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AuthorBy Chris Cammack
Updated: May 5, 2022

ECN brokers are attractive because they offer direct market access, removing any conflict of interest with the trader, while oftentimes reducing trading costs by charging a volume-based trading commission on top of a tight spread fee. 

To test these brokers, we opened a live trading account and deposited £200. As a part of our test, we confirmed their status as ECN brokers by studying their client agreements and reviewing their trading costs to ensure they always have variable spreads with an additional commission. We verified the absence of dealing desks, that we experienced both positive and negative slippage, and no trading restrictions were imposed. These are the best ECN brokers in the UK for 2022, according to our testing and our research.

  • Pepperstone - ECN Broker with No Minimum Deposit
  • Tickmill - ECN Account with the Lowest Trading Costs
  • Axi - Best ECN broker on MT4
  • ThinkMarkets - Best MT5 ECN Account
  • FXTM - ECN Broker with Low Commissions

FCA Regulated ECN Brokers Comparison

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Broker
Overall Rating
Official Site
Min. Deposit
Max. Leverage
EUR/USD - Standard Account
Trading Cost - Standard Account
EUR/USD - Raw Spread
Trading Commission
FCA (UK) Regulated
Total CFDs
Currency Pairs
Platforms
Trading Desk
Website Language: English
Support Language: English
Compare
Pepperstone
4.61 /5
Read Review
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Your capital is at risk
GBP 030:10.60 pipsUSD 60.17 pipsFrom 7 USD / lot - Razor Account 070MT4, MT5, cTraderNDD
Tickmill
4.48 /5
Read Review
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GBP 10030:10.00 pipsUSD 40.10 pips4 USD / lot 20962MT4, MT5STP
Axitrader
4.34 /5
Read Review
Visit Broker >
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GBP 030:11.00 pipsUSD 100.00 pips7 USD / lot - PRO account 18870MT4ECN/DMA
ThinkMarkets
4.18 /5
Read Review
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GBP 030:11.20 pipsUSD 120.00 pips7 USD / lot - ThinkZero Account 415046MT4, MT5, ThinkTraderECN/DMA, STP
FXTM
4.27 /5
Read Review
Visit Broker >
Your capital is at risk
GBP 1030:11.50 pipsUSD 150.00 pipsFrom 4 USD / ECN Accounts 180362MT4, MT5ECN/DMA, Market Maker

How to compare ECN brokers

ECN brokers use high-speed networks to find the best pricing available and execute trade orders as quickly as possible. Where a ECN broker gets its market pricing and how fast it executes trades should always be considered alongside other more standard broker metrics. When comparing ECN brokers, always consider:

Trading cost: Traders seek out ECNs brokers because of their low trading costs. Trading costs on ECN accounts are a combination of the spread and a commission. Trading costs for one lot of EUR/USD at ECN brokers will range from 6 USD to 18 USD, depending on the broker’s trading conditions.

Execution quality: A combined metric used to discuss execution speed, slippage and rejection rate, execution quality describes the connection between the broker and the market and will directly impact the level of control a trader has over their positions. A high-grade ECN broker will have fast execution speeds, which leads to less slippage in pricing between when the order is executed and when it is opened, and less order rejection due to unavailable counterparties. Better execution quality will produce fewer unintentional losses.

Execution venues: ECN brokers are never counterparty to client trades. Instead, it uses its network to place trades with third parties. These third parties are called execution venues. The more execution venues an ECN broker has, the more competition there will be for its client’s trades, leading to lower spreads and lower overall trading costs for traders.

Tradable Assets: A good ECN broker will offer clients a larger number of FX Pairs and other CFD assets to trade. Having a limited set of trading assets can negatively affect the traders, as they would miss out on trading opportunities.

Regulation: Regulators monitor the activities of the broker and the trading desk. Unregulated ECN brokers are dangerous as there is no way of telling if they are ECN brokers without making a deposit and opening a trade. Brokers regulated by the FCA (UK), ASIC (Australia) or MAS (Singapore) have better reputations for enforcement and thus ensure their member ECN brokers strictly follow protocols designed to protect clients and their trades.

