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AuthorAuthor: Chris CammackPublished: February 20, 2020
EditorEditor: Alison HeyerdahlUpdated: December 8, 2023

Last Updated On December 8, 2023

Chris Cammack

Some traders prefer ECN (Electronic Communication Network) brokers because they offer direct market access to a network of liquidity providers, removing any conflict of interest. But the main advantage is reduced trading costs, with most ECN brokers charging a flat commission on top of raw spreads.

The ECN brokers below have been selected for their transparency, reputation, and low trading costs but are otherwise quite different. Whether you are looking for an ECN broker with high leverage, excellent education, commission-free accounts, or a specific trading platform, you are sure to find it here.

These are the best ECN brokers in Malaysia for 2024, according to our testing and our research.

1

Pepperstone

ECN Broker with the Tightest Spreads

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2

Axi

Best ECN broker on MT4

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3

IC Markets

Best ECN Broker for Beginners

Visit
4

HFM

Best ECN with STP Execution

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5

Admirals

Best ECN Broker for Education

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6

FP Markets

Best ECN Broker for Scalping

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7

Fusion Markets

Low-Cost ECN + 3 Copy Trading Platforms

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Best ECN Brokers 2024

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Broker
Broker Score
Official Site
Min. Deposit
Max. Leverage (Forex)
EUR/USD - Standard Account
Trading Cost - Standard Account
EUR/USD - Raw Spread
Trading Commission
Trading Desk
Total CFDs
Currency Pairs
Platforms
Compare
Pepperstone
4.61 /5
Read Review
Visit Site >
89%74- of retail CFD accounts lose money
USD 0200:11.00 pipsUSD 100.17 pipsFrom 7 USD / lot - Razor AccountNDD1275100MT4, MT5, cTrader, TradingView
Axitrader
4.44 /5
Read Review
Visit Site >
75.6% of retail CFD accounts lose money
USD 0500:11.00 pipsUSD 100.00 pips7 USD / lot - PRO accountECN/DMA18870MT4
IC Markets
4.56 /5
Read Review
Visit Site >
70.81% of retail CFD accounts lose money
USD 200500:10.10 pipsUSD 80.02 pips7 USD / lot - Raw Spread AccountECN/DMA174464MT4, MT5, cTrader, TradingView
HFM
4.53 /5
Read Review
Visit Site >
72.90% of retail CFD accounts lose money
USD 01000:11.00 pipsUSD 100.10 pips6 USD / lot - Zero AccountSTP123053MT4, MT5, HFM Trading App
Admiral Markets
4.28 /5
Read Review
Visit Site >
76% of retail CFD accounts lose money
USD 251000:10.80 pipsUSD 80.10 pips1.8 - 3 USD per lotSTP399682MT4, MT5, MT Supreme
FP Markets
4.40 /5
Read Review
Visit Site >
79% of retail CFD accounts lose money
AUD 100500:10.10 pipsUSD 70.10 pips6 USD / lot - RAW AccountsECN/DMA1016270MT4, MT5, cTrader, IRESS
Fusion Markets
4.33 /5
Read Review
Visit Site >
89% of retail CFD accounts lose money
USD 0500:10 pipsUSD 4.500 pips4.5 AUD / lot (EUR/USD)ECN/DMA25285MT4, MT5, cTrader
Vantage
4.35 /5
Read Review
Visit Site >
of retail CFD accounts lose money
USD 50500:10.00 pipsUSD 60.00 pips6 USD / lot - ECN AccountECN/DMA, STP90046MT4, MT5, ProTrader

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.


Pepperstone – ECN Broker with the Tightest Spreads

Broker Score
4.614.61 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage200:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

A long-established Australian ECN broker, Pepperstone offers MT4, MT5 and cTrader support, ASIC regulation and two simple accounts with ECN execution. The Standard Account is commission-free and the spreads on the EUR/USD starts at 1.00 pips. The Razor Account charges a commission of 7 AUD round turn but the average spread on the EUR/USD is 0.10 pips – about as close as traders can get to true market prices as possible. Most orders are executed in less than 50 milliseconds, which is ideal for scalpers and clients who run MT4’s expert advisors.

Pepperstone also offers a package of Smart Trader Tools for MT4, a suite of 28 expert advisors and indicators to help improve trade execution and management. In addition, all traders users get access to Autochartist – a powerful pattern recognition plugin that automatically identifies trading opportunities based on price trends.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • Limited market analysis
AlertAccepts Malaysian 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 200:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, CySEC, SCB, CMA, BaFin and the DFSA.

