ECN Forex Brokers have the best trading conditions that clearly provide an edge to the traders without any risk of broker or dealer intervention. ECN Accounts have various advantages that are considered beneficial for traders. They do not pose any conflict of interest, they are cheaper due to the spreads, and they have high liquidity in all categories of traders. If you are looking for brokers with a different working model, you should consider visiting our STP and NDD broker pages. However, if as a trader, you are interested in an ECN Forex Broker, we have provided a list below for you to take your pick.

Some of the most well-known brokers that offer ECN FX trading are: IC Markets and XM Group.

ECN Forex Brokers List

Broker
Description
Trade Now
Octafx
OctaFX
Regulation: CySec
Min. Deposit: $/€/£ 5
Leverage: 1:500
Spreads: Low as 0.4 pips

Review


FP Markets
FP Markets

Regulation: ASIC, CySEC
Min. Deposit: $/€/£ 100
Leverage: 1:500
Spreads: Ultra Tight from 0.0 pips

Review


NSBroker
NSBroker
Regulation: MSFA, BaFin, FCA,
Min. Deposit: $250
Leverage: 1:100
Spreads: Low as 1.2 pips

Review
XM
XM
Regulation: CySEC,FCA,ASIC
Min. Deposit: $/€/£ 5
Leverage: 1:500
Spreads: Low as 0.1 pips

Review
Avatrade
Avatrade
Regulation: ASIC,JFSA,FSCA
Min. Deposit: $/€/£ 250
Leverage: 1:400
Spreads: Floating from 1 pip

Review


IC Markets
IC Markets
Regulation: ASIC
Min. Deposit: $/€/£ 200
Leverage: 1:500
Spreads: Low as 0.0 pips

Review


Etoro
Etoro
Regulation: CySEC,FCA,ASIC
Min. Deposit: $/€/£ 200
Leverage: 1:30
Spreads: Variable

Review

XTB
XTB
Regulation: FCA
Min. Deposit: $/€/£ 250
Leverage: 1:30
Spreads: Low as 0.1 pips

Review


IQOption
IQOption


Regulation: CySec
Min. Deposit: $/€/£ 10
Leverage: 1:1000
Spreads: Floating from 1 pip

Review


OlympTrade
OlympTrade
Regulation: IFC
Min. Deposit: $/€/£ 10
Leverage: 1:500
Spreads: Low as 0.0 pips

Review
Globex360
GlobeX360
Regulation: FSCA
Min. Deposit: No min Deposit
Leverage: 1:500
Spreads: Low as 1.6 pips

Review

 

What Are ECN Forex Brokers?

The term ECN Forex Brokers stands for “Electronic Communications Network” Forex Brokers, and they are considered to be the only “true brokers”. By definition, a broker is supposed to connect buyers and sellers, without participating in the transaction itself. Brokers are supposed to be only pocketing a commission. A good example to emphasize the relationship between brokers and traders would be a real estate broker, where the real estate broker has no interest in the property that is purchased or sold, however they play an active role in connecting a willing buyer and seller. This also applies in the Forex market among true ECN Forex Brokers. Their only job is to join buyers and sellers of currency, without actively managing any of the funds themselves.

ECN or Electronic Communications Network Forex Brokers is financial software that establishes a link between traders and financial institutions that provide liquidity. They allow both parties to have a direct connection, by automatically matching requests for purchasing and selling at the most suitable available price from various participants. Simply put, ECN Forex Brokers offers instant results with optimal performance and high internal liquidity, as they bridge willing buyers and sellers with the most affordable prices in the market.

Electronic Communication Network or ECN Forex Broker is a financial institution that provides streams of market depth with the best available bid and asks prices. ECN Forex Brokers usually earn its revenue from charging a commission, per trade volume. They do not make any revenue through the ask spread and they do not profit from any of its clients’ losses. True ECN Forex Brokers supply a professional trading platform where the best bid price is retrieved from its tier-1 liquidity providers.