Trading tools: Leading ECN brokers will offer traders a free Virtual Private Server (VPS) service, guaranteeing high-quality execution around the clock. Other trading tools offered by the best ECN brokers include indicator packages to assist with automated trading and in-platform market analysis tools such as Trading Central or Autochartist.


Pepperstone – ECN Broker with No Minimum Deposit

Who Pepperstone is for: Traders looking for a low-cost ECN broker with no minimum deposit and a choice of trading platforms.

Why we like Pepperstone: Pepperstone’s low-cost ECN trading service, fast trade execution, and range of third-party trading platforms has made it popular amongst experienced traders and serious beginners around the world. Pepperstone’s Standard Account has no commission and spread fees averaging 0.69 pips on the EUR/USD, making it one of the lowest-cost trading accounts available. For traders who prefer raw spreads, the Razor Account has spreads down to 0 pips on the EUR/USD and a commission of 7 USD per trade. With execution speeds down to 30ms, both accounts are suitable for scalpers and other traders who rely on bots for automated trading. Pepperstone supports all three major trading platforms: MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader, which is easier to learn but still has the sophisticated automation tools found in MT4 and MT5. Serious beginners looking for an ECN broker should take note that Pepperstone has scrapped its minimum deposit requirement, though it still recommends starting with at least 200 USD.

Pepperstone drawbacks:  Pepperstone does not offer its own easy-to-use trading platform so beginners will have to learn how to use MT4, MT5 or cTrader. Beginners who decide to open a Razor Account will also need to calculate commission costs. Both issues can be reduced by using the cTrader trading platform, which has a flat commission structure and is easier to learn than MT4 or MT5.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • Limited market analysis
AlertAccepts UK Clients. Average spread EUR/USD 0.60 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and the DFSA. 75.8% of traders lose money with this provider.

TickMill – ECN Account with the Lowest Trading Costs

Who Tickmill is for: Traders looking for the lowest cost ECN account available on the MT4 and MT5 trading platforms

Why we like Tickmill: Tickmill is an MT4 and MT5 broker with some of the lowest trading costs available. While the Classic Account has relatively wide spreads and no commission, the Pro Account offers variable spreads down to 0 pips and a 4 USD (round turn) commission – one of the lowest commissions in the industry – and only a 100 USD minimum deposit. It’s impossible to find another FCA-regulated ECN broker with this combination of low fees and a low minimum deposit. For professional traders, Tickmill has a VIP Account with even lower commissions (down to 2 USD round turn) but requires a minimum balance of 50,000 USD. In addition, Tickmill has a selection of excellent trading tools including AutoChartist, Myfxbook and a subsidised VPS service.

Tickmill drawbacks: Like some other brokers on this list, Tickmill isn’t a true ECN broker. Rather it uses STP execution and offers ECN-pricing. Some traders may also be disappointed in Tickmill’s thin range of assets, with only 80 share CFDs and a handful of commodities to trade.

Pros
  • Tight spreads
  • Well regulated
  • Fast and free withdrawals
Cons
  • Limited base currencies
AlertAccepts UK Clients. Average spread EUR/USD 0.00 pips with 4 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 platform support. Tickmill is regulated by CySEC, FCA, FSCA, and the FSA-Seychelles. 73% of traders lose money with this provider.

Axi – Best ECN broker on MT4

Who is Axi for: Traders who only use the MT4 trading platform and want an ECN broker with great trading tools and aren’t too bothered about trading shares.

Why we like Axi: Axi, formerly AxiTrader, stands out for three reasons: First off, it’s an MT4-only broker, so if you want to use any other trading platform you can look away now. Secondly, it’s an ECN broker with low fees, no minimum deposit requirement, and two simple accounts: One with commission and one without. Finally, it has a fantastic collection of trading tools that it offers for free to its clients. These include Axi’s MT4 NexGen plugin which includes an advanced sentiment indicator, a correlation trader, and an automated trade journal. Other free trading tools include Autochartist, MyFxbook, and PsyQuationAutochartist is a tool that automatically identifies trading opportunities, MyFxBook is one of the world’s most popular copy-trading platforms and PsyQuation is an AI trade diagnostic that helps traders learn from their mistakes. And while the fees on its trading accounts aren’t the lowest available, they are below the industry average. The Pro Account is good value, with spreads averaging 0.1 pips on the EUR/USD and a 7USD commission.

