ECN is a term which some brokers have stopped using to describe themselves. However ECN can be seen as a type of broker which fits certain charateristics, so this page looks at brokers which have these features, as traders are interested in this label, particularly those who want, low spreads and rapid order processing and use automated methods. ECN features can include no dealing intervention and rapid order processing, allowing a wide range of trading styles, especially those dependant on speed.
The ECN is the Electronic Communication Network linking brokers to the financial ecosystem, including liquidity providers and other brokers. This means that the broker can find a range of different values for a market and can source these from different places, including internally within the broker. This is intended to be distinct from a market maker broker which sets the value for the market.
The idea that an ECN broker sends a client order to a liquidity provider and then returns it via the ECN, is not necessarily the case (and may only be for larger orders). The ECN broker may match the order internally then hedge this order via the ECN, if they want to do this. The argument is that such a process can be faster for the client than finding an external provider to match the trade of the client. The ECN broker typically adds another charge, called the commission charge, to this value.
ECN brokers may use electronic infrastructure to help provide rapid order processing (i.e. to help arrive at fast average speeds) for the ECN. For example, some use Equinix data centers, which are buildings with interconnected servers. These servers can house financial providers in relatively close proximity via interconnected servers, thus the broker can put their servers in the data center and connect more directly with this ecosystem, using technology such as fibre optics and routing algorithms. In effect the ECN creates a marketplace, which the broker can use to help provide streaming prices for CFDs on the terminal of the trader (as the trader will be buying and selling CFDs with the provider, i.e. the 'broker').
Since market values are being sourced from multiple sources and a wider ecosystem, they may be very low, depending on liquidity, and this is another feature of ECN brokers, offering spreads which can be as low as 0 pips, for the most liquid Forex pairs. However usually the commission charge is added, thus offering Forex pairs of more than 0 pips. For example a commission charge of $3 per lot per side, would add 0.3 pips to the price of 1 lot per side (other charges may apply as well). Also, the raw spread of 0 is normally a low, thus it can range higher. ECN brokers may have low average spreads as well, however. This said, spreads can widen in volatile market conditions.
Some brokers offer different account types. These may include accounts described as ECN, and these will generally have the identified characteristics of low spreads, commission charges and rapid order processing. So this page will find 10 brokers which fit as much as possible these characteristics, with the caveat that some brokers do not describe themseves anymore as 'ECN brokers' and CFD 'brokers' are properly described as CFD providers.
1 Pepperstone
- Minimum deposit: $200
- Online trading platforms: MT4, MT5, cTrader, TradingView
Pepperstone does not describe itself as an ECN broker. It is included in this page, because it arguably fits those characteristics, though it does not use this label. Pepperstone also has widened its range of offerings to include a wider range of features. However it still does provide spreads from 0, plus a commission charge of $3.5 per lot per side (for MT4 and MT5) on its Razor account, uses non dealing desk intervention and aims to provide rapid order processing. Pepperstone says it can match trades internally and use multiple external liquidity providers.
2 IC Markets
- Minimum deposit: $200
- Online trading platforms: MT4, MT5, cTrader
IC Markets offers rapid order processing with no dealing desk intervention, and Forex spreads from 0, plus a commission charge of $3.5 per lot per side (for MT4 and MT5). IC Markets utilises Equinix data centers. IC Markets describes itself as following an ECN pricing model. This means that it streams prices from unrelated liquidity providers which can be offset from a number of sources including the broker, another client and liquidity providers, as it does not necessarily offset a trade via a liqudity provider. IC Markets offers MT4, MT5 and cTrader.
3 Dukascopy Bank
- Minimum deposit: $1000
- Online trading platforms: MT4, JForex
Dukascopy Bank uses the SWFX (Swiss Forex) Marketplace. This is an ECN with a range of providers. Dukascopy Bank is the counterparty to all trades and then may hedge these trades via the SWFX either internally or externally. Traders can place trades directly into the SWFX Marketplace.
