Jan 26 2021 21
BRKV – When I say the best forex ECN brokers, I actually mean the ECN accounts of those brokers. People are so used to the term 'ECN brokers' that I will use it from now on. The best forex brokers have different types of accounts that suit different levels of forex traders. The regular accounts are for beginners and experienced traders while ECN accounts are for experienced traders or experts only. So you should only trade ECN account when you think you’re experienced enough in the forex market.
Why is ECN account is for experienced ones only? Because ECN account is highly fluctuated, has high slippages and unstable quotes. Only traders with experience can deal with these trading conditions. The only advantage of ECN account is that it has very low trading cost and you get to trade in the real market. Sometimes the spread can be as low as zero, so experts want to take advantage of this to make more money. Here are the best ECN brokers in my opinion:
What is ECN broker?
ECN stands for Electronic Communication Network. The mission of this network is to help the orders of all customers interact with each other. It is like a common platform including banks, bookmakers and traders sending orders in. The best bid/ask price in the ECN system will be offered to traders who want to trade the market at that price. The price is offered by a certain provider (bank, banker) in the system.
So what makes a good ECN broker? Let’s walk through the features of an ECN account again. ECN account has high slippage and unstable quote. Also, it has commission because brokers have to charge commission for it since they don’t make anything from spreads. Therefore, to be among the best, ECN brokers must meet these standards:
|Trustworthy||Trading costs||Trading conditions||Local services|
|Regulations||Low commission||Good quotes||Payment system|
|Past activities||Low slippages||Trading platforms||Local offices|
Let me explain why these standards are important for ECN brokers.
The best ECN brokers 2022 must be reliable brokers
Because ECN traders often deal with large amount of money, a broker’s trustworthy is without a doubt the most important criteria since you can only deposit thousands of dollars to someone you can trust.
How to know which broker is reliable?
The answer is actually very simple. It’s the regulation and that broker’s historical activities. A broker’s validity is based on whether they have a regulation or not, and the regulation itself must be confirmed its validity as well as coming from one of the more trusted agencies such as FCA, CySEC, NFA… Regulations are provided by the financial organizations whose purpose is to safeguard the general public, which consequently makes obtaining a regulation become a challenging and difficult mission for forex brokers. A regulation would limit a broker in a lot of aspects in exchange for the security as well as their services. To name a few limitations that a broker would have to deal with, there are:
- Limits of maximum Leverage.
- Limits of quotes quality.
- Minimum operation fund limit.
- Limited Bonus.
- Segregated accounts to protect clients.
- Limit advertising messages to avoid misleading for traders.
As for us traders, doing business with a broker that has one or two trusted regulations always feel more comfortable and safer than doing business with brokers that have none. Although for trusted brokers, their trading fees might cost a little bit more in exchange for the better service and security.
This is due to the fact that the aforementioned organizations charge their brokers a large amount of fee in exchange for their service as well as reputation, so in order for brokers that have regulations to make a profit, they’d have to charge their customers more by making their margin requirements higher or charging higher spread and commission and so on. Moreover, the most reliable forex brokers are also the largest forex brokers.
My professional opinion about licenses
I think we can all agree that a regulation should always be healthy for any broker. It shows that the broker cares enough to put up with the downside of a regulation to provide their customers overall better service and safety. However, one regulation in my opinion should be more than enough most of the times. Owning two or more regulations would indirectly put a lot more costs on their customers by making them pay more to cover for the regulation fees.
What regulations do these brokers have?
|Exness.com||CySEC, FCA||Learn more|
|HotForex.com||CySEC, FSCA, FSC||Learn more|
The best ECN brokers 2022 charge lowest trading cost
What is the trading cost of the best ECN brokers?
When you trade with the best ECN brokers, you don’t have to worry about their spread. ECN brokers have very tight spread since they work with many liquidity providers, and sometimes, their spreads can be zero. Well, then you only have to pay attention to the commission. Due to the low spread rate, brokers have to charge commission for ECN accounts as their main income. And I know the brokers from my list charge the least. Here are the commission rate of my best ECN brokers:
|Brokers||Commission per lot|
You can see that HotForex's commission rate is lower than that of Exness, but I still rank it last because Exness’ spread is way lower than HotForex’s rate for ECN accounts.
Check Exness spread here.
Check FXTM spread here.
Check HotForex spread here.
The best ECN brokers must have good trading platforms
A good ECN broker must have a good trading platform. The best trading platforms are the ones that have fast servers, can close and open orders instantly. Since ECN is not very stable, the spreads, and quotes will change in seconds. That’s why you need a good trading platform. All three brokers I mentioned have great trading platforms. I hardly encounter any errors when trading with them.
Check Exness trading platform here.
Check FXTM trading platform here.
Check HotForex trading platform here.
The best ECN brokers support better
Needless to say, customer service is one of the most important when doing business since business is all about people, trust and profit. Not to mention that the whole forex trading market is a rather vast and complicated place that the beginners/new traders sometimes find themselves lost. They are almost always in need of professional help as well as advices on how to make money safely. The aforementioned brokers all have excellent customer service including 24/7 and multiple language support. Most of them have their own branches in China, Thailand, Indonesia, Malaysia, and Dubai… For countries that don't have regional offices, they offer support online as well as via phone in English or your native language. The language support is very crucial to traders who want to work with ECN brokers in South Africa or Asia because those traders may not be very good at English. Here is the ECN brokers list of those who can help you in different languages.
|Languages||Work hour||Live chat||Phone|
Moreover, you can check out here (they're completely different)
Efficient payment system
BRKV - While this might not be that big of a deal for US and UK traders since most of the brokers there have relatively good payment system. As for Asia and Africa, however, most of the brokers’ payment system are quite bad and in need of a lot of work. I myself am from an Asian country and the banks here would charge 1.7 to 4% alone just for depositing in my Credit Card, which just makes no sense since it’s already hard for us traders to earn even 5% monthly. Therefore, I think that it’s very important for you to choose an ECN broker that offer local payment system or just overall excellent payment system.