Axi drawbacks: The obvious drawback here is Axi’s insistence on only providing support for the MT4 trading platform. Apart from putting some traders off, this also results in a smaller range of trading assets. Axi only recently added a handful of share CFDs to its product line-up. That said, Axi does have a good range of cryptocurrencies to trade.

Pros
  • Low minimum deposit
  • Tight spreads
  • Innovative trading tools
Cons
  • MT4 only
  • Limited range of assets
AlertAccepts UK Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. Axi Group is regulated by the FCA, ASIC and the DFSA. 75.6% of traders lose money with this provider.

ThinkMarkets – Best MT5 ECN Account

Who ThinkMarkets is for: Traders who want the MT5 platform, low fees on their Forex trades and 24/7 customer service.

Why we like ThinkMarkets: The ThinkMarkets ThinkZero Account is a popular account with ECN-pricing on the MT5 trading platforms. Trading costs and conditions are standard compared to other brokers on this list, with spreads down to 0 pips on the EUR/USD and a 7 USD round-turn commission. ThinkZero Account holders do get a personal account manager though, and access to leverage of 1:500. The greater attraction here is the feature-filled MT5 trading platform, which also allows access to ThinkMarket’s large range of shares to trade. Traders will also have 24/7 customer support, allowing new clients to get set up over the weekend.

ThinkMarkets drawbacks: The main drawback here is that the ThinkZero Account is not a pure ECN account but instead a market-execution STP account with ECN-pricing. Additionally, the cost of entry is relatively high, with a minimum account balance of 500 USD needed to open this account.

Pros
  • Low minimum deposit
  • Well regulated
  • Great platform choice
Cons
  • Limited market analysis
  • Non-transparent spreads
AlertAccepts UK Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. ThinkMarkets is regulated by the FCA, FSCA, FSA Seychelles and ASIC.

FXTM – ECN Broker with Low Commissions

Who FXTM is for: Traders who don’t mind paying a higher minimum deposit for low trading fees and a great copy-trading platform.

Why we like FXTM: Traders looking for an ECN account with low fees will be immediately drawn to FXTM’s Advantage. Spreads start at 0 pips on the EUR/USD and commission is only 4 USD round-turn, lower than most other ECN brokers. Available on both the MT4 and MT5 trading platforms, the Advantage Account requires a minimum deposit of 500 USD. For traders who prefer commission-free trading, the Advantage Plus Account offers a wider average spread of 1.5 pips (EUR/USD) and no commission. FXTM also provides FXTM Invest, a powerful copy-trading tool, though this is only available on MT5. Both the Advantage and Advantage Plus accounts offer trading on 48 currency pairs, 3 spot metals, 14 spot CFDs on the MT4 platform, and trading on 33 currency pairs, and 2 spot metals on the MT5 platform.

FXTM drawbacks: The obvious drawback here is the high minimum deposit of 500 USD. This will put FXTM’s ECN accounts out of reach for most beginners. Another minor gripe is that traders cannot use the cTrader trading platform at FXTM.

Pros
  • Good for beginners
  • Excellent education
  • Well regulated
  • Low minimum deposit
  • Copy trading accounts
Cons
  • Expensive withdrawals
AlertAccepts UK Clients. Average spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. MT4 platform supported. FXTM Group regulated by CySEC, FCA, FSCA and FSC. 81% of traders lose money with this provider.

What does ECN Stand for in Forex Trading?

ECN stands for Electronic Communication Network.

What is an ECN Forex Broker?

An ECN broker connects traders to a network of liquidity providers, unlike a Market Maker broker which takes trades on to its own books. An ECN broker sits at the centre of this communication network, like a spider in a web, while the other members of the network are liquidity providers like banks, hedge funds and other brokers.

