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EditorEditor: Alison HeyerdahlUpdated: April 22, 2024
AuthorAuthor: Chris Cammack

Last Updated On April 22, 2024

Chris Cammack
1

Pepperstone

ECN Broker with No Minimum Deposit

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2

Tickmill

ECN Account with the Lowest Trading Costs

Visit
3

FP Markets

Best ECN Pricing

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4

Axi

Best ECN broker on MT4

Visit
5

IC Markets

Best ECN Broker for Beginners

Visit
6

FXTM

ECN Broker with Low Commissions

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7

ThinkMarkets

Best MT5 ECN Account

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8

Fusion Markets

Low-Cost ECN + 3 Copy Trading Platforms

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These are the best ECN brokers in the UK for 2024.

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Broker
Broker Score
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
Visit Broker >
89%74- of retail CFD accounts lose money
GBP 030:11.00 pipsUSD 100.17 pipsFrom 7 USD / lot - Razor Account 1275100MT4, MT5, cTrader, TradingViewNDD
Tickmill
4.58 /5
Read Review
Visit Broker >
70% of retail CFD accounts lose money
GBP 10030:10.00 pipsUSD 60.10 pips6 USD/lot 21062MT4, MT5STP
FP Markets
4.40 /5
Read Review
Visit Broker >
79% of retail CFD accounts lose money
GBP 5030:10.00 pipsUSD 60 pips6 USD / lot - RAW Accounts 1016270MT4, MT5, cTrader, IRESSECN/DMA
Axitrader
4.44 /5
Read Review
Visit Broker >
75.6% of retail CFD accounts lose money
GBP 030:11.00 pipsUSD 100.00 pips7 USD / lot - PRO account 18870MT4ECN/DMA
IC Markets
4.46 /5
Read Review
Visit Broker >
70.81% of retail CFD accounts lose money
GBP 20030:10.10 pipsUSD 80.02 pips7 USD / lot - Raw Spread Account 174464MT4, MT5, cTrader, TradingViewECN/DMA
FXTM
4.27 /5
Read Review
Visit Broker >
81% of retail CFD accounts lose money
GBP 1030:11.50 pipsUSD 150.00 pipsFrom 4 USD / ECN Accounts 180362MT4, MT5ECN/DMA, Market Maker
ThinkMarkets
4.43 /5
Read Review
Visit Broker >
71.89% of retail CFD accounts lose money
GBP 030:11.10 pipsUSD 110.00 pips7 USD / lot - ThinkZero Account 415046MT4, MT5, ThinkTraderECN/DMA, STP
Fusion Markets
4.41 /5
Read Review
Visit Broker >
89% of retail CFD accounts lose money
AUD 0500:10 pipsUSD 4.500 pips4.5 AUD / lot (EUR/USD) 24781MT4, MT5, cTrader, TradingViewECN/DMA

How did FxScouts choose the best ECN brokers?

When comparing the best ECN brokers in the UK, we:

  • Confirmed that the brokers accepted British traders and were regulated by the FCA or other top-tier authorities to ensure trader protection.
  • Ensured that the broker is an ECN or ECN/STP broker by reviewing execution venues and the broker’s Order Execution Policy
  • Assessed the brokers’ trading fees and platform options for UK residents by opening a live account and comparing the spreads on each instrument and platform to other brokers.
  • Tested the execution quality for each broker, including speed, slippage and rejection rate.
  • Checked and tested available tools and features.
  • Reviewed the broker’s educational material and range of sources (such as e-books, webinars, glossary etc), to make sure they cater to all levels of traders, especially beginners.
  • Assessed the broker’s market analysis, including whether it is curated by an in-house research team or third-party providers, the quality of the material, and how frequently it’s updated.
  • Examined deposit and withdrawal options, costs and times for UK residents, e.g. if it’s possible to use instant banking and UK credit cards and what, if any, fees are involved.
  • Contacted customer support through the various channels offered by brokers, checking response time, service quality and whether or not they have a dedicated UK support team and phone number. 