Dukascopy Bank offers MT4 and JForex, both platforms allowing automated trading. JForex provides a wide range of technical indicators inbuilt into the platform, for those who want to use technical indicators. Forex spreads are from 0.1 pips, plus a commission charge which varies depending on net deposits, equity and trade volume.
4 FXTM
- Minimum deposit: $10
- ECN Advantage account: $500
- Online trading platforms: MT4, MT5
FXTM offers one account it describes as ECN, this is the ECN Advantage Account. As might be expected, it offers Forex spreads from 0, plus a commission charge (dependant on equity and trading volume) from $2 per lot per side (down to $0.42 per lot per side). The minimum deposit for this account is $500. In some regions the Advantage account account is MT4 only, in others it offers MT4 and MT5.
There is another Advantage account, called the Advantage Plus account. This has similar features to the Advantage account, except is does not charge commissions and has higher spreads, and is not described as an ECN account. Scalping is allowed on the Advantage accounts. FXTM also provides a Micro account for MT4, with low minimum trade sizes and a minimum deposit of $10 (or $50 in the EEA).
5 Titan FX
- Minimum deposit: $200
- Online trading platforms: MT4, MT5
Titan FX's has its ECN in Equinix's NY4 data center, allowing low latency connection to major liquidity providers. Titan FX professes the aim of moving towards zero spreads and zero latency, aggregates liqidity from pools worldwide and uses algorithms to find the lowest spreads.
6 Vantage
- Minimum deposit: $50
- Online trading platform: MT4, MT5
Vantage provides two accounts described as ECN, Raw ECN and Pro ECN, both of which offer Forex spreads from 0 plus commission ($3 per lot per side for the Raw and $1.5 per lot per side for the Pro account). The Raw ECN has a minimum deposit of $50, while the Pro ECN requires a minimum deposit of $10,000. Vantage utilises Equinix data centers to offer low latency order processing.
7 BlackBull
- Minimum deposit: $0
- Online trading platforms: MT4, MT5, TradingView, Stocks Trading Platform
BlackBull offers three accounts described as ECN, these are its ECN Standard, its ECN Prime and its ECN Institutional accounts. The ECN Standard account has no minimum deposit, the ECN Prime account has a $2000 minimum deposit and the ECN Institutional account requires a $20,000 minimum deposit. Spreads from 0.8 without a commission charge are available on the ECN Standard account and from 0.1 plus commission on the ECN Prime account and 0 plus commission on the ECN Institutional account.
8 FXCC
- Minimum deposit: $0
- Online trading platform: MT4
FXCC offers MT4 and provides its ECN XL account, which offers Forex spreads from 0, without a commission charge. There is also no minimum deposit for the ECN XL account (in some regions). FXCC describes its ECN model as ECN/STP. FXCC uses a price aggregator to find the best available bid/ask prices and provides these to clients.
9 RoboForex
- Minimum deposit: $10
- Online trading platform: MT4, MT5, cTrader, R StocksTrader
Belize regulated RoboForex offers one account it describes as ECN. This has a minimum deposit of $10 and provides MT4, MT5, cTrader and R StocksTrader. It offers Forex spreads from 0, plus a commission charge and aims to provide rapid roder processing. As well as fiat currencies (USD, EUR and CNY), this account is also offered denominated in Gold.
10 RoboMarkets
- Minimum deposit: $100
- Online trading platform: MT4, MT5, R StocksTrader
RoboMarkets also offers the ECN account available at RoboForex, but RoboMarkets is regulated in the EU and this account has a minimum deposit of $100.
Although traders see ECN as a feature that they may be interested in, this label is clouded by the fact that some prominent brokers have moved away from using it. However what ECN is can be captured to some extent by a series of features, and focusing on these can be perhaps worthwhile, as they include rapid order processing, low spreads and platforms supporting trading styles congruent with these features, such as automated trading and scalping. There are other types of Forex brokers and the trader may wish to try different types of brokers.