Axi – Best ECN broker on MT4

Broker Score
4.444.44 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Axi is an ASIC and FCA regulated ECN broker with MT4 support, a wide range of trading tools and simple account options. Axi’s pricing model connects to over 20 liquidity sources, so traders experience fewer slippages and requotes. Spreads on the Pro Account start at 0 pips (with a 7 USD commission).

The most valuable trading tool that Axi offers for the MT4 platform is the MT4 NexGen plugin. MT4 NexGen offers a sentiment indicator, a correlation trader, a more intuitive terminal window, and an automated trade journal. In addition, traders at Axi have access to AutoChartist, a powerful automated technical analysis tool, and PsyQuation, an AI diagnostic that tracks your trading style and coaches you into more profitable trades. VPS hosting is also available, along with all the trading algos you wish to install to your MT4.

Pros
  • Low minimum deposit
  • Tight spreads
  • Innovative trading tools
Cons
  • MT4 only
  • Limited range of assets
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 500:1. 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
4.564.56 / 5
🏦  Min. DepositUSD 200
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage500:1
💹  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 Malaysian Clients. Average spread EUR/USD 0.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. IC Markets is regulated by CySEC and ASIC.

HFM – Best ECN with STP Execution

Broker Score
4.534.53 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage1000:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

HotForex is a well-regulated broker with STP execution on all six different accounts on the MT4 platform. The minimum deposit on the Micro Account is low, at 5 USD and spreads start at 1.2 pips on the EUR/USD. For those that prefer ECN trading on MT4, the HotForex Zero Spread Account offers spreads down to 0 pips for a 200 USD minimum deposit. For beginners, HotForex offers unlimited demo versions of all its MT4 account types. 

HotForex supports MT4 via every method, including the MT4 MultiTerminal, which allows traders to manage multiple MT4 accounts from a single platform. MT4 is also available via web, desktop, and Android and iOS apps. Trading tools available include free Autochartist, VPS services and the HFCopy copy trading service. For MT4 traders who want fast STP execution, it is difficult to recommend another broker.

Pros
  • Low minimum deposit
  • Tight spreads
  • Well regulated
  • Good range of accounts
Cons
  • Limited base currencies
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.

Admirals – Best ECN Broker for Education

Broker Score
4.284.28 / 5
🏦  Min. DepositUSD 25
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Admirals Markets offer two ECN accounts on MT4 and MT5. The Zero.MT4 account has spreads from 0 pips with commission varying between 1.8 to 3.0 USD per lot. The cost of trading 1 lot of EUR/USD with the Zero.MT4 account is 5 USD round turn, which is at the lower end of what similar ECN brokers can offer. Admirals’ MetaTrader Supreme edition for both MT4 and MT5 offers improved trading widgets, charts, and indicators when compared to standard MetaTrader. 

Admirals has an excellent education suite, starting with the free Zero to Hero program where beginners can learn to trade in 20 days. The accompanying webinars Admirals publishes are detailed and helpful, and the overall onboarding experience is welcoming, responsible and genuinely educational. With intermediate and advanced trading education for experienced traders and access to Trading Central delivering trading insights, quality learning material is front and centre for all clients.

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
Cons
  • Expensive withdrawals
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.80 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by the FCA, ASIC, CySEC, and the JSC.

FP Markets – Best ECN Broker for Scalping

Broker Score
4.404.40 / 5
🏦  Min. DepositAUD 100
🛡️  Regulated By
💵  Trading Cost 
USD 7
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who FP Markets is for: Scalpers looking for raw spreads and fast execution on the MT4, MT5 and cTrader trading platforms

Why we like FP Markets: FP Markets supports the MT4 and MT5, as well as the newly added cTrader trading platforms with 60+ FX pairs, shares, metals, indices, commodities, and cryptocurrencies to trade. 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’ pricing is comparable with Pepperstone and other industry-leading ECN brokers. And with an Equinix server cluster, most trades are executed in under 40 milliseconds, much faster than other ECN brokers. This makes FP Markets an excellent broker for scalping and EA trading on the Metatrader trading platforms. The commission is also low at 6 USD per lot round turn, and the minimum deposit is only 100 AUD (or currency equivalent).

FP Markets’ drawbacks: FP Markets provides ECN pricing but is not a true ECN broker; it streams its pricing directly from its liquidity providers. It does have a trading desk to manage risk but follows a no-dealing-desk intervention model. Traders should also be aware that FP Markets charges fees on most withdrawal methods.

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 Malaysian Clients. Average spread EUR/USD 0.10 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5, and ctrader platforms supported. FP Markets is regulated by CySEC and ASIC.

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

Broker Score
4.334.33 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 4.50
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2017 in Australia, 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 Malaysian 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 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. 

Happy Trader

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. 