Every time a client places a trade with an ECN broker it collects prices from the members of this network and presents the trader with the tightest spread it could find to fulfil the volume requirement. Because the liquidity providers in this network are competing for your trade, ECN brokers have very tight spreads which can approach 0 pips.

ECN Broker Fees & Commission

ECN brokers do not make any money from the spread. Instead, they will charge a commission, which is their fee for playing matchmaker and finding a counter-party to your trade. Traditional brokers (Market Makers) have wider spreads because they charge their fee in the spread.

Because ECN brokers only act as an intermediary for a trade, they do not make money when traders lose. In fact, the reverse is true. Over time, a successful trader pays more in commission to an ECN broker, so ECN brokers want their clients to be profitable.

Conflict of Interest

Traders may prefer to trade with ECN brokers because there is no conflict of interest between trader and broker. Most market maker brokers will trade against their clients in their role as the counter-party, which means the broker makes money when their clients lose. Since ECN brokers earn money from client trade volume on all instruments traded, ECN brokers make more money when traders profit. 

Happy Trader

Slippage and requotes

ECN Brokers have a higher risk of slippage and requotes. Because ECN brokers rely on external liquidity to match clients’ trades, they are not always posted instantly. 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 Minimum Deposits

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.

Which is the Best ECN Broker?

Axi is the best ECN broker. With competitive pricing on raw spreads, high liquidity, and fast execution Axi won our Award for Best ECN Broker of 2020

Axi

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.

All FCA Brokers with ECN Trading Accounts

Here is our list of all reviewed FCA-regulated brokers with ECN trading accounts sorted by overall score. 

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Broker
Overall Rating
FCA License
Min. Deposit
Max. Leverage (Forex)
Regulators
Cost of Trading
EURUSD (Best)
GBPUSD (Best)
USDJPY (Best)
Total # CFDs
No. of FX Pairs
Trading Commission
Platforms
Compare
Axitrader
4.34 /5
Read Review
509746GBP 030:1FCA Regulated Forex BrokersASIC Regulated BrokersFinancial Markets Authority of New ZealandDFSA Regulated Forex BrokersUSD 100.00 pips0.10 pips0.10 pips188707 USD / lot - PRO accountMT4
FXTM
4.27 /5
Read Review
600475GBP 1030:1CySEC Regulated BrokersFCA Regulated Forex BrokersFinancial Services CommissionUSD 150.00 pips0.20 pips0.00 pips180362From 4 USD / ECN AccountsMT4, MT5
Valutrades
4.25 /5
Read Review
586541GBP 530:1FCA Regulated Forex BrokersThe Seychelles Financial Services AuthorityUSD 70.10 pips0.40 pips0.10 pips146806 USD / LotMT4, MT5
ThinkMarkets
4.18 /5
Read Review
629628GBP 030:1FCA Regulated Forex BrokersASIC Regulated BrokersThe Seychelles Financial Services AuthorityCySEC Regulated BrokersUSD 120.00 pips0.00 pips0.00 pips4150467 USD / lot - ThinkZero AccountMT4, MT5, ThinkTrader
Infinox
4.03 /5
Read Review
501057GBP 130:1Securities Commission of the BahamasFCA Regulated Forex BrokersFinancial Services CommissionFinancial Services Conduct AuthorityUSD 80.20 pips0.40 pips0.40 pips878496 USD / lot - ECN AccountMT4, MT5
Vantage FX
3.63 /5
Read Review
590299USD 20030:1FCA Regulated Forex BrokersASIC Regulated BrokersCayman Islands Monetary AuthorityVanuatuUSD 100.00 pips0.50 pips0.40 pips318464 USD / lot - ECN AccountsMT4, ProTrader
ICM Capital
3.61 /5
Read Review
USD 0200:1FCA Regulated Forex BrokersFinancial Services CommissionFinansinspektionenFinancial Services Authority – St. Vincent & the GrenadinesUSD 131.30 pips1.80 pips1.30 pips164487 USD / lot - Zero AccountMT4, MT5, cTrader
IronFX
3.54 /5
Read Review
585561GBP 5030:1CySEC Regulated BrokersFCA Regulated Forex BrokersASIC Regulated BrokersFinancial Services Conduct AuthorityUSD 220.00 pips0.00 pips0.00 pips29083On select STP/ECN AccountsMT4

What is the difference between an ECN Broker and a Market Maker Broker?