ECN Forex Brokers provide an interbank spread from 0.0 pips and charge for a fixed commission per lot. Furthermore, this particular implementation of interactions does not cause any misunderstanding between the broker and the trader, which emphasizes the transparent relationship and the trading conditions. Aside from the competitive trading costs, ECN Forex Brokers allows extended trading time, along with high efficiency for automated trading and various trading strategies.

ECN Forex Brokers are among the fastest emerging brokerage firms in the Forex market, and there is no question that new ones are constantly opening their doors. Simply put, ECN Forex Brokers provide a marketplace where traders and market participants can place competing bids against one another.

Reasons To Trade

The most preferred ECN Forex Broker is an essential choice for any trader, since the only way the broker does not fabricate its trading conditions is due to the brokerage firm’s regulatory status and licenses. Only regulated brokers are thoroughly verified for adequacy before being launched, where they are obligated to report on a daily basis for its trading practices and keeping trader’s funds under secure procedures. However, unregulated brokers are not supervised and they can easily fabricate any information, including trading execution.

Many traders choose to trade with this particular broker for a number of reasons. These reasons are: the deep liquidity access, the lack of re-quotes, the improved and faster execution, and most of all the spreads that are significantly lower than those of a market participant, for example.

In order to understand the process of the ECN Forex Brokers, the best course of action is to use a hypothetical example. Imagine if you are a Forex trader and believe the Euro will rise in value against the dollar. In order to make a profit on your expected price change, you would be able to buy the EUR/USD pair, meaning that you are simultaneously buying the Euro and selling the US dollar. Once you send this request to your ECN Forex Broker, they will then match your order to another participant on the Forex market who wants to sell the Euro and buy the US dollar. This means that they will be shorting the EUR/USD while you’re going long. This is the essential nature of the Forex market, and there are always willing buyers and sellers.

This linkage is operated by using sophisticated technological software that is known as FIX Protocol (Financial Information Exchange Protocol). On the one hand, the broker obtains liquidity from its providers and makes it available for trading to its clients. On the other hand, the broker delivers clients’ requests to liquidity providers for implementation.

The ECN automatically matches and executes the orders requested, which are filled at the best available prices. One of the extra benefits of these brokers is the existing legacy in online trading venues; it іѕ the fact that the networks can be accessed and are often more efficient in the period of time of “after hours” trading. It is a particularly relevant benefit for FX transactions.

ECN Forex Brokers are also highly efficient for all traders operating with EAѕ (Expert Advisors) for automated trading, as the speed of execution is accelerated. Certain brokers are configuring to serve institutional investors; others are designed to serve retail investors. There are others that are compiled to cross-over between both sectors, ensuring that retail traders can experience similar levels of quotes and spreads to that of institutions.

Advantages and Benefits of the Electronic Communications Network

 

 

The usage of the ECN Forex brokers gives access to investors a method to be able to trade excluding from conventional trading hours; it offers an instrument for traders who cannot be active during traditional market hours andor traders who prefer the elasticity provided by wider availability. ECN Forex brokers avoid wide spreads that are normally common while using a conventional broker, and offers lower commissions than most.

Another advantage of ECN brokers is privacy, since it offers a level of anonymity to those who prefer it. This aspect can be beneficial for traders that are involved in making larger transactions. The third advantage of ECN Forex brokers would be the transparency, or how the information is sent and received. All ECN brokers have admission to the same feed and they trade at the particular price that is offered. A specific amount of price history is also available for traders, making it easier to analyze trends in the financial market; this aids in limiting any manipulation of prices, since there is information of past and current prices available for every trader. Also, none of the traders have any advantage over another, since they all have the same access of information.

Disadvantages and Drawbacks of ECN Forex Brokers

The biggest and main disadvantage to traders using ECN brokers is that there is a price to pay for its usage. It is fairly common that the commissions and fees for ECN brokers are higher than non-ECN brokers. Any commission that is based on per-trade can be really expensive and it can even influence a trader’s bottom line and their profits.

ECN Forex brokers have various advantages, but the costly aspect is a huge drawback. This would cause many traders to reconsider using ECN brokers and look for other types of Forex brokers.

The main target audience for ECN Forex brokers are those who cannot be involved or trade during the active market hours.