Our Broker Score and Trust Rating

FxScouts’ Broker Score and Trust Rating constantly evolve to reflect the forex market’s dynamics. We ensure transparency by incorporating regulator data and user insights. Our in-depth reviews consider over 200 metrics across seven key categories:

  • Trust Rating: Assessment of broker reliability and reputation
  • Trading Costs: Spreads and fees for clear comparisons
  • Platforms: User-friendliness and features
  • Asset Selection: Forex, stocks, and other available instruments
  • Transactions: Simple and straightforward deposits & withdrawals
  • Education: Support for beginners and developing traders
  • Customer Support: Accessibility, responsiveness, and expertise

Learn how we set the standard for broker reviews. Explore our in-depth review process here.


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4.59 /5
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Tickmill
4.58 /5
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Spreadex
4.26 /5
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FOREX.com
4.62 /5
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IG
4.69 /5
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Pepperstone – ECN Broker with No Minimum Deposit

Broker Score
4.614.61 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

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 worldwide. Pepperstone’s Standard Account has no commission and spread starting at 1.00 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 1.00 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, CySEC, SCB, CMA, BaFin and the DFSA. 75.6% of traders lose money with this provider.

TickMill – ECN Account with the Lowest Trading Costs

Broker Score
4.584.58 / 5
🏦  Min. DepositGBP 100
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

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 6 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. 70% of traders lose money with this provider.

FP Markets – Best ECN Pricing

Broker Score
4.404.40 / 5
🏦  Min. DepositGBP 50
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

While not a pure ECN broker, FP Markets does provide ECN pricing – it streams its pricing directly from its liquidity providers – delivering low spreads but with fast STP execution. With average spreads for EUR/USD at 0.1 pips, GBP/USD at 0.2 pips and USD/JPY at 0.1 pips, FP Markets’ Forex pricing is comparable with Pepperstone and other industry-leading ECN brokers. Commission is also low at 6 USD per lot round turn and the minimum deposit is only 100 GBP.

Winner of the 2020 Best Broker in Australia Award, FP Markets supports MT4 and MT5 on 60+ FX pairs, metals, indices and commodities to trade. And with an Equinix server cluster, most trades are executed in under 40 milliseconds, faster than most ECN brokers. This makes FP Markets an excellent broker for scalping and EA trading on the Metatrader platforms.

Pros
  • Trusted since 2005 with top-tier regulation
  • 100 USD minimum deposit amount
  • Supports MT4 MT5 cTrader and TradingView
  • Spreads start at 1.0 pip and narrow to 0 pips with higher trading volumes
  • Welcoming South African traders with specific regulatory compliance
Cons
  • Notably higher withdrawal fees than competitors
  • Stock CFDs are limited on MT4/MT5 and primarily available through IRESS
  • High leverage up to 500:1 posing risks for inexperienced traders
AlertAccepts UK Clients. Average spread EUR/USD 0.00 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, and cTrader trading platforms available. FP Markets is regulated by CySEC and ASIC.

Axi – Best ECN broker on MT4

Broker Score
4.444.44 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

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.

IC Markets – Best ECN Broker for Beginners

Broker Score
4.464.46 / 5
🏦  Min. DepositGBP 200
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

IC Markets is rare amongst ECN brokers, as it provides a welcoming environment for beginner traders. IC Markets offers an archive of structured course material, detailed independent market analysis, and expert-led webinars. IC Markets also provides excellent 24/7 technical support for the MT4 platform and more general queries.

IC Markets offers two Raw Spread Accounts and a Standard Account, all with variable spreads, on the MT4 platform. The Raw Spread Accounts charge a small commission of 3.50 USD, but spreads are often down to 0 pips, averaging 0.1 pips on the EUR/USD pair. The Standard Account charges no commission but spreads start at 1 pip. IC Markets pricing relies on 25 different liquidity providers ensuring deep liquidity and some of the lowest spreads in the industry.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Great platform choice
Cons
  • High minimum deposit
  • Limited market analysis
AlertAccepts UK Clients. Average spread EUR/USD 0.10 pips with 7 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. IC Markets is regulated by CySEC and ASIC.

FXTM – ECN Broker with Low Commissions

Broker Score
4.274.27 / 5
🏦  Min. DepositGBP 10
🛡️  Regulated By
💵  Trading Cost 
USD 15
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

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.

ThinkMarkets – Best MT5 ECN Account

Broker Score
4.434.43 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 11
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

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 1.10 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.