When you place a trade with an ECN broker, the counter-party to your trade will be a liquidity provider from the broker’s network. 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 are also known as dealing desk brokers, as all trades will be filled at the rates set by the broker’s internal dealing desk.  This business model, which means a market maker will always profit from their clients’ losses, generates an inherent conflict of interest that many traders are cautious of.

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. These would be brokers like IG Markets, FxPro, AvaTrade, XM and eToro

But, Market Maker brokers are not a common choice for experienced Forex traders. Traders are limited to trading with one counter-party who is always trading against you and never on the open market with dynamic spreads.

However, if you do want instant execution of your trades and you don’t want to pay a commission, a trusted market maker is a good idea.

How to Identify an ECN Broker?

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.

Read the Broker Agreement

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 always a foolproof method of determining a broker type. See below for an extract from Pepperstone’s execution policy showing that they are an ECN broker.

Pepperstone Order Execution

Check that Spreads are Variable

ECN’s offer tight spreads and charge a commission per trade, and the spreads will also be variable. Fixed spreads are only offered by Market Makers, as they are not taken from a live and dynamic market. Below you can see that Axi publishes its live spreads on its website, these are variable and are taken from their network of liquidity providers.

Axi Spreads

Look for Trading Restrictions

ECN brokers will never restrict your trading methods or trade size. This means that all automated trading, scalping, hedging and large order sizes (anything of 5 lots or over) will all be allowed. If a broker restricts any of these then it is not an ECN broker.

A good example of a broker with these restrictions is Plus500, a well-known market maker:

PLus500 Restrictions

Slippage will be Positive and Negative

Slippage is the difference between the execution price and the order price at the time the order is submitted for execution. Slippage is a normal aspect of trading with ECN brokers, particularly for orders of a larger size and during times of thin liquidity and/or volatile market conditions.

Slippage can both positively and negatively impact your trading position. If you find that you are only experiencing negative slippage, then your broker is not using an ECN execution method. Another well known ECN broker is FxPro, which is dedicated to full transparency and always publishes its slippage statistics, see below for its 2019 figures:

FXPro Slippage

Summary

So, while ECN brokers do not have the inherent conflict of interest present with market makers, a commission will always be charged on your trades. ECN accounts will also require a higher minimum deposit – putting them out of reach for many beginner traders.

Are ECN brokers objectively better than market makers? This is not necessarily the case. All brokers we work with are trustworthy and well-regulated and broker choice is always down to personal preference. Whether you go with an ECN broker or a market maker, if you choose one from our list of the best in South Africa you will be in good hands.

FAQs

What is the difference between an ECN Account and a Standard Account?

ECN Accounts will have tighter spreads than a Standard Account, but you will have to pay a commission per trade. Standard Accounts will not have any commission, but spreads will be wider.

How do ECN Brokers Make Money?

ECN Brokers make money by charging traders a commission per trade. Because they pass pricing on directly from their liquidity providers, they do not charge a fee in the spread.

Which is better, ECN Brokers or ECN/STP Brokers?

ECN/STP brokers are better because they will have less slippage and a faster execution speed than a pure ECN broker.

STP (Straight Through Processing) is the method of the transaction – with STP your order is sent directly to the counterparty through the Financial Information Exchange (FIX) protocol. The FIX protocol decreases trade execution time, reduces slippage, and ensures that traders get the best available pricing.

The STP protocol can be used by market-maker brokers as well as ECN brokers, and some brokers use a hybrid formula, where they will sometimes be the counterparty, and other times use an external liquidity provider. While this does lead to less slippage, it does mean that some trades will have a conflict of interest.

In most cases choosing a hybrid broker is the best way to go, as they will give you the most options.

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

Our Methodology

Our State of the Market Report and Broker Directory are the results of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.

All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and sifting through the fine print. Learn more about how we rank brokers

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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