to know that Founded in , FxPro is a leading online Forex broker. Admiral Markets, founded in , is a global Forex broker focused on online trading not only in currencies, but also in CFDs, precious metals and You can start trading with a deposit of USD 10, using a maximum leverage of as Nevertheless, within a span of three Your choice of bid-ask options will be huge, and of course, there will be some liquidity providers who offer higher bidding and lower asking prices.
But, there will also be providers offering lower bid prices and higher ask prices. Either way, you at least have a better diversity of options to choose from, not least because the quotes are always collected by one ECN forex broker. There are many ways in which you can fund your ECN trading account, however, each broker platform will differ slightly. The very best ECN brokers offer a variety of different payment options to choose. The most common payment options are:. This should include the likes of:.
Much like with any organisation or company you deal with, you need to know that you can expect a good level of customer service. Whilst most reputable ECN brokers do have a great customer support team for its clients, one of the ways you can gain some insight is to check out the reviews left by other customers.
Word of mouth is what usually keeps customers coming back. Realistically, like light and dark most good things come with negatives as well. With this in mind, we have to inform you of some of the disadvantages that can go hand in hand with opening an account with an ECN broker. It really depends on how big those commissions are and what your trading budget is. In other words, ECN brokers are likely not suitable for small trading stakes, as your potential profits will get eaten away by a flat commission fees.
In order to open an account with an ECN broker, you will often find that platforms expect a higher deposit fee. This is down to the high service costs, and the fact that they allow you to communicate directly with liquidity providers. As liquidity providers can also have such high requirements and service costs, market participants can sometimes hold a position size of 10, currency units or a 0.
As such, if you really want to trade with an ECN broker, it will be worth doing your own research and learning how it works for yourself. We do think that the good outweighs the bad, and especially if you are wanting to benefit from tighter spreads and open large positions. All in all, if you have a smaller budget, we at Learn 2 Trade would recommend sticking with STP brokers for now. Now you are armed with all of the information you need on ECN brokers, you probably want to get started.
First, of course, you need to decide on which ECN broker best suits your needs. Still not sure which ECN broker suits your needs? Not to worry, our expert team at Learn 2 Trade has put together a list of the best ECN brokers to help you to separate the wheat from the chaff. This can be found at the end of this guide! Open a trading account by filling in the registration form with your basic information.
This is standard practice with any broker. Now you will need to submit your proof of identity. Again, this will vary, but generally speaking, you just need to send a copy of your passport or national identity card. Some ECN brokers may require additional proof of who you are; such as a utility bill, phone bill or any other official letter with your name and residential address on it. Your identity and personal details will be checked in accordance with regulations. Usually, you will receive confirmation of this almost immediately.
Now you should be able to log in to your account, set up your preferred payment option, and deposit some funds. As soon as your account has been funded, you can begin trading straight away. This includes CFDs in the form of stocks, commodities, and indices. This means that you will be accustomed to reasonably competitive fees, spreads, and commissions.
With more than 90 forex pairs on offer, you will have access to a full selection of majors, minors, and exotics. You will be able to trade everything from forex, commodities, spot metals, and stocks - all in the form of CFDs. You will also have the optoin of using popular third-party platforms MT4 and MT5. This is ideal for those of you that require advanced chart reading and drawing tools, as well as the ability to deploy automated robots.
Negative balance protection if offered, and you can engage in both scalping and hedging without concern. Think Markets is an online broker that holds several regulatory licenses. This includes - including the FCA. This particular broker is popular with traders that want access to high leverage limits.
This stands at a whopping if you are a professional client. Robo Forex is an online trading platform that offers ECN accounts. Best of all, you will not be accustomed to any spreads when trading via your ECN account. The platform is home to high levels of liquidity and fast execution speeds. Thanks to superior trading execution and trading conditions, we think that an ECN broker enables seasoned traders to enter positions more fluently, but more importantly — more profitably.
By cutting out the middleman there is a lot more clarity. And with the removal of conflict of interests, the best ECN brokers are widely considered to be a dependable and safe way of trading. This is because your ECN broker is going to make a commission regardless of whether you lose money or make a profit. Always remember, regulated brokers must adhere to strict obligations and rules when it comes to the security of your trading funds. As such, we at Learn 2 Trade will never recommend an unregulated broker on our website.
