Why Trade Using an ECN?

An ECN is an electronic communications network that links together different market participants, including banks, brokers, and other financial institutions.
ECNs allow these different market participants to trade with each other anonymously, without the need for a middleman. This type of trading is often referred to as “direct market access” or “DMA.”
ECNs charge a small fee for their services, which is typically passed on to the trader in the form of a commission.

Keynnote
Trading with ECN makes things clearer. Since many forex traders can access the network, it is often said that ECN forex brokers offer much better trading conditions. Using an ECN broker keeps prices from being messed with and builds a little more trust than using a traditional broker.
ECNs let brokerages and investors from different parts of the world trade without a third party. This gives investors privacy. ECNs allow trading to happen outside of normal trading hours, so investors can react to or plan for news that happens after trading hours.

8 Benefits of ECN Trading

There are several benefits to trading through an ECN, including:

Anonymity: Because ECNs link together different market participants, traders can remain anonymous when trading through an ECN. This anonymity can help to level the playing field between different market participants, as well as protect the identity of traders.
ECN trading can be done without anyone knowing who did it. This lets traders take advantage of the neutral pricing, which makes sure that thd for both live trading and testing trading models using historical data.

Price: Spreads are not changed by ECN brokers. When you trade through an ECN broker, you get the best prices that are available at that moment.

ECNs also offer other advantages, such as the ability to trade 24 hours a day and the ability to trade in multiple markets simultaneously.
ECNs can also provide access to global markets, which can be beneficial for traders who want to trade in foreign markets.
Overall, ECNs can provide many benefits to traders, which can help them to be more successful in the market.

The Advantages of ECN Trading

In addition to the benefits discussed above, there are also several advantages to trading through an ECN, including:

Increased liquidity – ECNs link together different market participants, which can lead to increased liquidity. This increased liquidity can in turn lead to better prices for traders.

Lower spreads – ECNs typically have lower spreads than traditional brokers. This can lead to savings for traders, especially those who trade frequently.

No dealing desk – ECNs do not have a dealing desk, which means that there is no conflict of interest between the ECN and its clients. This can lead to improved order execution and a more transparent trading experience.

Another advantage of ECN trading is that it can provide access to global markets. This can be beneficial for traders who want to trade in multiple markets or who want to take advantage of opportunities that may arise in different parts of the world.

The Disadvantages of ECN Trading

There are also several disadvantages to trading through an ECN, including:

Complexity – ECNs can be complex, which can make them difficult to use for some traders. This complexity can also lead to increased costs for some traders.

Require high minimum deposits – ECNs often require high minimum deposits, which can be a barrier to entry for some traders. Another disadvantage of ECN trading is that it can be quite risky. This is because you are essentially trading against other market participants, and you may not have the same information or access to the same resources as them. This can make it difficult to make informed trading decisions, and you may end up losing money if you don’t know what you’re doing.

Recommended ECN Brokers

Choosing the correct broker for trading is critical to your trading journey, there are many factors you should take into consideration specifically for ECN trading before settling with the broker you may be trading with or when switching to a new choice broker which is best suited to your needs and factors which are important to you personally.

Broker

Regulators

Leverage

Spreads

Trading Acc.

Instruments

Connect

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC,FCA, DFSA, FSC

Up to 1:500

From 0 - 0.4 pips

Broker Type:
STP | ECN
 3 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

CySEC, FSC BVI, FSC

Up to 1:1000

From 0 - 7 pips

Broker Type:
MM | Binary
 6 Accounts

Forex, Indices,
Commodities,
Metals, Energies, Shares, Crypto

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IFSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
ETFs, Shares, Crypto

ASIC, CySEC

Up to 1:500*

From 0.0 pips

Broker Type:
STP | ECN | DMA 2 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, ETFs Crypto, Bonds

The Risks of ECN Trading

There are also several risks associated with trading through an ECN, including:

Market risk – ECNs are subject to the same market risks as any other type of trading. This includes the risk of sudden price changes or risk of a market crash.

Counterparty risk – When trading through an ECN, there is a risk that the counterparty will default on their obligations. This risk can be mitigated by choosing a reputable ECN, and by carefully monitoring your positions.

Technology risk – ECNs are reliant on technology, which means that they are subject to the same risks as any other type of technology-based system. This includes the risk of system failures or the risk of cyber attacks.

In addition to the risks listed above, there are also general risks associated with trading in the financial markets. These risks include the risk of loss, the risk of fraud, and the risk of market manipulation. ECN trading is not suitable for everyone, and you should carefully consider all of the risks before deciding to trade through an ECN.

The Costs of ECN Trading

ECNs typically charge a commission for their services, which is typically passed on to the trader. The commission is typically a small percentage of the trade value, but can vary depending on the ECN and the type of trade being executed. There may also be other costs associated with trading through an ECN, such as platform fees or data fees. These costs should be carefully considered before deciding to trade through an ECN.

It is important to remember that ECNs are just one type of trading platform available to traders. There are also broker-dealers, which typically charge a commission or mark-up on trades. Each type of platform has its own advantages and disadvantages, so it is important to choose the one that is best suited to your trading style and needs.

If you are considering trading through an ECN, be sure to do your research and compare different platforms to find the one that is right for you.

