Investopedia does not provide tax, investment, or financial services and advice. The information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Instead of making money off the bid-ask spread, usually charge a flat commission rate on each trade.

So that the broker can make a fee for the service they provide, you will pay a separate commission in addition to the spread. To open an ECN forex trading account in the USA, start by choosing a broker like or Interactive Brokers. Visit their website and look for the account registration or sign-up option. You’ll need to provide personal information and financial details and possibly answer questions about your trading experience.

Additionally, its education library is loaded with different strategies and techniques for trading. If you’re just getting started learning how to trade forex, you’ll find a wealth of knowledge to get you started. Should you reside outside the US, such as in Australia, the UK or many European countries, you’ll actually find a wider choice of potential brokers that may interest you. Well-respected CFD firms to consider include Pepperstone, FP Markets, IC Markets or OANDA. After completing the application, you may need to submit identification documents for verification.

ecn broker

You might find an ECN broker with which you are very comfortable, but that does not mean it offers the best prices. A broker with the most affordable spreads helps you save money over the long term. You might also register for more than one broker depending on the spreads they offer. When you hear the term ECN accounts, this means prices are derived from the interbank market with no markup from the broker.

Logistically, location is significant as the best ECN brokers can only accept accounts for traders in the countries they work within. For example, RoboForex cannot accept traders in the USA, Japan, Canada and Australia, despite being a top ECN broker. This means clients from the US will need to look to another broker, such as, another top ECN brokerage. Similarly, the best ECN brokers in Kenya, Dubai, Malaysia, Cyprus or the Philippines might differ from the top providers in Nigeria, South Africa, India, Australia and Singapore. Whereas the STP broker provides access to different providers in their liquidity pool, the ECN plays the role of a hub.

Having traded since 1998, Justin is the CEO and Co-Founded CompareForexBrokers in 2004. Justin has published over 100 finance articles from Forbes, Kiplinger to Finance Magnates. He has a Masters and Commerce degree and has an active role in the fintech community. Another difference is that a true ECN account won’t have a dealing desk, but a standard account will have one.

It operates as a smart facilitator, seamlessly merging buy and sell orders from various origins and conducting real-time order matching and execution. Both ECN and STP models offer fast executions and tight spreads which lend them to a range of strategies, including scalping trading. In fact, many ECN, STP or hybrid brokers offer zero-pip forex spreads, though they may charge a fixed commission per lot. The simple definition is that Electronic Communication Network (ECN) brokers enable traders to place competing bids against each other.

ecn broker

A big part of being our top pick for ECN traders is the fact that there is a wide selection of trading platforms. Envision it as a marketplace for broker’s clients to trade with each other, so traders like you can get the best possible offer at that moment in time. Axofa is a forex and CFD broker registered in St Vincent and the Grenadines. The broker offers three account types with access to forex, commodities and indices. With ECN processing, low minimum deposits and no commissions, Axofa remains an attractive option, although the broker does not hold a reputable license. Price feed transparency is also a byproduct that many consider a benefit because of how the information is transmitted.

On the other hand, Electronic Communication Networks (ECN) acts as a kind of hub where liquidity providers can find your orders. As a trader, it’s not worth worrying about the difference between ECN and STP. Both use much the same liquidity providers, so the spreads you get are almost identical; it’s just marketing jargon. While beginner traders may prefer to trade a commission-free account because of its simpler cost structure and because they are more common in the U.S. Experienced traders prefer ECN accounts as the spreads are lower, and this is also true for beginners, but make sure you factor in the commissions as part of the overall cost. Unlike traditional brokers that may trade against you, ECN brokers connect your orders with other liquidity providers, charging a small fee for this service.

ecn broker

It offers educational resources, including video guides, for beginner, intermediate, and advanced traders. is Benzinga’s top choice for the best forex broker and is continually favored by brokerages and individual investors alike. A subsidiary of GAIN Capital, they have almost $1.5 billion in assets and $350 million in available liquidity. is also known for executing 99.65% of its trades in under one second.

Price quotations are gathered from numerous market participants, meaning ECN trading avoids wider spreads. “Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker’s prop trading service will also appeal to users looking for funded accounts with up to $200K available.” Founded in 1999, is now part of StoneX, a financial services organization serving over one million customers worldwide. Regulated in the US, UK, EU, Australia and beyond, the broker offers thousands of markets, not just forex, and provides excellent pricing on cutting-edge platforms. It also avoids the wider spreads that are common when using a traditional broker and provides overall lower commissions and fees.

The hub essentially acts as the primary liquidity source, formed of the different hedge funds, banks and market players. This is a result of few liquidity providers being able to cater to smaller position sizes, which can prove challenging for beginners. The technology behind true ECN brokers allows for faster executions and tighter spreads with higher leverage and greater transparency. Here we list the best ECN brokers in the world 2024 and also explain how ECN brokers work, their benefits and drawbacks and how to get started.

The only way to make sure that a forex broker is a true is to make sure that you are trading with a regulated broker. Any regulated brokerage firm will provide information regarding its regulated status on its website., registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade. ECN brokers can provide fast execution or orders and tends to come with more favorable prices. Because the forex market can be a wildly unregulated playing field, you want to choose a broker that can promise security and anonymity. In the US, ECN accounts are regulated by bodies like the Commodity Futures Trading Commission (CFTC) and must adhere to rules set by the National Futures Association (NFA).

On the flip side, it’s worth noting that ECN accounts may have challenges, such as variable spreads and higher initial deposit requirements. Explore the world of ECN accounts in Forex trading, tailor-made for individuals seeking unparalleled transparency and direct market access. Unlike conventional trading accounts, ECN accounts seamlessly link traders directly to the global currency market, aligning their orders with market participants. ECNs facilitate the execution of trades by promptly matching buy and sell orders for securities in real-time. Because an ECN instantly matches orders from traders with the best available buy and sell prices from all participants in the forex market, this typically results in tighter bid-ask spreads. ECN brokers usually charge commissions and have high minimum account balances.