Before you make a final decision on what type of broker you would like to use, it is important to do some research. No two brokers are the same, and their products and services on offer will tend to be slightly different. Author: Samantha Forlow. Samantha is a UK-based researcher and writer that specializes in all-things finance. This covers everything from traditional equity and fund investments, to forex and CFD trading.
Samantha has been writing financial-based content for several years and has a variety of publications in the online domain. Crucially, she is able to explain complex financial subjects in a newbie-friendly manner. Table of Content. Our Rating. UK traders our chosen broker is Alvexo Super-low commissions and tight spreads Trade forex, crypto, commodities, and indices Fully supported by MetaTrader 4.
Visit Chosen Broker. High-grade ECN trading platform. Other ECN platforms in market are more competitive with fees. Visit Forex. Zero commissions. Tight spreads Heaps of financial instruments supported. Visit FXTM. Low fees and spreads. Multiple payment methods supported Choose from four different trading platforms. Real-time news is a bit basic.
Visit Pepperstone. Visit Think Markets. Relatively unknown in the brokerage scene.
ECN brokers guarantee direct access to the interbank market , without filters. In order to understand the difference between an ECN broker and the most common OTC brokers, we will also have to understand how the latter work. The OTC broker is in fact a broker that does not guarantee access to the interbank market, but that creates its own internal market , offering exchanges at set prices that can be even slightly different from the official ones on the markets.
The OTC broker is a sort of bank, against which you can go and invest : when you open a position, you are buying contracts that represent the pair you have chosen. This category of broker is therefore a regulator of last resort , a bank against which to bet and which is always willing to exchange at prices set by him. Generally the prices set by OTC brokers are slightly higher for buying and selling than the official ones, i. The ECN broker, on the other hand, is not an over-the-counter broker.
It merely transfers your orders to the market, acting in all respects as a mere vehicle for your intentions. Do you want to test the advantages such as transparency ,effective access to markets , the absence of desks and intermediaries that make the market? Later in our guide today we will continue to explore the advantages and disadvantages of opening an account with an ECN broker. Perhaps the most important advantage for those who want to invest through a good ECN broker is transparency.
When we choose a classic broker, we are in fact betting and investing against it. We are in the same situation, to understand us, as those who play against the bank. In the long run, the banker always wins, even if they do not necessarily win against us. However, some problems could arise in terms of transparency, since precisely who manages the sub-market, prices and spreads is the same that should then offer us neutral conditions to invest.
With ECN brokers there is no danger in this respect. The broker of this type in fact limits himself to pass the order to the market, without intervening, without fixing the prices nor without opening his own positions contrary to those of the client.
If the first is a bank, the second, the ECN, is to all intents and purposes only an intermediary. There is no doubt that, on paper, one can sleep much more peacefully with a broker offering this type of service. The second of the advantages offered by ECN brokers is also and above all the spreads.
We are talking about the distance between the purchase price and the sale price of a given Forex pair. In the case of Market Maker brokers , they do not charge direct commissions to ensure a return, but simply offer higher spreads, pocketing the difference. Looking at it from this side, it may seem that ECN brokers are always cheaper.
In reality this is not the case, because ECN brokers, in order to support themselves and to get their profit, add fixed commissions to each type of order. These are two methods to apply very different commissions and the second, perhaps, immediately clearer and have, as we will see later in our guide, important repercussions on those who use particular trading strategies like scalping.
We have chosen for you only those brokers who can actually offer you a safe , reliable and problem-free investment environment with no scams. As you know, if you read Mundo-Forex. Absolutely not. ECN brokers only offer a different type of market access, which among other things also provides greater transparency than the broker market makers that exist in Europe.
What is certain is that we will still have to pay the utmost attention when looking for a broker who can actually support us during this type of action. There is no need to take unnecessary risks. Choose ECN brokers that are really solid and safe. In fact, we are still in a sector where there is a lot of money circulating and where a lot of malicious people could take advantage of the popularity of the networks to try to get money out of you.
What to do then? Simple: follow newspapers and sites that you can consider as reliable as the one you are reading. Never trust brokers who contact you directly or who promise you automatic earnings through their networks. Do not fall prey to their sales gimmicks. Best forex brokers would never make unbelievable and unachievable promotional offers.
It is true that cash and prizes form part of the game, but they should be reasonable. Another aspect to look for when evaluating online forex brokers is the educational services offered by them. This helps you to master the art of forex trading. Brokers that provide you with a variety of educational tools for assisting you in assessing the Forex market are the best forex brokers to work with.
