Best ECN Brokers
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.
Top 5 ECN Brokers
We have reviewed almost 500 brokers and these are the 5 best ECN brokers:
#1 - FOREX.com
Why We Chose FOREX.com
Founded in 1999, FOREX.com 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.
"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."
- DayTrading Review Team
- Instruments: Forex, Spot Metals
- Regulator: NFA, CFTC
- Platforms: MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
- Minimum Deposit: $100
- Minimum Trade: 0.01 Lots
- Leverage: 1:50
Pros
- With over 20 years of experience, excellent regulatory oversight, and multiple accolades including runner-up in our 'Best Forex Broker' awards, FOREX.com boasts a global reputation as a trusted brokerage.
- FOREX.com offers industry-leading forex pricing starting from 0.0 pips, alongside competitive cashback rebates of up to 15% for serious day traders.
- Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
Cons
- FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
- Demo accounts are frustratingly time-limited to 90 days, which doesn’t give you enough time to test day trading strategies effectively.
- There’s no negative balance protection for US clients, so you may find yourself owing more money than your initial deposit into your account.
#2 - DNA Markets
Why We Chose DNA Markets
DNA Markets is a forex and CFD broker established in 2020. The broker operates two entities in Australia and the offshore jurisdiction, St Vincent and the Grenadines. Traders can access 250+ markets, with a Standard account for beginners and a Raw account for experienced traders. The reliable MetaTrader 4 and MetaTrader 5 platforms are available, alongside Signal Start.
"DNA Markets is an excellent choice for short-term traders familiar with the MetaTrader platforms. The smooth sign-up process also makes it easy to get started while the $100 minimum deposit is accessible. That said, DNA Markets trails the top brokers in education, research and mobile trading. "
- DayTrading Review Team
- Instruments: CFDs, Forex, Indices, Commodities, Stocks, Crypto
- Regulator: ASIC
- Platforms: MT4, MT5
- Minimum Deposit: $100
- Minimum Trade: 0.01 Lots
- Leverage: 1:500
Pros
- Low trading fees with spreads from 0.0 pips in the Raw account and zero non-trading fees
- Top-rate platforms and charting tools for day traders with access to MT4 and MT5
- 24/5 customer support with response times of <2 minutes during testing
Cons
- Despite access to MT4 and MT5, there is no proprietary trading app
- The investment offering trails alternatives, especially in terms of stocks, cryptos and commodities
- Although it continues to strengthen its client base and reputation DNA Markets lacks the track record of top brokers like Vantage
#3 - LQDFX
Why We Chose LQDFX
LQDFX is a straight-through processing (STP) broker based in the Marshall Islands. The offshore trading firm offers competitive spreads from 0.0 pips, free deposits, 24/5 support and access to the hugely popular MetaTrader 4 platform. LQDFX also runs a competitive bonus program for short-term traders.
"LQDFX is best for active day traders looking for ultra-tight spreads, low fees and high leverage up to 1:1000. Forex traders will particularly appreciate the strong range of 70+ currency pairs with minimum deposits starting from $20."
- DayTrading Review Team
- Instruments: Forex, CFDs, Stocks, Indices, Commodities, Crypto
- Platforms: MT4
- Minimum Deposit: $20
- Minimum Trade: 0.01 Lots
- Leverage: 1:1000
Pros
- Tight forex spreads from 0.0 are available in the raw spread account and the $3.50 per lot commissions are in line with competitors
- The broker offers the industry favorite MT4 platform and mobile app, with 30 technical indicators for chart analysis
- The $20 minimum initial deposit is accessible for beginners, and the Micro account will serve those looking to trade in smaller volumes
Cons
- Market research tools and educational resources are very limited compared to top brands like IG
- It's a shame that there's no copy trading platform for beginners or experienced strategy providers
- There are no additional charting platforms available, such as MT5 or a proprietary solution
#4 - Axofa
Why We Chose Axofa
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.
"Axofa could be a good option for clients looking for social trading features alongside the MT5 platform. The low entry requirements and ECN spreads are particularly promising, but the lack of transparency and respected regulatory oversight raises security concerns."
- DayTrading Review Team
- Instruments: Forex, CFDs, Stocks, Indices, Commodities
- Regulator: SVGFSA
- Platforms: MT5
- Minimum Deposit: $1
- Minimum Trade: 0.01 Lots
- Leverage: 1:1000
Pros
- The broker offers a range of local payment methods, especially for clients in Asia, as well as crypto deposits
- The $1 minimum deposit across all 3 accounts will appeal to novices and those on a budget
- There's a proprietary social/copy trading service for beginners looking to follow successful strategies and for experienced traders looking to sell their strategies
Cons
- There is a lack of transparency around pricing and account conditions, which significantly reduces the trust score
- The offshore operations and lack of any regulatory oversight is a major concern
- There is limited verifiable information about the broker’s owners and background
#5 - Sage FX
Why We Chose Sage FX
SageFX is an offshore, unregulated CFD broker that offers highly leveraged trading on forex, stocks, commodities, indices and crypto via the TradeLocker platform. Traders can access commission-free trading or an ECN account with tight spreads. While the broker's regulatory status is weak, it does provide segregated accounts and two-factor authentication.
"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."
- DayTrading Review Team
- Instruments: Forex, indices, cryptos
- Regulator: Pending
- Platforms: TradeLocker
- Minimum Deposit: $10
- Minimum Trade: 0.01 Lots
- Leverage: 1:500
Pros
- High leverage up to 1:500
- Prop trading accounts with multiple funding tiers
- Low starting deposit from $10
Cons
- Not regulated by any reputable body
- Lacks educational resources and other extra features
- Relatively narrow range of asset classes
What Is An ECN Broker?
