By Jeffrey Cammack Author Information Updated: June 30, 2020

ECN Forex brokers are brokers that use electronic communications networks to provide direct access to currency markets. ECN brokers are distinct from Market Maker – or dealing desk – brokers, who instead act as the market.

With an ECN broker, the counterparty to your trades is never the broker themselves but another market participant. Because ECN brokers consolidate prices from several market participants, they usually offer lower spreads than market makers, though they will charge a commission for this service.

These are the best FCA regulated ECN Forex brokers in 2020, compared by trust, reputation, platform support and trading conditions.

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  • Broker
    Pepperstone

    Pepperstone  - Best ECN Broker

    REGULATED BY
    FCA FCA
    ASIC ASIC
    DFSA DFSA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 200
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Founded in 2010, Pepperstone is an Australian ECN broker known for tight spreads, ultra-fast trade execution and broad platform support. Pepperstone's award-winning, 24-hour support provides the foundation for its excellent customer service, where personalised assistance is available via several methods.

    As our highest rated pure ECN broker, if you want to pay a small commission for tighter spreads, you won't find a better broker than Pepperstone.

    Pros

    • Well regulated
    • Tight spreads
    • Great platform choice
    • Wide range of assets

    Cons

    • High minimum deposit
    • Limited market analysis
    Account Spread From Commission Execution Min. Deposit
    Razor 0.0 pips AUD$ 7 ECN USD 200 Account Details
    Standard 1.0 pips None ECN USD 200 Account Details
    Swap-free 1.0 pips None ECN USD 200 Account Details
  • Broker
    IronFX

    IronFX  - Most Trusted Broker

    REGULATED BY
    CySEC CySEC
    FCA FCA
    ASIC ASIC
    FSCA FSCA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    With a huge range of account types, a good micro account and over 80 tradeable currency pairs, IronFX has something for everyone. A globally recognised Forex broker with award-winning education and market analysis, IronFX has also recently introduced market execution accounts with ultra-low spreads.

    For beginners who want to learn to trade on the MT4 platform, and experienced traders looking for strong international regulation, IronFX is an excellent choice in a broker.

    Pros

    • Well regulated
    • Tight spreads
    • Wide range of assets

    Cons

    • Expensive withdrawals
    Account Spread From Commission Execution Min. Deposit
    Live Fixed Spread 2.2 pips None Instant USD 100 Account Details
    Live Floating Spread 1.1 pips None Instant USD 100 Account Details
    Live Zero Spread 0.0 pips $18 Instant USD 500 Account Details
    STP/ECN No Commission 1.7 pips None ECN/STP USD 500 Account Details
    STP/ECN Zero Spread 0.0 pips $7.50 ECN/STP USD 500 Account Details
  • Broker
    Axitrader

    Axitrader  - Best Overall Broker

    REGULATED BY
    FCA FCA
    ASIC ASIC
    DFSA DFSA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 5
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    AxiTrader is an ASIC and FCA regulated ECN broker for serious traders. While the trading platform choice is limited to MT4, Axitrader has received industry recognition for their setup including Best MT4 Broker 2018 (Compare Forex Brokers Australia) and Best MT4 Provider 2018 (UK Forex Awards).

    Both accounts at AxiTrader require no minimum deposit, though a minimum of 200 USD is recommended. Spreads are tight, commission on the Pro Account is competitive, and educational and analytical support is good for beginners.

    Pros

    • Low minimum deposit
    • Wide range of assets
    • Well regulated
    • Tight spreads

    Cons

    • Poor customer service
    • Limited demo account
    Account Spread From Commission Execution Min. Deposit
    MT4 Pro Account 0.1 pips $7 Market USD 5 Account Details
    MT4 Standard Account 1.0 pips None Market USD 5 Account Details
  • Broker
    Admiral Markets

    Admiral Markets  - Best Trading Platforms

    REGULATED BY
    ASIC ASIC
    CySEC CySEC
    FCA FCA
    Trading Desk Type
    Trading Conditions
    11110
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Founded in 2001, Admiral Markets is home to the MetaTrader Supreme Edition and offers reliability, market leadership and modern trading. A global presence, peerless trading education, varied account types and competitive trading conditions have attracted both beginner and experienced traders to the brand.

    Additionally, most Admiral Markets customers have free access to Trading Central - providing independent market insight and technical analysis - and the company has one of the best cryptocurrency offerings on the market.

    Pros

    • Well regulated
    • Excellent education
    • Wide range of assets

    Cons

    • Expensive withdrawals
    Account Spread From Commission Execution Min. Deposit
    Trade.MT4 0.5 pips None Market USD 100 Account Details
    Trade.MT5 0.5 pips None Market USD 100 Account Details
    Zero.MT4 0.0 pips $1.8-$3.0 Market USD 100 Account Details
    Zero.MT5 0.0 pips $1.8-$3.0 Market USD 100 Account Details
  • Broker
    Capital Index

    Capital Index  - Best Trading Conditions

    REGULATED BY
    FCA FCA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Capital Index was founded in 2014 by industry veterans to meet the needs of serious traders. It quickly started winning awards, including STP/ECN broker of the year and has grown its client base substantially over the last six years.