Obviously, the former typically operates under regulations stipulated by a forex regulator. Regulated Forex brokers must also be fully licensed and registered in their country of operation, unlike their non-regulated counterparts. Of course, the role of regulation in Forex market cannot be underestimated. Regulation ensures that all players in this booming industry are strictly supervised. This way, merchants are protected from the many unscrupulous traders out there looking to swindle them off their hard earned money.
To expound more, here are the main reasons why expert traders prefer regulated brokers:. That being said, the credibility of any Forex broker is greatly enhanced if the company is regulated by the relevant agencies. Remember that all regulated forex brokers are mandated to follow some strict rules put in place by their respective regulatory bodies. Furthermore, their regulatory bodies expect them to regularly present a copy of their audit report.
Getting compensated in case of any unfortunate scenario is arguably the best reason why most expert traders opt for regulated brokers. With most regulated brokers, you can rest assured that all your hard earned money will be refunded in case your brokerage firm goes down. This pool of funds is to help settle any form of customer claims in case of any eventuality. In this case, most regulated brokers are always competent enough when dealing with technical support or account issues.
In addition, they are very helpful and kind during the whole account opening process. Any reputable Forex broker will allow their merchants to make deposits and withdrawals without any hassle. All they have to do is to facilitate the platform to make it convenient enough for you to trade.
Most regulated brokers are mandated by their respective regulatory authorities to provide their clients with the latest, powerful, and easy-to-use trading platforms. In fact, most of their platforms will readily provide you with all that you need to begin trading immediately.
It goes without saying that regulated brokers also offer their clients free demo accounts to help them sharpen their skills before going live. All over the world, governments are struggling to deal with issues concerning money laundering.
Some of them have even gone ahead to pass very strict anti-money laundering laws. So to be on the safe side, you should always trade with a regulated broker. Most regulated Forex brokers will ask you to provide some of your personal identification documents such as proof of address and photo ID. To sum it up, regulated Forex brokers are always the best as well as the safest option to trade with. This is because they are always ahead in terms of legality, security, and safety of your funds.
All in all, you can manage your risks better if you opt for a regulated Forex broker. The foreign exchange market, also known as currency market, is a universal decentralized market that provides traders an opportunity to trade currencies. It is a market which incorporates all aspects of buying, selling, and exchanging currencies at the present-day or determined rates. There are different kinds of forex brokers that you can choose to trade forex with.
However, though all the brokers in forex are intended to provide a similar basic solution, the way they operate behind the scenes is different. Different types of brokers have varying techniques of operation, and the specific broker you cooperate with can significantly determine your success rate as a forex trader.
Here are some crucial factors that will enable you determine which broker between a true ECN and STP broker is the best one to trade forex with:. True ECN i. Electronic Communications Network brokers operate without their individual dealing desk. These brokers provide an electronic trading platform where professional market makers at monetary organizations such as banks, and other online trading participants including traders can enter bids and offers through their particular systems.
STP i. Straight Through Processing brokers are brokers without a dealing desk also. These brokers apply some of the techniques utilized by market makers to provide their particular clients with trading conditions which are more flexible.
By STP brokers hiring some of the tactics of market makers, they are able to bypass the limitations connected to trading exclusively within the interbank market. Therefore, these types of brokers allow traders to utilize scalping techniques to close their respective positions. Note that false ECN and STP brokers cannot allow you to use scalping techniques as a trader since they will be disadvantaged anytime you make small profits.
Though true ECN and STP brokers can add markups when necessary, they cannot in any way take it further down than the amount provided. On true ECN accounts, as a trader you will be required to pay a fixed commission to open and close trades. The Spreads offered on true ECN accounts are determined by the rates of liquidity providers. When using STP accounts as a trader, you will not be required to pay any commissions. True ECN brokers cannot trade against their specific clients to bankrupts themselves.
If you are a forex trader, trading with a true ECN broker means you are guaranteed of price rates that are similar to those of the interbank market. As a trader utilizing the trading account of a true ECN broker, the broker will be accountable for any dues with liquidity providers should your account read negative as a result of any reason beyond their control.
Dealing with a true ECN broker will require you to pay rollover fees and commission at times. Despite both true ECN and STP brokers having incredible trading solutions which can meet your needs as a trader, their terms of operation vary. Whether you will choose a true ECN or STP broker, the rule of thumb is always ensuring you minimize losses and maximize profits as much as you can when trading forex.
Ensure you compare carefully the terms of service of both a true ECN and STP broker before you choose one to handle your trading needs.