AuthorBy Jeffrey CammackAuthor InformationUpdated: December 8, 2020

The Best ECN Forex brokers are popular because they offer direct market access, reduce trading costs, and have tight spreads.

By providing traders with direct market access, ECN brokers avoid conflict of interest.

ECN trading accounts will usually charge a commission and have a higher minimum deposit than a standard account. Some brokers will offer ECN accounts alongside standard accounts.

These are the best ECN Forex brokers in 2021

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Best ECN Forex Brokers in Australia

Last updated on 8 Dec 2020
Updated 8 Dec 2020
by Editorial Director Jeffrey Cammackby Jeffrey Cammack
Jeffrey Cammack
All Brokers Regulated
All Brokers Regulated
by Trusted Authoritiesby Trusted Authorities
Trusted
1
FP Markets
Min. Deposit
AUD 100
4.174.17
Min. Spread
0 pips
Fx Pairs
60+
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 7
Overall Rating
11110.54.17/ 5
AlertAccepts Australian 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 & IRESS platforms supported. FP Markets is regulated by CySEC and ASIC.
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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.

Pros
  • Well regulated
  • Tight spreads
  • Good range of accounts
  • Great customer support
Cons
  • Expensive withdrawals
Read More About FP Markets
2
Black Bull Markets
Min. Deposit
USD 200
3.423.42
Min. Spread
0.20 pips
Fx Pairs
31
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 8
Overall Rating
1110.503.42/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 0.80 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. Blackbull Markets is regulated by the FMA & the FSA-Seychelles.
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Founded in New Zealand in 2014, BlackBull Markets is an ECN-only broker providing direct market access on the MT4 platform. Average spreads are unpublished, though start at 0.1 pips on the commission-based account. The commission-based accounts have high minimum deposits and educational material and market analysis are weak compared to similar brokers. BlackBull are well regulated by the New Zealand FMA and professional traders will be interested in the free VPS and FIX API service.

Pros
  • Tight spreads
  • Good for beginners
  • Wide range of assets
Cons
  • Expensive withdrawals
  • Limited market analysis
Read More About Black Bull Markets
3
Pepperstone
Min. Deposit
AUD 100
4.514.51
Min. Spread
0 pips
Fx Pairs
80+
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 7.90
Overall Rating
11110.54.51/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 0.09 pips with 7 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 300:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and the DFSA.
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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.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • High minimum deposit
  • Limited market analysis
Read More About Pepperstone
4
ThinkMarkets
Min. Deposit
USD 5
3.983.98
Min. Spread
0 pips
Fx Pairs
36
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 12
Overall Rating
1110.503.98/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. ThinkMarkets is regulated by FSCA, FCA, and ASIC.
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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.

Pros
  • Low minimum deposit
  • Well regulated
  • Great platform choice
Cons
  • Limited market analysis
  • Non-transparent spreads
Read More About ThinkMarkets
5
Admiral Markets
Min. Deposit
AUD 100
4.184.18
Min. Spread
0.10 pips
Fx Pairs
40+
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 7
Overall Rating
11110.54.18/ 5
AlertAccepts Australian 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 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by ASIC, CySEC, and the FCA.
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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.

Admiral Markets offers their own custom version of the MetaTrader trading platforms, the MetaTrader Supreme Edition, compatible with both MT4 and MT5. Additionally, most Admiral Markets accounts have free access to Trading Central – providing independent market insight and technical analysis – and the company offers one of the best cryptocurrency offerings on the market by a Forex broker.

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
Cons
  • Expensive withdrawals
Read More About Admiral Markets
6
IronFX
Min. Deposit
USD 100
4.194.19
Min. Spread
0 pips
Fx Pairs
85
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 11
Overall Rating
11110.54.19/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 1.10 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. Only MT4 platform supported. IronFX is regulated by CySEC, FCA, ASIC, and the FSCA.
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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.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
Cons
  • Expensive withdrawals
Read More About IronFX
7
Axitrader
Min. Deposit
USD 5
4.434.43
Min. Spread
0 pips
Fx Pairs
80+
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 12
Overall Rating
11110.54.43/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 400:1. Islamic account available. MT4 & MT5 platforms supported. Axi Group is regulated by the FCA, ASIC and the DFSA
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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.

Pros
  • Low minimum deposit
  • Wide range of assets
  • Well regulated
  • Tight spreads
Cons
  • Poor customer service
  • Limited demo account
Read More About Axitrader
8
IC Markets
Min. Deposit
AUD 200
4.264.26
Min. Spread
0.10 pips
Fx Pairs
60
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 7
Overall Rating
11110.54.26/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 0 pips with 7 USD commission round turn on the 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.
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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.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Great platform choice
Cons
  • High minimum deposit
  • Limited market analysis
Read More About IC Markets
9
Go Markets
Min. Deposit
AUD 200
4.134.13
Min. Spread
0.20 pips
Fx Pairs
50+
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 12
Overall Rating
11110.54.13/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. Go Markets is regulated by ASIC.
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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.

Pros
  • Fast and free withdrawals
  • Wide range of assets
  • Excellent market analysis
  • Innovative trading tools
Cons
  • High minimum deposit
  • No swap-free account option
Read More About Go Markets
10
Capital Index
Min. Deposit
GBP 100
3.943.94
Min. Spread
0 pips
Fx Pairs
68
EUR/USD Trading Cost per lotEUR/USD Trading Cost per lot Information
USD 14
Overall Rating
1110.503.94/ 5
AlertAccepts Australian Clients. Average spread EUR/USD 1.40 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 platform supported. Capital Index is regulated by the FCA.
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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.

Pros
  • Tight spreads
  • Fast and free withdrawals
  • Wide range of assets
Cons
  • Limited platform choice
  • Limited education
  • No swap-free account option
Read More About Capital Index

What is an ECN Broker?

ECN Network

An ECN broker connects traders to a network of liquidity providers, unlike a Market Maker broker which takes trades on to its own books.

ECN stands for Electronic Communication Network. An ECN broker 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).

ECN stands for Electronic Communication Network

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.

Because the liquidity providers in this network are competing for your trade, ECN brokers have very tight spreads – often down to 0 pips at times of high volatility.

ECN Brokers have very tight spreads

Traditional brokers (Market Makers) have wider spreads because they charge a fee in the spread. But ECN brokers do not make any money from the spread. Instead, they will charge a commission, this is their fee for playing matchmaker and finding a counterparty to your trade.

ECN brokers charge a commission per trade

Some traders prefer to trade with ECN brokers because they have no conflict of interest. Most market maker brokers will trade against their clients, which means that they make money when their traders lose.

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.

Happy Trader

ECN brokers make more money when traders profit

AND

Market Maker brokers make more money when traders lose

One common issue with ECN brokers is 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 Brokers have a higher risk of slippage and requotes

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.

What is the difference between an ECN Broker and a Market Maker Broker?

When you place a trade with an ECN broker, the counterparty 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 always act as counterparty to your trade

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, Market Maker brokers are not a common choice for experienced Forex traders. Traders are 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 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 an always 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, 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 maker? 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 South Africa 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: 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 Methodology

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

References

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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