As for my professional opinion on which broker should you choose based on their payment system, I personally find Exness to be the best in this area. Exness offers over 30 different payment methods as well as free of charge local payment support. Furthermore, Exness offers their own fully automatic transfer/withdrawal system which I find a lot more efficient as well as advanced compared to the other brokers. While it might take you hours or even days to transfer/withdraw money in other brokers, the transfer/withdraw time in Exness is instant. With Exness instant transfer/withdrawal time, I can do my own ECN trading more efficiently and make more money this way. Lastly, Exness is the only forex broker up-to-date allowing deposit and withdrawal on weekends.
Why is Exness Payment system so fast?
Exness payment system is truly a step ahead of every other brokers. It’s fully automatic, all the works are done by the machine. Exness payment system is programmed to compare your transfer/withdrawal information with your personal ID to ensure that each transaction is always secured. Check Exness Payment system here.
Who are the best ECN brokers?
The advantages of the best ECN brokers
Very low spreads
The spread is zero or very low, which makes ECN the perfect place for you to play Scalping (surfing). Will help players enter and close orders quickly without slipping too much, especially when the market fluctuates, the price fluctuates continuously.
Rates listed by the market
This is somewhat different from the market maker (house), which helps the brokers not to conflict with customers' interests, so it is not possible to trade in reverse with customers nor to spread the spread for traders.
Quick order execution, no requote
Orders are pushed directly into the market where there is the participation of banks, large and small funds so orders often match very quickly, with low latency. Typically, at ICMarkets, the average execution time is less than 40 ms for Forex and Metals (ECN products). Especially, because ECN is not a form of order-holding brokers, even when the market fluctuates sharply, traders will not be required.
No slippages with ECN accounts
Do you know what slippage is in forex trading? Slippage happens when you enter the price for a trade but while waiting for the platform to execute your order, the price has changed because of the market. The gap between the new price and your initial price is called slippage. Traders hate slippage, even though it is a totally normal thing in forex trading. The only way to avoid slippage is choosing a broker that has excellent execution speed. If it can processes your orders quickly, slippage cannot happen. ECN accounts often has the best execution speed and Exness has the best ECN account.
Check out Exness ECN account here.
Differences between ECN brokers and regular brokers?
As mentioned before, ECN was originally a market that pushed orders to the market, so it was impossible to interfere with these orders, or to spread spreads to profit from traders, mainly from commission fees. So, many current brokers often advertise they have ECN-type accounts, but actually not. Therefore, to identify a real ECN broker you can base on the following conditions:
- Fast execution of orders.
- The price is closest to the market.
- The spread fee is zero, and the commission is low.
Display Depth of Market (DOM) is a table showing buy and sell orders from participants at different prices and market volumes. This is one of the important points to evaluate the ECN brokers. In fact, only ECN brokers have DOM. Market Makers do not.
What level of experience is suitable for ECN account?
For traders who follow the style of a Scalping Trader, perhaps creating an ECM account to trade is perfectly correct, because the Spread of ECN accounts is very small, even close to 0 pips on some forex pairs, which Scalping Traders usually place and exit orders very frequently and continuously, so they will save a decent amount from Spread fees.
Actually, the fee from Spread (Bid / Ask difference) may not be much, but in the long run it will also be a significant number. Moreover, with fast order execution, leading to high liquidity, and most importantly, No Dealing Desk, it is understandable that more and more traders are dealing with ECN system.
What you should know when trading ECN
The biggest disadvantage of ECN is the minimum deposit to deposit, and the leverage is quite modest. The minimum deposit is normally from $300 and up and the leverage is usually only 1:200 or the highest is 1:500. In fact, this is easy to understand, because ECN brokers push orders directly to the market and only "live" because of commission fees, so the minimum capital is too little will not be enough to trade in a standard lot, the broker will be difficult to survive.
In addition, your order is decided from the market, the broker cannot directly intervene, and must comply with strict regulations from financially rigid institutions such as FCA. As a result, the rights of traders are guaranteed not to be priced or deliberately spread spreads to cut losses or account. If you are an experienced investor, especially, if you want to trade straight into the interbank market where there is high liquidity, consider trading at ECNs instead of choosing other types of broker.
Which one should we choose, dealing desk or non-dealing desk?
It’s hard to judge which one is better. It’s up to your trading strategies. People tend to think that Dealing desk will trade against traders while Non-dealing desk brokers are the opposite. That’s not true at all. When it comes to big Dealing desk brokers, they let the system operate automatically. So, in terms of large scale, Dealing desk and Non-dealing desk brokers are not much of a difference. Choosing the best ECN brokers is like choosing the best brokers after all.
The best ECN brokers can actually do some good for you. They have lower cost, better execution speed and less slippages. However, it is more volatile when trading with ECN accounts, so it is recommended to trade ECN accounts only when you are an experienced trader. Besides that, ECN brokers are not much different from normal forex brokers at all.