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ECN Forex brokers are popular because they offer direct market access, reduce trading costs and have less slippage. By providing traders with direct market access, they avoid any conflict of interest inherent with market maker brokers who can interfere with trades. Some brokers will offer an ECN account alongside other STP or market maker account choices.
Best ECN Broker
4.07
Most retail CFD accounts lose money. Your capital is at risk.FP Markets is a leading ASIC-regulated STP broker, providing tight spreads on their RAW account, coupled with the choice of MT4, MT5 and IRESS trading platforms. A standard commission-free account is available for entry-level traders looking for a lower minimum deposit.
Relative to other Forex brokers, FP Markets has made a serious investment in new traders with award-winning customer service and a lightweight education section, which includes daily email updates of the latest financial news impacting the currency markets.
4.51 Most retail CFD accounts lose money. Your capital is at risk.Pepperstone is a renowned Australian Forex broker, fully-regulated by ASIC and popular worldwide for its fast ECN execution of trades, tight spreads and a wide choice of trading platforms. Award-winning 24-hour support anchors their customer support, where a personalised service for individual customers is available through numerous channels.
Founded in 2010, Pepperstone won the fastest-growing company award (2014) in Australia, from BRW Magazine and emerged as the 2014 Winner of the Governor of Victoria Export Awards cementing their reputation as a strong newcomer with well-appreciated trading conditions.
3.98
Most retail CFD accounts lose money. Your capital is at risk.ThinkMarkets is a very well-regulated ASIC-regulated broker and headquartered in Melbourne and London since 2010. It offers support for MT4, MT5 and its own ThinkTrader platform on two account types: One with a very low minimum deposit and the other a commission-based ECN account for more experienced traders.
Education is well-structured and useful for beginners, though market analysis is mainly left to in-platform third parties. Customer support is excellent and provided locally and execution times are world-class, perfect for automated trading.
4.18 Most retail CFD accounts lose money. Your capital is at risk.Founded in 2001, Admiral Markets offers reliability, market leadership and simple modern trading. A global presence, a large Australian and international client base, flexible trading accounts, competitive trading conditions, and peerless educational material have attracted both beginner and experienced traders to the brand.
4.13 Most retail CFD accounts lose money. Your capital is at risk.GO Markets was founded in 2006 and was the first Australian MetaTrader broker. Though it only offers two account options, one with a dealing desk and wider spreads and the other an ECN with tight spreads and commission, both are competitive. Though much of the education section is paywalled for customers only, the content is excellent GO Markets offer full support for MT4 and MT5.
GO Markets really shines with its suite of trading tools including a free VPS service, Autochartist and Trading Central. A technological innovator, GO Markets works hard to keep low-latency trading, reliable customer service and stable platforms at the core of their offering.
4.19 Most retail CFD accounts lose money. Your capital is at risk.IronFX is a global broker with a wide range of account types, a great value micro account and over 80 tradeable currency pairs.
IronFX has regulation from ASIC and all the other major authorities and has recently introduced market execution accounts with ultra-low spreads.
For beginners who want to learn to trade on either the MT4 or MT5 platform, and experienced traders looking for strong international regulation, IronFX is an excellent choice in a broker.
4.43 Most retail CFD accounts lose money. Your capital is at risk.Founded in 2008 in Sydney, AxiTrader is an ASIC and FCA regulated ECN broker for serious traders. While trading platform choice is limited to MT4, Axitrader’s platform setup and support have received multiple awards including Best MT4 Broker 2018 (Compare Forex Brokers Australia) and Best MT4 Provider 2018 (UK Forex Awards).
Neither account at AxiTrader requires a minimum deposit, spreads are tight and all clients receive AutoChartist for free; as an ECN broker all trades are posted directly to market and educational and analytical support is good for beginners.
4.26 Most retail CFD accounts lose money. Your capital is at risk.IC Markets presents itself as the best and largest true ECN broker. ASIC regulated and with support for MT4, MT5 and cTrader, IC Markets is highly recommended to both new and experienced traders looking for faster execution and tighter spreads.
Beginner traders will find the IC Markets account structure uncomplicated and the company understands customer retention involves a combination of tighter spreads, cutting edge technology, fast trade execution and top quality customer service.
Headquartered in downtown Sydney, IC Markets represents the best of highly-reputable and competitive Australian brokers.
3.94 Most retail CFD accounts lose money. Your capital is at risk.Capital Index was founded in 2014 by industry veterans to meet the needs of serious traders. It quickly started winning awards, including STP/ECN broker of the year and has grown its client base substantially over the last six years.
Regulated by the FCA and with good, simple trading conditions across three account types, Capital Index is an ideal brokerage for experienced traders looking for a simple approach and MT4 support.
An ECN broker offers traders direct access to the Forex market using a network of liquidity providers to play counterparty to their clients’ trades. ECN brokers often have numerous liquidity providers, meaning that extremely competitive pricing can be found.
As all trades that are put through an ECN broker are posted directly to market, spreads are generally very tight – often down to 0 pips at times of high volatility. For this reason, ECN brokers will also charge a commission, this is their fee for playing matchmaker and finding a counterparty to your trade.
One common issue with ECN brokers is slippage and requotes. Because ECN brokers rely on external liquidity to match your trade, trades are not always posted instantly. This is usually an issue at times of high volatility, usually after a large event or data release. This also means that the market can move past your stop-loss orders, and your losses can far exceed what you expect.
The last thing to be aware of with ECN brokers is that they generally require a larger minimum deposit.
In contrast to ECN brokers, a market maker Forex broker always plays counterparty to your trade and always acts as the market with all 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 which 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.
But, regardless, a market maker broker is not a desirable choice for an experienced Forex trader. Even if they are honest, you will be limited to trading with one counterparty who is always trading against you and never on the open market with dynamic spreads.
That said, if you do want instant execution of your trades and you don’t want to pay a commission, a trusted market maker is not a terrible idea.
Another acronym you will often see in combination with ECN is STP (as in ECN/STP). STP 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 return us back to the problem of conflict of interest.
In most cases choosing a hybrid broker is the best way to go, as they will give you the most options.
ECN brokers do not have the conflict of interest you find at market makers and spreads are much tighter, but there are slippage-related trading risks and you will always pay commission on your trades. There is also the matter of the higher minimum deposit.
Are ECN brokers better than market maker? I don’t think that’s correct. All the brokers we work with are trusted and well-regulated and I believe the answer to this question is always down to personal preference. My own belief is that ECN brokers are better for more experienced traders, who are confident enough in their own skills to risk more capital and are happy to pay commission, and market maker brokers are better for beginners who don’t want to risk too much when they are still learning.
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: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.
Traders should not deposit any money that is not disposable. 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 from the FCA or from ASIC)
Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.
With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal.
In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.
All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers.
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