8  Best ECN Forex brokers for 2024

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 an 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.

What is an ECN Broker?

ECN stands for Electronic Communication Network. An ECN broker connects traders to a network of liquidity providers, and sits at the centre of this communication network, like a spider in a web. 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. 

Slippage and requotes

ECN Brokers have a higher risk of slippage and requotes. Because ECN brokers rely on external liquidity to match client’s 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. 

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 Brokers with ECN Trading Accounts

Here is our list of all brokers with ECN trading accounts that we have reviewed – sorted by overall score. 

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Broker	Broker Score	Regulators	Min. Deposit	Max. Leverage (Forex)	Trading Cost	Islamic Account	Total # CFDs	No. of FX Pairs	Crypto Pairs	Trading Commission	Compare
	4.56 /5 Read Review		USD 200	500:1	USD 8	Yes	1744	64	18	7 USD / lot - Raw Spread Account
	4.44 /5 Read Review		USD 0	500:1	USD 10	Yes	188	70	11	7 USD / lot - PRO account
	4.43 /5 Read Review		USD 0	500:1	USD 11	Yes	4150	46	27	7 USD / lot - ThinkZero Account
	4.40 /5 Read Review		AUD 100	500:1	USD 7	Yes	10162	70	11	6 USD / lot - RAW Accounts
	4.37 /5 Read Review		USD 10	2000:1	USD 15	Yes	1803	62	0	From 4 USD / ECN Accounts
	4.35 /5 Read Review		USD 50	500:1	USD 6	Yes	900	46	0	6 USD / lot - ECN Account
	4.33 /5 Read Review		USD 5	3000:1	USD 7	Yes	254	37	100	6 USD / lot - ECN Account
	4.33 /5 Read Review		USD 0	500:1	USD 4.50	Yes	252	85	14	4.5 AUD / lot (EUR/USD)
	4.28 /5 Read Review		USD 0	500:1	USD 8	Yes	26115	70	10	6 USD
	4.25 /5 Read Review		USD 5	500:1	USD 7	No	146	80	0	6 USD / Lot
	4.24 /5 Read Review		USD 1	500:1	USD 7.80	Yes	1033	80	11	None
	4.08 /5 Read Review		USD 50	500:1	USD 10	Yes	2489	63	9	Fees Included in Spread
	4.03 /5 Read Review		GBP 1	1000:1	USD 8	Yes	878	49	43	6 USD / lot - ECN Account
	3.88 /5 Read Review		USD 0	500:1	USD 6	Yes	104	71	14	None
	3.87 /5 Read Review		USD 50	500:1	USD 15	Yes	151	50	14	Fees Included in Spread
	3.64 /5 Read Review		USD 50	1000:1	USD 22	Yes	285	83	0	On select STP/ECN Accounts
	3.63 /5 Read Review		USD 10	1000:1	USD 20	Yes	79	33	15	0,007% / Trade - Zero Account
	3.61 /5 Read Review		USD 0	200:1	USD 13	Yes	164	48	7	7 USD / lot - Zero Account
	3.60 /5 Read Review		USD 0	1000:1	USD 6	Yes	8071	43	9	6 USD / lot

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.

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.

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:

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:

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 Malaysia 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 State of the Market 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.

 

Vanessa Marcos
Financial Writer

Vanessa joined the team in 2023. Born and raised in southern Portugal, she has a BA in Journalism and a Master’s in Literary Theory, both from Lisbon University. Since 2011, she has worked in social media, copywriting, content management, ghost-writing, and SEO. Vanessa loves to write, and although she is a generalist in digital marketing, she always draws on her creativity in her work. She is constantly researching new subjects and finds the analytical depth of Forex trading fascinating.