What Is The Best Electronic Communication Network (ECN) Forex Broker

As we previously discussed, STP and ECN operate as the NDD (No Dealing Desk) which means that traders' orders are forwarded to the interbank market without being processed by the dealing desk. Comparing to STP brokers, ECN forex brokers acts effectively as the major liquidity source, as it is represented by banks, hedge funds, and all the major market players.

Are you searching for a reliable ECN Forex Broker? Then you are right on our website. In this article, we will focus on ECN brokers and give you a list of the best 10 ECN brokers in 2021.

What Is ECN Broker

ECN stands for Electronic Communications Network. An ECN broker only matches trades between other market participants but cannot trade against the client.

By using different liquidity providers, an ECN broker is able to allow prices from these providers to compete in the same auction, which usually means that traders get better prices and cheaper trading conditions. What’s more, by using an ECN broker, traders usually trade in a more efficient and transparent environment.

Since ECN spreads are much smaller than those utilized by regular brokers, ECN brokers charge a set commission per transaction to their clients.

What are the Benefits of Using ECN Broker

ECN brokers offer forex traders the following advantages:

1. ECN Broker Don Not Trade Against Clients

An ECN broker is only the intermediary between your buying and selling orders, matching you up with different market participants. Hence, an ECN broker doesn’t bet against you, which means that it never takes the other side of your trading positions.

This trading model ensures you that there is no conflict of interest, as an ECN broker gets a commission whether you make or lose money.

2. Flat Commission Rate

Instead of making money off the bid-ask spread, ECN brokers usually charge a flat commission rate on each trade.

3. Tighter Bid-Ask Spreads

Through an ECN broker and a dedicated ECN account, traders are given unrestricted access to market prices. Considering that prices fluctuate upon supply, demand, volatility, and other market conditions, through the right ECN broker, you can trade on tight bid/offer spreads.

4. Speed

Trades are carried out immediately and at significantly thinner spreads. Many separate providers of liquidity are vying for orders to trade. It motivates them to deliver the lowest possible rates in a bid to beat the competition and attract traders.

5. Transparency

Due to how related information is relayed, transparency is yet another key advantage of an ECN broker. All ECN brokers are given access to the same feed and trade, thus, transparency of underlying market prices from multiple liquidity providers is assured.

Top 10 Best ECN Brokers in 2021

1. Dukascopy

Dukascopy is a broker that has the support of the Swiss government, which allows trading in currencies, crypto-currencies such as bitcoins, raw materials, energy, bonds and shares.

2. Pepperstone

Pepperstone is an Australian forex broker that also offers CFDs. It was established in 2010 and opened a London office in 2015 to be able to better serve its European clients. After Brexit, new clients registering from the EU are served by their German and Cyprus arm.

3. FP Markets

FP Markets is a global broker offering traders access to a full suite of CFDs across Forex, Equities, Commodities and Futures. Traders can access over 10,000 trading instruments through a selection of industry-leading platforms including MT4, MT5, IRESS, and Webtrader.

4. Axi

Axi is a trading name of AxiCorp Financial Services, an Australian financial services company founded in 2007.

5. InstaForex

InstaForex is a forex broker offering the MT4 and MT5 trading currency platforms. InstaForex.com offers over 105 currency pairs, bitcoin, cryptocurrencies, shares, oil, gold, silver and cfds for your personal investment and trading options.

6. FBS

FBS is a top online broker offering MT4 & MT5 trading across a range of instruments.

7. HYCM

HYCM is an online retail broker that earned several awards from global bodies. Traders can trade forex, stocks, commodities, indices and cryptocurrencies.

8. IC Markets

IC Markets is the World's largest Forex CFD provider by volume offering Forex, indices, commodities, cryptocurrency and CFD trading.

9. Valutrades

Valutrades is a FCA regulated ECN broker offering trading on forex, commodities and CFD's via the Metatrader5 and Metatrader 4 platforms.

10. Doo Prime

Doo Prime is an online trading platform that allows users to trade forex, commodities, CFDs, indices, metals, and stocks.

Conclusion

The amount of ECN brokers in existence seems to be increasing year after year. Most likely, this is because the market isn’t centralised, and so traders have access to a much greater variety of trading conditions and exchange rates. This is very attractive to brokers and traders alike. 

As you can see, using an ECN broker allows you to trade more efficiently and profitably, thanks to better trading conditions and better trading execution. With increased transparency and no conflict of interest.

Before you make a final decision on what type of broker you would like to use, it is important to do some research. No two brokers are the same, and their products and services on offer will tend to be slightly different.