For most traders, the standout unique selling point of this broker lies in the incredibly wide range of tradable assets offered, providing an opportunity to trade over ten thousand individual stocks and shares. These go beyond the typical U. Also, over 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin are also on the menu here. Unique Features Headquarter. Traders can scalp and hedge at this broker, whose fast ECN execution speed makes it a natural home for scalpers. Clients may choose between the MetaTrader 4 and MetaTrader 5 platforms, and shares can be traded through the IRESS trading platform which includes access to level 2 exchange data.
Pepperstone, founded in and headquartered and regulated in Australia, the U. As an ECN broker, Pepperstone offer raw spreads and low commissions. Pepperstone is renowned for its advanced technology tools such as Smart Trader Tools and cTrader Automate. We have made FXTM our top-rated broker because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.
Recent years have seen them continue to steadily expand their business, and they are well- regulated by the U. The brand is owned by private companies incorporated in the U. Customers of FXTM have access to more than 57 Forex currency pairs and crosses, precious metals, the major energies, equity indices, big cryptocurrencies, and a few individual American stocks.
Talking of stocks, FXTM are quite unique in the area of trading stocks, as they enable direct trading through real legal ownership, not just wrapped as CFDs like almost every other similar brokerage offers. Clients have a straight choice between two trading platforms, with both MetaTrader 4 and MetaTrader 5 on offer. In the U. Excellent client deposit protection.
No cryptocurrencies or exotic currencies. Low minimum deposit. Low leverage for retail traders. Internal withdrawal fees and an inactivity fee. Good educational tools. BlackBull Markets is a relative newcomer as a Forex broker, being founded in in New Zealand, which along with Australia, has become something of a haven for exciting Forex brokerages.
Like many antipodean brokerage houses, BlackBull Markets is an ECN broker, offering raw spreads and competitive commissions.
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New Zealand. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should not worry the average trader who is more concerned to have a normal range of markets to trade without being overly worried about diversification. BlackBull Markets impresses through a kind of quiet confidence — they do not make extravagant claims, they simply focus on providing the basics required for ECN trading well and at a reasonable cost. A true ECN broker is simply defined as a broker that plugs your orders into a network where it is automatically matched to a matching order from another client or liquidity provider.
This is the textbook definition to work from. Most brokers claiming to be ECN brokers are probably telling the truth about this at least, although if you see large spreads, spreads that never seem to really vary, or continuously slow execution, they are almost certainly not. The network is only as good as its source.
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To be regarded as a real ECN broker, the liquidity provider should really be a tier 1 bank. We must wonder how often this is really the case, and why many brokers that advertise themselves as ECN brokers are so tight-lipped about which liquidity providers they use!
When the first ECN brokers started appearing, bank traders started to ask how orders for mini-lots 0. Bank traders will tell you that at this level, trade sizes are usually in minimums of ten or so full lots. The final question is, does it really matter? If a broker is at least trying to match orders directly, there is not much of a conflict of interest, potential or otherwise. If you benefit from a low cost of trading and relatively fast execution, then why not be happy with what you have got.
Just do not be under any illusions as to what is probably going on behind the scenes. An ECN broker will have a system that can match these two orders, where the broker does not take the other side of the trades. The ECN broker makes most of its profit from charging commission on each trade order which is matched. You will know you are looking at an ECN broker when you see tight spreads and fixed commissions. ECN brokers will observe different price offerings, known as quotes, from the different liquidity providers they use and offer their customer access to the one with the best spread.
Best Forex Brokers
The spread will depend on the difference between the buying and selling price and it is measured in pips. ECN brokers match corresponding orders between their clients and pass the net orders to liquidity providers.
This means that there are fewer potential conflicts of interest between an ECN broker and their clients. Traders using an ECN broker should get honest, automated, anonymous, and fast trade execution. As ECN fee models usually offer lower spreads in practice although commissions are also charged, ECNs often offer an overall lower cost of trading to clients trading in relatively large quantities.
Where a true, pure ECN execution model exists, customers can even occasionally benefit from inverted spreads , which occurs when for at least a few moments, the bid price is lower than the ask price. In theory, these moments offer an opportunity for risk-free profit if execution is fast enough, but once the commission charged is factored in any net profit would vanish. Inverted spreads do at least offer a relative bargain to the trader.
The MT4 ECN Forex Brokers
While the spreads available from an ECN broker are generally low, when commissions are factored in, the smaller trader might find they are paying the same overall cost of trading as they would at a market-maker broker. When natural liquidity is thin, spreads may be very wide, particularly at the time of major market releases. Some ECN brokers do not offer trading in micro-lots but impose a minimum trade size of 1 mini-lot. Therefore, again, this might force traders with relatively low trading capital to trade higher position sizes than they would ideally want to, forcing them into an over- leveraged position.
Once you place a trade, it will be matched with a buy or sell order from someone else in the world. It will be executed immediately and anonymously, and you will be charged a fixed commission price and probably a relatively low spread. ECN trading can be less liquid when major events are moving the market.
Market-makers tend to widen spreads at these moments, but ECN brokers will often present very large and sudden price jumps in their price feed, even if spreads will tend to remain somewhat lower than those offered by market-maker brokers. As a general rule, trading liquid markets during periods of peak liquidity is where the practical benefits and economies of ECN trading become most obvious. Possibly one of the greatest benefits of using an ECN broker is largely intangible: knowing that you have no potential conflict of interest with your broker, because they do not make any additional profit when you make a losing trading.
The best ECN trading account forex broker for you will depend upon where you are resident, how large or small you trade, what you trade, and how frequently you trade, as these will all affect the cost of your trading.
Best ECN Brokers – Our Expert Choices
Different fee models will be more economical for one type of trader than another. Keep your trading style in mind when you are comparing broker offerings. One common issue with ECN brokers is slippage and requotes. This can be a problem at times of high volatility — usually after a large event or data release — or at times of low liquidity — such as when most of the markets are closed. This also means that the market can move past your stop-loss orders, and your losses may exceed your expectations.
ECN Brokers have a higher risk of slippage and requotes. The last thing to be aware of with ECN brokers is that they generally require a larger minimum deposit — setting up and maintaining an ECN brokerage is an expensive business and traders will be charged more as a result. ECN Brokers require higher minimum deposits. Axi is the best ECN broker.
Best MT4 ECN Forex Brokers 2021
Other highlights include a detailed and well-structured course for beginners and leading market analysis for all clients. Axi combines exceptional ECN trading conditions with world-class regulatory oversight. Read our full Axi review here. When you place a trade with a market maker broker, the broker themselves will be the counterparty to your trade.
Market Makers create an artificial market for their clients — hence the name. Market Makers always act as counterparty to your trade. Currently, most well-regulated market makers are well regarded in the industry, despite the conflict of interest, and they go to great lengths to ensure their clients are not being unfairly treated. But, Market Maker brokers are not a common choice for experienced Forex traders. Traders are limited to trading with one counterparty who is always trading against you and never on the open market with dynamic spreads. There are a few ways to check: ECN brokers will describe their execution model in their legal documents, ECN brokers will always have variable spreads, ECN brokers will not have any trading restrictions trade size, stop-loss limits, scalping or hedging bans , and traders with an ECN broker will experience both negative and positive slippage.
All regulated brokers are required by law to publish a Client Agreement and Order Execution Policy stipulating their execution methods. Some ECN brokers will also act as Market Maker in certain circumstances, so this is not an always foolproof method of determining a broker type. Fixed spreads are only offered by Market Makers, as they are not taken from a live and dynamic market.