6 Best ECN Forex Brokers in 2024
Updated August 15, 2024
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If you are a forex trader who wants to squeeze the most profit you can out of every trade, you should be looking at ways to reduce the costs associated with making the trade.
One way you can do that is to look at how your broker makes trades and what they charge you to act as the gateway to the forex market.
In this article, we will look at what an ECN broker is, how using one for your forex trading might be something you should consider and what the possible downsides of choosing an ECN broker are.
We’ll then examine seven of the best ECN Forex brokers available to traders, with some useful information to help you choose which would be best for you.
What Is an ECN Forex Broker?
Forex (foreign exchange) is the process of changing one currency to another. This can happen when you travel to another country, and also for commerce reasons and popularly for traders, too.
Forex traders use the FX market to exchange national currencies, and the market is open 24 hours a day, five and a half days a week across every time zone.
It’s no surprise that the forex market tends to be the both the largest and most liquid asset markets, and a strong choice for both experienced and beginner traders to build portfolios for profit.
According to the Bank for International Settlements, the daily global volume of forex trading reached $7.5 trillion in 2022.
To get involved in forex trading, you need a broker. The broker acts as your gateway to the market, allowing you access to buy and sell currency pairs.
Some brokers offer extra services, such as research tools and education as well as other financial instruments for you to invest in.
In terms of trading, ECN refers to Electronic Communications Networks, and refers to the way that a broker gives traders access to the markets.
ECN brokers simple groups price quotations on currencies from several different markets, which usually means they can offer traders tighter bid/ask spreads than a non-ECN broker.
The main difference between an ECN broker and a non-ECN broker is that ECN brokers provide direct access to prices from multiple market participants, offering better spreads for traders.
Unlike non-ECN brokers, who curate their own platform prices and make money on spreads, ECN brokers charge a commission, usually per lot.
List of ECN Brokers
Broker
| Min Deposit $0 | Commission $3.50 | Spread from 0.1pip | Best For Customer service | ||
Broker Exness | Min Deposit $10 | Commission $3.50 | Spread From 0.1 pip | Best For Experienced traders who don’t need extra knowledge. | ||
Broker FP Markets | Min Deposit $50 | Commission $3.00 | Spread From 0.1pip | Best For Experienced traders who don’t rely on research tools. | ||
Broker Fusion Markets | Min Deposit $0 | Commission $2.25 | Spread From 0.0 pips | Best For Traders focused on forex only. | ||
Broker IC Markets | Min Deposit $200 | Commission $3.50 | Spread From 0.0 pips | Best For Data driven forex traders. | ||
Broker FXTM | Min Deposit $10 | Commission Varies | Spread From 0.2 pips | Best For Traders who want the best rates on commission. |
Here’s a description of some of the top ECN Forex brokers:
1. Pepperstone
Pros
- Fast account opening
- Great customer service
Cons
- Uses a basic trading platform
- Limited portfolio
- Withdrawal fee for international bank wires
Pepperstone is one of the most well-regulated brokers on this list. While they might not offer as many trading instruments as other ECN brokers, their relative safety, thanks to ASIC, FCA, and BaFIN regulations, will make most traders feel safer.
Pepperstone offers a pretty standard $3.50 commission per lot per trade. Still, with a $0 minimum deposit, they might be more suited to a trader who isn’t necessarily looking for big investments to start with.
You can open a Pepperstone account quickly online, and the whole process, including deposits and withdrawals, is fast and simple.
Pepperstone's main drawback is its exclusive focus on forex and CFDs, with trades executed through the somewhat clunky and outdated MetaTrader platform, in contrast to more modern proprietary platforms elsewhere.
Still, with 100 currency pairs and multiple CFD options, you can still build a diverse portfolio and take advantage of fast and accurate pricing with an ECN account at Pepperstone.
2. Exness
Pros
- Proprietary platform
- Excellent research
Cons
- No education
- Customer support is basic
Exness offers traders many more choices when it comes to financial instruments. Alongside 97 currency pairs, you can also trade commodities, cryptocurrency and indices.
Founded in Cyprus in 2008, Exness is regulated by the FCA. Its ECN account does not include any deposits, withdrawals or account management charges, and there are no inactivity fees.
The minimum deposit is only $10, and the commission is a standard $3.50 per lot per trade, so it is in line with many other providers.