    Regulated by the FCA and with good, simple trading conditions across three account types, Capital Index is an ideal brokerage for experienced traders looking for a simple approach and MT4 support.

    Pros

    • Tight spreads
    • Fast and free withdrawals
    • Wide range of assets

    Cons

    • Limited platform choice
    • Limited education
    • No swap-free account option
    Account Spread From Commission Execution Min. Deposit
    Advanced Account 1.4 pips None STP USD 100 Account Details
    Copy Trading 1.4 pips None STP USD 500 Account Details
    Pro Account 1.0 pips None STP USD 5000 Account Details

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Why Trade with an ECN Forex Broker?

Brokers come in two distinct types – market makers and direct market access, the most common of which are ECN brokers. To understand what an ECN broker is, we need to understand what a market maker is and how the two differ.

Market makers have their name because they are the market – when you place a trade with a market maker you are placing a trade with the broker, not with the wider Forex market, and the broker will be the counterparty to your trade. In essence, market makers are betting against you – if you lose money on that trade, the broker is going to profit.

There is an obvious conflict of interest inherent in this business model and, for this reason, some traders prefer to have a neutral party as a conduit for their trading.

There are several other benefits of trading with an ECN Forex broker:

  • Spreads: The best part of trading with an ECN broker is the tight spreads. At times of high volatility, spreads can sometimes be down to zero or even briefly inverted. But, because spreads are variable with ECN brokers, they can also widen in times of low volume.
  • Lower Trading Cost: The downside to having tight spreads is the commission paid on each trade, but even with commission paid on each trade, ECN brokers generally have a lower cost per trade than non-ECN brokers.
  • High Maximum Trade Size: ECN brokers can handle much larger trades than market maker brokers, as orders do not have to be processed by a dealing desk. For this reason, professional traders often use ECN brokers over market makers.

Keep in mind that the high volatility experienced with ECN brokers can sometimes be overwhelming for beginner traders. Still, scalpers will find it much easier to make money than with a market maker broker. Another issue with ECN brokers is the high incidence of slippage (a change in price between confirming a trade and the trade being posted), especially at times of low liquidity.

How To Choose an ECN Broker?

Choosing an ECN broker is similar to choosing any broker, as most of the usual rules apply. Most true ECN brokers are safe due to the execution model, but it is essential to look at the detail of each broker to find out what differentiates them from each other.  When looking for an ECN Forex broker, it is essential to judge them on the following areas:

  • Regulation: This is essential, as a common scam broker approach is to claim to be an ECN but operate a dealing desk. To avoid this, choose a well-regulated ECN broker, with oversight from the FCA, CySEC or ASIC.
  • Trading Conditions: This includes what kind of spreads are available, how much leverage is offered, and how many currency pairs are available. These factors will directly impact your profit or loss, so you don’t want any surprises.
  • Commission: Commission is an unavoidable aspect of all ECN brokers. It’s also important to consider what currency the commission is charged. If your account currency is different from the commission currency, you will want to be mindful of the exchange rate.
  • Trading Platform: MetaTrader 4 is still the industry standard, but many brokers offer MetaTrader 5 and/or their proprietary platforms. ECN brokers will often support cTrader as it is built specifically for market execution and only allows for minimal broker interference.
  • Minimum Deposit: Most ECN brokers have a relatively high required minimum deposit, with higher minimum deposits often linked to better trading conditions. In our reviews, we always highlight the minimum deposit available regardless of the broker type.
  • Deposit and Withdrawal Methods: All brokers accept traditional payment types such as debit/credit cards and bank transfers, many accept online payments through Skrill and Neteller, and some will also accept Bitcoin. Always check for deposit and withdrawal fees, a few brokers charge a percentage fee for some withdrawals methods, making large drawdowns very expensive. 

But how are ECN brokers different?

The clue is the name: ECN (Electronic Communication Network). ECNs are so-called because they rely on a network of market participants (usually large lenders such as banks) to serve as counterparties to Forex trades. When you post a trade with a true ECN, they will find a third-party to take the other side of your trade, removing the conflict of interest present with a market maker.

ECN brokers will charge a commission for this service (as they cannot profit from your trade), but spreads tend to be much tighter than with market makers. At times of market volatility on major currency pairs, you will often see spreads disappear entirely, down to zero pips. Another thing to remember with pure ECN brokers is that you may have delays to trade execution, resulting in requotes and slippage – this can be particularly difficult for scalpers in a high-volume market.

Another acronym you will often see in combination with ECN is STP (as in ECN/STP). STP is a 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.

Summary

So, while ECN brokers do not have the inherent conflict of interest present with market makers, there are more considerable trading risks involved, and the commission will always be charged on your trades. You will also often find that ECN accounts will require a higher minimum deposit – putting them out of reach of a lot of new traders.

Are ECN brokers objectively better than market maker? I don’t believe this to be the case. All the market makers 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 lists, you will be in good hands.

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)

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Our State of the Market Report and Broker Directory are the result 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 by sifting through the fine print. Learn more about how we rank brokers

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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