Best ECN Brokers

Brokers we recommend

Comparison table

We rate brokers across 5 categories and 18 criteria, following a standardised methodology. Here are our overall and category-specific ratings:

• Score / 5
• Markets
• Platforms
• Funding
• Regulators

ECN trading benefits

Unlike traditional Forex brokers, ECN brokers allow you to trade directly on the Forex interbank market. Experienced traders prefer to trade Forex and CFDs through ECN brokers for a number of reasons, that include:

• Tight spreads: trade directly on the Forex interbank market with Tier-1 liquidity providers. Competition between market makers and fractional pricing keep spreads as tight as possible. In turn, this makes it easier to profit for small price movements.
• Execute trades instantly: an ECN broker has no dealing desk and no re-quotes. Trade on live, best executable prices with immediate confirmations. This facilitates trading during economic releases and times of unusual market volatility.
• Depth of market: see liquidity at every price point in addition to bid offer spreads. Understand where liquidity lies and use these insights to predict short term changes in prices. Depth of market information supports scalping strategies.
• Trade anonymously: ECN trading is completely anonymous. This helps ensure that the prices you're see are free from bias and reflect market conditions.
• No conflicts of interest: ECN brokers act as intermediaries rather than market markers. They earn money through commissions on trades; the more you trade, they more they stand to profit. This helps align their interests with yours.

How to compare ECN brokers

Here are three criteria to keep top of mind when searching for the best ECN broker.

Commissions

Most ECN brokers earn money through a commission on trades rather than a mark-up on spreads. This is why they typically quote spreads as lows as 0 pips, also known as "raw spreads". FP Markets is an exception to the rule in that it allows you to choose between a commission-based and a commission-free account.

Their commission is usually expressed in US$ per lot or million US$ traded, and typically applies to each side of a trade. In other words, a $3 commission per lot per side will first apply when you open a position, and apply once again when you close your position.

Liquidity providers

Trading fees aren't the only criteria you'll want to bear in when comparing ECN brokers. You'll also want to check how many liquidity providers they work with. The more liquidity providers compete for your trades, the deeper the market and the tighter the bid/ask spreads. This also provides greater certainty of execution, that you'll come to appreciate when markets are volatile.

However, that information can be hard to come by, as brokers view it as commercially sensitive. Most brokers in our panel work with over 10 such liquidity providers. This is also the case with FXCC, a broker established in 2010 as an ECN-only broker.

Trading platforms

Last but not least, you'll also want to consider trading platforms when comparing brokers. In fact, this could be a major consideration if you already have a library of automated trading scripts. All brokers in our panel support the MetaTrader platform, in its versions 4 or 5. If you're into cTrader, an ECN trading platform with advanced charting and technical analysis capabilities, you should consider opening an account with FPMarkets.com instead.

Is your broker a true ECN broker?

You may have noticed that some brokers use the word 'ECN' liberally for marketing purposes, even though they may not provide a true ECN service. Here's how to tell if your provider is a genuine ECN broker.

Depth of market information

Does your broker provide depth of market (DOM) information? Depth of market shows you the liquidity available for every bid and offer. DOM should be available for every instrument and change dynamically as orders are filled and new orders come to market. It usually appears in a small monitor directly in your trading platform's interface.

Order matching

Traders in an Electronic Communication Network (ECN) can enter competing bids and offers into the platform either inside or outside the spread, and hit one another's orders. You'll know your broker is a true ECN broker if you're able to open a position with a liquidity provider and close it with another, or execute a trade against the bid or offer of another trader through your broker's depth of market monitor.

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