3 Types of Brokers

1. (MM) Market makers, also known as dealing desk (DD) brokers.

2 (DMA) Direct Market Access Brokers also called (NDD) non-dealing desk brokers or (STP) Straight Through Processing brokers.

3. ECN Electronic Communication Network brokers

How to Choose an ECN Broker

It can be very hard to find a real ECN broker. Even more so if you don’t know where to start. Here are some tips for finding the best ECN broker for your needs.

Reliable Updates: Your ECN broker should be able to tell you how your trading account is doing on a regular basis. A real ECN broker will always keep you up to date on how things are going, explain anything you don’t understand, and help you with any problems you might run into.

Order limits are how many orders you can send to your broker, how big each order can be, how big your total positions are, and so on. A real ECN broker won’t care how much you put in because the more you put in, the more commission they get. If your chosen broker tries to steer you toward certain deals, they may only be interested in it for their own gain, which means they are not a real ECN broker.

Legal Identification As a trader, you have the right to ask your chosen ECN broker for legal identification to find out if their services are legal in the country where you live. If you don’t do legal checks, you could lose your hard-earned money.

Now you can Start Trading with an ECN Broker

When compared to other types of brokers, an ECN broker can be very helpful for anyone who wants to start trading foreign exchange.
If you are new to the foreign exchange market, you should do some research to find an ECN broker that offers services that meet your needs and are backed by a good reputation.
Even though there are a lot of brokers in the business, ECN brokers may be the best choice for your overall trading needs because of the benefits they offer.

Choosing the correct broker for trading is critical to your trading journey, there are many factors you should take into consideration specifically for ECN trading before settling with the broker you may be trading with or when switching to a new choice broker which is best suited to your needs and factors which are important to you personally.
These are the brokers we have reviewed:

ECN Execution Recommended Brokers

Exness

Since 2008

Offices:

UK, Cyprus, Seychelles

Exness

Minimum Deposit: Standard; Cent; Plus: $1 | Raw Spread, Zero, Pro:$200
Account currency: USD
Leverage: From 1:100 up to 1:2000
Accounts: Standard, Standard Cent, Standard Plus, Raw Spread, Zero, Pro
Instruments Offered: Forex, Indices, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, WebTrader, Mobile, Free VPS hosting
Regulation: FCA, CySEC, FSA, CBCS, FSC,  FSCA
Spreads: Standard; Cent: from 0.3 pips,
Standard Plus: from 1 pip
Pro: from 0.1 pips,
Raw spread; Zero: from 0 pips,
Visit Broker Broker Review

AXI

Since: 2007

Offices:

UK, Australia, UAE, Saint Vincent & the Grenadines

AXI

Minimum Deposit: $1
Account currency: AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, SGD, USD
Leverage: Up to 1:500
Accounts: Standard, Pro, Elite
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform:  MT4, PsyQuation with Axi,  WebTrader, VPS hosting
Regulation: ASIC,FCA, DFSA, FSC
Spreads Standard: from 0.4 pip, Pro: from 0 pip
Visit Broker Broker Review

InstaForex

Since: 2007

Offices:

Cyprus, St.Vincent & the Grenadines, British Virgin Isles

InstaForex

Minimum Deposit: From $1
Account currency: EUR, USD
Leverage: From 1:1 up to 1:1000
Accounts: Demo, Insta.Standard, Insta.Eurica, Cent.Standard, Cent.Eurica, PAMM
Instruments Offered:
Forex, Indices, Futures, Options, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: МТ4, МТ5, InstaTrader, WebTrader, Multiterminal, Mobile Trading, VPS hosting
Regulation: CySEC, FSC BVI, FSC
Spreads: 0 pips: Insta.Eurica and Cent.Eurica;
3–7 pips: Insta.Standard and Cent.Standard
Visit Broker Broker Review

EightCap

Since: 2009

Offices:

Australia, Vanuatu

EIGHTCAP

Minimum Deposit: $100
Account currency: AUD, USD, GBP, NZD, SGD, EUR
Leverage: 1:30 for Australian clients
1:500 for Non-AU clients
Accounts: Standard Account, Raw Account
Instruments Offered:
Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, Mobile, VPS hosting
Regulation: ASIC, VFSC
Spreads: From 0.0 pips
Visit Broker Broker Review

IC Markets

Since: 2007

Offices:

Australia, Cyprus, Seychelles

IC MARKETS

Minimum Deposit: 200 US dollars
Account currency: USD, AUD, GBP, CHF, JPY, NZD, SGD, CAD, HKD, BTC
Leverage: From 1:1 to 1:500
Accounts: Demo, Raw Spread, cTrader, Standard, Islamic, PAMM
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Bonds Cryptocurrencies
Trading Platform: cTrader, MT4, MT5, WebTrader, VPS hosting
Regulation: AFSL, ASIC, CySEC, FSA
Spreads From 0
Visit Broker Broker Review

FBS

Since: 2009

Offices:

Cyprus, Belize

Minimum Deposit: $1 , €10
Account currency: Euro
Leverage: 1:3000 
Accounts: Standard Account, Cent Account, Demo Standard Account, Demo Cent
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, Multiterminal, WebTrader, FBS Trader, VPS hosting
Regulation: CySEC, FSC, FSCA, ASIC
Spreads: From 1 pip
Visit Broker Broker Review