Fusion Markets – Low-Cost ECN + 3 Copy Trading Platforms

Broker Score
4.414.41 / 5
🏦  Min. DepositAUD 0
🛡️  Regulated By
💵  Trading Cost 
USD 4.50
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2017 in Melbourne, Fusion Markets is an ASIC-regulated ECN broker with exceptionally low trading costs, MT4 and MT5 support, and no minimum deposit requirements. Alongside an excellent range of market analysis materials, Fusion Markets also offers no less than three different copy-trading solutions.

Its own Fusion+ copy trading platform is only available in a proprietary trading platform, but it also offers Duplitrade and Myfxbook Autotrade – one of the largest Forex social trading communities in the world.

In terms of ECN trading, Fusion Markets is one of the lowest-cost brokers in the world. EUR/USD spreads start at 0 pips on its Zero Account with a very low commission of 4.5 AUD. The only drawbacks are a relatively limited number of CFDs (though 85 Forex pairs, many more than most brokers) and no education to speak of, so beginners will have to educate themselves elsewhere.

Pros
  • Low minimum deposits
  • Tight spreads
  • Excellent market analysis
Cons
  • No in-house platform
  • No education
AlertAccepts British Clients. Average spread EUR/USD 0 pips with 0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. Fusion Markets is regulated by ASIC, FSA (Seychelles), & VFSC.

What does ECN Stand for in Forex Trading?

ECN stands for Electronic Communication Network.

What is an ECN broker?

An ECN broker is a Forex broker that uses an electronic communication network (ECN) to connect traders to liquidity providers. ECN brokers are intermediaries and don’t take trades themselves

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?

IC Markets is the best ECN broker. With some of the lowest trading costs in the industry, 20+ liquidity providers, all three major trading platforms, and fast market execution IC Markets won our award for Best Forex ECN broker 2021.

Other highlights include 24/7 customer service, various copy-trading services, and a VPS service. IC Markets combines leading ECN trading conditions with world-class regulatory oversight. Read our full IC Markets 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
Broker Score
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
4.44 /5
Read Review
509746GBP 030:1FCA Regulated Forex BrokersCySEC Regulated BrokersASIC Regulated BrokersDFSA Regulated Forex BrokersUSD 100.00 pips0.10 pips0.10 pips188707 USD / lot - PRO accountMT4
ThinkMarkets
4.43 /5
Read Review
629628GBP 030:1FCA Regulated Forex BrokersASIC Regulated BrokersThe Seychelles Financial Services AuthorityCySEC Regulated BrokersUSD 110.00 pips0.00 pips0.00 pips4150467 USD / lot - ThinkZero AccountMT4, MT5, ThinkTrader
Vantage FX
4.35 /5
Read Review
590299USD 5030:1FCA Regulated Forex BrokersFinancial Services Conduct AuthorityASIC Regulated BrokersCayman Islands Monetary AuthorityUSD 60.00 pips0.50 pips0.40 pips900466 USD / lot - ECN AccountMT4, ProTrader
FXTM
4.27 /5
Read Review
600475GBP 1030:1FCA Regulated Forex BrokersFinancial Services CommissionUSD 150.00 pips0.20 pips0.00 pips180362From 4 USD / ECN AccountsMT4, MT5
IronFX
3.64 /5
Read Review
585561GBP 5030:1CySEC Regulated BrokersFCA Regulated Forex BrokersASIC Regulated BrokersFinancial Services Conduct AuthorityUSD 220.00 pips0.00 pips0.00 pips28583On select STP/ECN AccountsMT4
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

What is the difference between an ECN broker and a market maker?

With an ECN broker, the counterparty to your trade will be a liquidity provider from the broker’s network. With a market maker broker, the broker themselves will counter-party 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 the UK 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: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. 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 about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).

Our Rating & Review Methodology

Our overall Forex Rankings report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers

Editorial Team

 

Chris Cammack
Head of Content

Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.

 

Alison Heyerdahl
Senior Financial Writer

Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.

 

Ida Hermansen
Financial Writer

Ida joined our team as a financial writer in 2023. She has a degree in Digital Marketing and a background in content writing and SEO. In addition to her marketing and writing skills, Ida also has an interest in cryptocurrencies and blockchain networks. Her interest in crypto trading led to a wider fascination with Forex technical analysis and price movement. She continues to develop her skills and knowledge in Forex trading and keeps a close eye on which Forex brokers offer the best trading environments for new traders.

 

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