Exness does provide access to MetaTrader, but their proprietary Exness Trading Terminal and matching Exness Trade smartphone app are well-designed and intuitive to use and much better in terms of design.
You can access research from FXStreet and Trading Central, and they provide market and economic news and trading signals to help you make the most of each trade.
Exness is not a broker that caters to beginner traders, meaning their educational content is effectively non-existent.
3. FP Markets
Pros
- Low fees
- Multiple deposit/withdrawal options
Cons
- Limited portfolio
- Limited research
FP Markets is an Australian broker founded in 2005. They are regulated by ASIC and offer some of the lowest commissions and non-trading fees.
Like some of the other brokers on this list, the main downside for experienced traders is the lack of choice in other trading instruments; therefore, you will have to make the most of the 63 available currency pairs.
FP Markets uses the MetaTrader platform across the web, desktop, and mobile, which is fine and perfectly useable; however, as mentioned before, it can be underdeveloped in comparison to more modern platforms.
FP Markets is the best choice for cost-conscious traders willing to sacrifice decent research tools for lower trading and account fees. However, FP Markets does have a strong educational offering; therefore, FP Markets would work for a confident beginner.
4. Fusion Markets
Pros
- Great customer service
- Low fees
Cons
- Basic education
- Limited products
Fusion Markets has the lowest commission on this list at just $2.25 per lot per trade.
Another ECN broker regulated by ASIC, Fusion Markets, among others, has been operating since 2010 and is recognized for having excellent customer service available via phone and live chat.
Another trader that uses the MT4 platform is you can trade on your ECN account via the web trader, a desktop app, and on your smartphone.
There isn’t much choice of other instruments if you want to build a portfolio, but there are 90 currency pairs to choose from, so you should find what you need.
Fusion Markets employs the MT4 platform for ECN trading across the web, desktop, and mobile. While lacking in educational materials for beginners, it provides ample research through trading ideas, a news feed, and asset fundamentals.
5. IC Markets
Pros
- Low fees
- Excellent research
Cons
- Poor customer service
- Limited products
IC Markets have the highest minimum deposit for ECN accounts at $200 but an average commission; therefore, if you’ve got the capital, you might want to consider them thanks to their tight spreads.
You won’t have to worry about account or inactivity fees. You can use multiple deposit and withdrawal methods, including eWallets.
Although IC Markets are a relative newcomer in the world of brokers, founded in 2017, they are well regulated by ASIC, among others, so you can feel relatively comfortable investing with them.
IC Markets offers extensive research, including trading ideas, charting tools and a quality news feed.
While they have different customer support means, some traders have found them slow to respond at times.
Beginners will find the demo account useful, and there are plenty of educational videos, articles and webinars. However, these can be hard to find.
6. FXTM
Pros
- Great customer service
- Excellent research
Cons
- Inactivity and withdrawal fees
FXTM is one of the more popular forex traders, and they have a long track record of providing excellent research tools and great customer service.
Established in 2011, FXTM is regulated by the FCA in the UK.
With a minimum deposit of $10 and a fast, fully digital account opening, getting started with FXTM is simple — but complications arise when trying to understand what commission charges you will face.
FXTM only charges a commission when you are opening a trade. Still, how much will that depend on your account balance and your monthly trading volumes? It is worked out using a fairly complicated formula.
If you are concerned about non-trading costs, you will need to know that FXTM charges a $3 withdrawal fee and $5 a month after six months of no activity, so that is worth bearing in mind.
Active traders who aren’t planning to make lots of withdrawals can take advantage of the MetaTrader platform, research that includes trading ideas, a news feed, and a demo account.
The demo account is the extent of the educational content, though, so this might not be the best choice for a beginner.
The Advantages and Disadvantages of ECN Trading
The Advantages
Lower Trading Costs
While ECN trading includes commission, the tighter spreads can mean that your overall cost per trade is much lower — especially when you consider non-trading costs.
No Conflict of Interest
An important part of the ECN draw for traders is that the broker is not acting as an intermediary; they are not translating the offered prices in any way or adding extra to the spread for their profits.
In this way, they are never acting against the trader's best interest, and they are simply presenting the prices from several different market participants.