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 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
IC Markets
4.56 /5
Read Review
CySEC Regulated Brokers
ASIC Brokers
The Seychelles Financial Services Authority
Securities Commission of the Bahamas
USD 200
500:1
USD 8
1744
64
18
7 USD / lot - Raw Spread Account
Axitrader
4.44 /5
Read Review
FCA Regulated Forex Brokers
CySEC Regulated Brokers
ASIC Brokers
Financial Markets Authority of New Zealand
DFSA Regulated Forex Brokers
Financial Services Authority – St. Vincent & the Grenadines
USD 0
500:1
USD 10
188
70
11
7 USD / lot - PRO account
ThinkMarkets
4.43 /5
Read Review
Financial Services Conduct Authority
FCA Regulated Forex Brokers
ASIC Brokers
The Seychelles Financial Services Authority
CySEC Regulated Brokers
Financial Services Agency
USD 0
500:1
USD 11
4150
46
27
7 USD / lot - ThinkZero Account
FP Markets
4.40 /5
Read Review
ASIC Brokers
CySEC Regulated Brokers
Financial Services Conduct Authority
Capital Markets Authority
The Seychelles Financial Services Authority
AUD 100
500:1
USD 7
10162
70
11
6 USD / lot - RAW Accounts
FXTM
4.37 /5
Read Review
CySEC Regulated Brokers
FCA Regulated Forex Brokers
Financial Services Commission
USD 10
2000:1
USD 15
1803
62
0
From 4 USD / ECN Accounts
Vantage
4.35 /5
Read Review
FCA Regulated Forex Brokers
Financial Services Conduct Authority
ASIC Brokers
Cayman Islands Monetary Authority
Vanuatu
USD 50
500:1
USD 6
900
46
0
6 USD / lot - ECN Account
FBS
4.33 /5
Read Review
CySEC Regulated Brokers
ASIC Brokers
Financial Services Conduct Authority
International Financial Services Commission
USD 5
3000:1
USD 7
254
37
100
6 USD / lot - ECN Account
Fusion Markets
4.33 /5
Read Review
ASIC Brokers
Vanuatu
The Seychelles Financial Services Authority
USD 0
500:1
USD 4.50
252
85
14
4.5 AUD / lot (EUR/USD)
BlackBull Markets
4.28 /5
Read Review
Financial Markets Authority of New Zealand
The Seychelles Financial Services Authority
USD 0
500:1
USD 8
26115
70
10
6 USD
Valutrades
4.25 /5
Read Review
FCA Regulated Forex Brokers
The Seychelles Financial Services Authority
USD 5
500:1
USD 7
146
80
0
6 USD / Lot
Fondex
4.24 /5
Read Review
CySEC Regulated Brokers
Finansinspektionen
Bundesanstalt für Finanzdienstleistungsaufsicht
The Seychelles Financial Services Authority
USD 1
500:1
USD 7.80
1033
80
11
None
ACY Securities
4.08 /5
Read Review
ASIC Brokers
Vanuatu
USD 50
500:1
USD 10
2489
63
9
Fees Included in Spread
Infinox
4.03 /5
Read Review
Securities Commission of the Bahamas
FCA Regulated Forex Brokers
Financial Services Commission
Financial Services Conduct Authority
GBP 1
1000:1
USD 8
878
49
43
6 USD / lot - ECN Account
FXCC
3.88 /5
Read Review
CySEC Regulated Brokers
USD 0
500:1
USD 6
104
71
14
None
Errante
3.87 /5
Read Review
CySEC Regulated Brokers
The Seychelles Financial Services Authority
USD 50
500:1
USD 15
151
50
14
Fees Included in Spread
IronFX
3.64 /5
Read Review
CySEC Regulated Brokers
FCA Regulated Forex Brokers
ASIC Brokers
Financial Services Conduct Authority
USD 50
1000:1
USD 22
285
83
0
On select STP/ECN Accounts
NordFX
3.63 /5
Read Review
CySEC Regulated Brokers
Vanuatu
USD 10
1000:1
USD 20
79
33
15
0,007% / Trade - Zero Account
ICM Capital
3.61 /5
Read Review
FCA Regulated Forex Brokers
Financial Services Commission
Swiss Financial Market Supervisory Authority
Finansinspektionen
Financial Services Authority – St. Vincent & the Grenadines
USD 0
200:1
USD 13
164
48
7
7 USD / lot - Zero Account
Fibo Group
3.60 /5
Read Review
CySEC Regulated Brokers
Bundesanstalt für Finanzdienstleistungsaufsicht
Finansinspektionen
British Virgin Islands Financial Services Commission
Financial Services Commission
USD 0
1000:1
USD 6
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.

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 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.

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