ECN Forex Brokers

Settling for one ECN Forex broker can be a hard task due to the mostly unregulated nature of the forex market. This is different from the stock and futures exchanges. The most spoken of ECN forex brokers have created a wide range of ECN trading account options and lowered commissions for their clients. Electronic Communications Networks (ECN) present an edge compared to Dealing Desks, who more than not, transact against some of their clients which is a bad case of conflict of interest.

XM Group

XM Forex Review

Minimum deposit

5$

Regulation

CySEC, FCA, ASIC

Bonus

30$, 50%+20%

Maximum leverage

30:1

Year founded

2009

Trading platform

MT4, MT5, WebTrader

Forex.com

Forex.com Review

Minimum deposit

250$

Regulation

FCA, NFA

Bonus

N/A

Maximum leverage

200:1

Year founded

1999

Trading platform

MT4

CFD Global

CFDGlobal Review

Minimum deposit

$250

Regulation

CySEC

Bonus

Premium Package

Maximum leverage

1:300

Year founded

2016

Trading platform

MT5, WebTrader

IQ Option Review

IQ Option Review

Minimum deposit

$10

Regulation

CySEC

Bonus

N/A

Maximum leverage

1:30

Year founded

2013

Trading platform

WebTrader

Markets.com

Markets.com review

Minimum deposit

100$

Regulation

CySEC, FSB

Bonus

N/A

Maximum leverage

300:1 T&C Apply

Year founded

2008

Trading platform

Indigo, MT5, Webtrader, MobileTrader IOS/Android

Plus500

Plus500 Review

Minimum deposit

100$

Regulation

FCA

Bonus

N/A

Maximum leverage

30:1

Year founded

2008

Trading platform

Custom

Z.Com Trade

Z.com Trade Review

Minimum deposit

5$

Regulation

FCA

Bonus

N/A

Maximum leverage

200:1

Year founded

2005

Trading platform

MT4

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What is an ECN Forex Broker?

Alternatively  known by the term ‘No-Dealing Desk’ brokers, they simply act as middle men passing trades from their clients to the direct source of liquidity or in some cases matching trades with other participants using a broker’s ECN.

An ECN broker is an expert in forex financial matters and utilizes communications networks to give clients access to money markets and other players. An ECN brokers gathers buying and selling prices lists from across a wide range of participants and alerts his/her clients better options than they would get from another broker not utilizing ECNs (electronic communications networks).

This breed of brokers deals with online platforms to get a broader reach on trading options for their clients and only ask for a commission, that makes them attractive as for them to make the said commission they would have to offer real value to their clients.

Some traits that have emerged across the board of ECN brokers include:

  • They value privacy – each ECN brokerage firm protects their clients’ identity from transaction to transaction. There is a level of anonymity that denies traceability of accounts and at most access to any other players external to respective transactions.
  • More trade chances – you can access more of the forex market and even approach banks to trade using gazetted figures.
  • They are not seasonal – the financial climate plays little to no effect to your chances of trade using these kinds of brokers. You can trade even in the most volatile of conditions.
ECN Forex Brokers

A lot of traders would obviously opt for this type of trading structure due to the fact that being the middle man, they do not inherit risk, rather they pass it on from one end to the other. This means they get commission rather than accumulate insurance, which is clearly at a huge disadvantage to an unaware section of clients that would have been selected to be on the unfortunate and losing end for a period of time and therefore trade against.

Advantages of using an ECN Forex Broker

ECN brokerages derive profits by effecting commission rates on trades done on behalf of clients. While the commission presents a cost, this kind brokerages still tend to offer better value for money overall.

  • If the client makes a lot of profit, so does the broker, they do not have conflicting interests.
  • A broker gets their commissions regardless of how the trade goes, they don’t have to temper with trades or deprive a client certain details to trade in their selfish win, it is a win win and this removes any chances that the trader will sabotage their clients.
  • There is no limit to the kinds of activities an ECN broker will approach his client with, his drive is to make large commissions and as such a client gets a wider spread of their investments and better returns translate in both parties winning.

Disadvantages of using an ECN FX Broker

Due to the concept of commission in agreement, many ECN brokers prefer clients with sizable minimum deposits, pushing away potentially lucrative clients. Clients that do make the cut have the disadvantage of not being able to predict and set stop losses and can lose their investments in the wide spreads made available with the use of the broker’s networks.