Liquidity
Trades can typically happen faster using an ECN broker, which means you can trade outside of market hours, and there is less likely to be any slippage.
This ‘always on’ mentality in such a liquid market helps to maintain that liquidity. There is always some action to be had on the forex market.
The Disadvantages
No Guaranteed Execution
Unlike a market maker broker that gives you the price within their platform, an ECN broker collates prices available on the market, and it is up to you to make the trade.
This means that the buy or sell is not guaranteed, so you will probably need to be more hands-on to make sure it goes ahead.
No Small Account Deposits
A commission charge only makes trading cheaper if you are using larger deposits.
The bigger the trade, the smaller the percentage of the trade is commission.
ECN accounts often have higher initial deposit requirements than standard accounts – they are usually favored by experienced or even professional traders rather than beginners or hobbyists.
High Leverage Ratios
The risk of forex, despite the high liquidity, also means that it is unlikely you will be able to make the most of leverage in an ECN account.
Most brokers will limit your available leverage according to the regulator for your jurisdiction. In the UK, that’s 30:1, while in the States, it can be 50:1.
Higher leverage can boost profits; however, it can also boost losses, so you need to consider that carefully.
What to Consider When Choosing an ECN Broker?
Focus On Security
Regulated platforms are safer.
There are several different ‘tiers’ of regulation, and it is the top-tier regulators that you should be looking out for when you are checking out a new ECN broker. These include the FCA and ASIC.
Regulation means that not only does the broker have to follow certain rules to keep your cash safe, but you might also qualify for investor protection, which could be very useful.
Understand the Costs
The cost of trading is not just the price you pay to open a position.
Brokers need to make money to be able to provide the service for you. They can do this through a wider spread (the amount between the bid price and the asking price), or they can take it through commission.
Either way, this covers the direct cost of your trade, but there are other fees that you should look out for.
These can include:
- Account management fees
- Inactivity fees
- Deposit fees
- Withdrawal fees
- Holding fees
Know Your Investment
Trading comes with risks, and you should never invest any money that you cannot afford to lose.
With that in mind, there are some ways that you can look after your finances while you are trading, and that starts with knowledge and education.
It is possible to ‘learn as you go’ with trading, but you need to have the right support.
If you are a complete beginner, choose an ECN broker that offers lots of learning opportunities and educational material.
More experienced traders should look for a broker that supports their strategies.
Whether that is through providing the right research tools in the platform or just allowing leverage or hedging, strategy is likely to be your best tool in making the most of your investments.
Frequently Asked Questions
The best ECN forex brokers include names like Pepperstone and IC Markets; however, what works best for you will depend on your investment strategy and your experience in trading.
Research ECN brokers carefully before deciding.
Lots of forex brokers offer ECN accounts. These accounts allow traders access to better prices, usually through tighter spreads. Still, they tend to charge a commission for providing the service.
As a forex trader, ECN brokers might be better for you if you want faster execution and the opportunity to get tighter spreads.
However, the addition of commission costs might make this more expensive in the short term for the beginner investor.
There are true ECN brokers, but many forex brokers offering ECN accounts also offer standard market maker accounts, so they might not be considered ‘true’ ECN brokers.
That said, as long as they provide unmitigated access to the range of prices available on the market, then they are working as ECN brokers.
New traders, or those not trading at volume, might find that adding the commission fee to their trades makes ECN brokers too expensive.
Other traders may find themselves at a disadvantage if their trades are not completed, as US Forex ECN brokers do not guarantee execution as a non-ECN broker does.
OANDA, a US-based forex broker, does not offer ECN accounts.
Hugo’s way as a company is marketed as a true ECN forex broker, with straight-through processing with top-tier financial institutions.
Final Thoughts
ECN brokers give traders access to the best prices available on the forex market by removing the ‘middleman’ and allowing price feed transparency. While this might mean that trades are not guaranteed, it does mean that profits can be increased as spreads between the bid price and the asking price are tighter.
USA Forex ECN brokers will charge a commission on each trade. This is used to cover the cost of trading, but the amount will differ between brokers (and even between traders with the same broker in some cases). Other fees might apply, so you need to be aware of this before you sign up.
ECN brokers are a great choice for experienced or high-volume forex traders who want access to the tightest spreads. Still, they might be too expensive for beginner or hobby traders with small deposits.
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