The simple definition is that Electronic Communication Network (ECN) brokers enable traders to place competing bids against each other. They are Non-Dealing Desk (NDD) brokers, meaning that instead of passing orders to market makers who take the opposing position in a trade, they connect buyers directly with sellers. When they cannot match two counter-parties, they reflect the highest bid and lowest ask price listed in the open market.
ECN forex brokers act as a major source of liquidity for retail traders versus major market makers like large banks, hedge funds and other financial institutions. They are the fastest-growing brokerages globally and are particularly popular for forex trading, offering greater transparency for investors.
ECN Brokers Vs STP Brokers
ECN brokers are very similar to Straight Through Processing (STP) providers. STP brokers also have no dealing desk. Listed trades are routed to the broker’s group of liquidity providers, such as hedge funds, big banks and investors. These providers act as counter-parties for each trade and compete for the best bid/ask spreads. The broker effectively acts as a silent facilitator, connecting the trader with its internal liquidity pool and taking its fee from a mark-up in the spread.
The primary difference with ECN vs STP brokers is routing. Whereas the STP broker provides access to different providers in their liquidity pool, the ECN plays the role of a hub. The hub essentially acts as the primary liquidity source, formed of the different hedge funds, banks and market players. The other notable difference is position size. ECN brokers typically cap minimum position sizes at 0.1 lots. This is a result of few liquidity providers being able to cater to smaller position sizes, which can prove challenging for beginners.
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.
Benefits Of ECN Brokers:
There are several advantages to trading with an ECN broker:
- Execution speed – Pure ECN forex brokers such as Pepperstone connect you directly to liquidity providers ensuring direct market access and faster fills.
- Transparency – ECN brokers prevent price manipulation as everyone uses the same feed and trades at a defined price. No investor enjoys a built-in advantage over other traders on the ECN.
- Trading hours – ECN providers generally let you trade beyond traditional trading hours, allowing investors to react to after-market news announcements, for example.
- Leverage – Top ECN brokers typically offer leveraged forex trading. Ratios vary depending on your jurisdiction, but it’s not uncommon to find 1:100 leverage levels.
- Scalping – Rapid order executions and tight spreads lend ECN brokers to high volume scalping forex strategies. With that said, it’s worth checking the broker’s guidelines around scalping before you deposit funds.
- Regulation – ECN providers are heavily regulated. This is particularly important in light of the increasing number of online forex scams. The best ECN brokers are regulated and meet compliance measures. See our list of the best ECN brokers above for trustworthy providers.
Drawbacks Of ECN Brokers
Downsides to trading with ECN brokers include:
- Commission – Forex commissions charged by most ECN brokers usually range between $2.50 to $5.00 per lot. Fees tend to be higher compared to trading CFDs, stocks, binary options, or other non-ECN trading brokers. This may mean ECN is less favourable for low-volume retail traders or those with micro-accounts.
- Volatility – Forex markets are vulnerable to sudden upsurges in variable spreads, especially during high market volatility. It’s therefore important traders use appropriate risk management tools.
- Deposits – The best ECN brokers generally come with higher opening deposits than standard trading accounts. This is because ECN providers often shift the responsibility of meeting market liquidity requirements on the trader. This is the opposite of a market maker broker who can intervene to provide liquidity on the trader’s behalf, and therefore offer lower minimum deposits.
How To Identify The Best ECN Brokers
The top true ECN brokers are regulated by reputable financial agencies. For example, if you’re trading forex in the UK, check the provider is regulated by the FCA. For traders in Europe, check for CySEC regulation. Reliable regulators will cap leverage limits to protect a trader’s risk exposure.
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 Forex.com, 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.
You should also check the trading fees and commissions and whether you are allowed to start with a demo account. This will give you time to practice and get familiar with the platform, whether you are using MetaTrader 4 (MT4), MetaTrader 5 (MT5), cTrader or another. Brokers offer different platforms so it’s important to use one you feel comfortable with.
Other considerations to take into account on your broker checklist comparison should include:
- Fast deposit and withdrawal processing times
- Providers with a history of at least two years
- Brokers with no deposit bonuses
- A decent customer support team
- Forex trading rankings
- Good online reviews
Final Word On ECN Brokers
ECN brokers bring significant benefits for forex traders in the US, UK and beyond. High levels of market transparency mean price manipulation is not possible. With that said, it’s still worth looking for regulated ECN brokers. Leverage levels, commissions, plus trading tools are also important to consider when opening a live account with an ECN broker.
FAQ
What Does An ECN Broker Mean?
An ECN broker is a technology hub, or bridge, that enables traders to place competing bids against each other or liquidity providers.
How Do ECN Brokers Make Money?
ECN brokers typically make money from fixed commissions charged to the customer on each trade. This is in contrast to market maker models that generally take their cut from the spread.
What Is The Difference Between A Market Maker And ECN Broker?
Market makers help ensure there’s enough liquidity so trades can be executed seamlessly. Market makers typically take the opposing side of a trade. In contrast, ECN brokers connect buyers and sellers, drawing on various liquidity providers. ECN brokers usually offer tighter spreads, faster order execution and increased transparency.
Who Are The Top ECN Brokers In The UK And Europe?
Among the top European ECN are Pepperstone, Axi, IG, Swissquote and FXCM. See our list of the best ECN brokers.
Is XM An ECN Broker Or STP?
XM is regulated by the FCA and offers both ECN and Straight Through Processing (STP) options. Which model you want to use will depend on your strategy, trading capital, position size and leverage requirements.