\nXM<\/td>\n As low as zero<\/td>\n $3.5 per 100,000<\/td>\n No fees<\/td>\n $15 fee after one year of inactivity<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\nWhat Is An ECN Broker<\/h2>\n An ECN broker is quite different from a standard market maker. Often, market makers have been accused of fixing the prices to their benefit or adjusting the prices of forex pairs in order to increase their profits, but going for an ECN broker takes care of all that. They\u2019re a type of forex broker who connects market participants like you through an electronic communications network (ECN). This is a computer-based system that matches buy and sell orders placed by different traders.<\/p>\n
By doing this, ECN brokers are essentially Non-Dealing Desk (NDD) brokers, which means they themselves do not do anything except connect buyers and sellers to each other. This is different from a market maker who makes markets and sets the prices of the security themselves based on the supply and demand in the market.<\/p>\n
ECN Forex Brokers vs Market Makers<\/h2>\n Before starting with an ECN broker, it is important for you to be aware of how exactly market marker brokers and ECN brokers are different. These are the two types of forex brokers that you can use to trade currency pairs on the market.<\/p>\n
The basic and fundamental difference is that a market maker gives you a buy and sell price based on the demand and supply in the market, and they charge a spread on each trade you make. This spread is the difference between the buy and sell price, and it is how the broker makes their profit. The wider the spread, the higher the profit for the broker. This has led to people accusing some market makers of manipulating the prices to maximise the spread and increase their own profits at the cost of their customers. On the other hand, ECN brokers function in quite a different manner. They do not set the prices themselves, instead, they just provide you with access to a network of other similar market participants. This way, you can buy and sell directly from the other market players through the Electronic Communication Network (ECN). Since ECN brokers do not set spreads, they instead charge fixed commissions on each trade you make.<\/p>\n
Another difference between market makers and ECN brokers is the liquidity situation and the guarantee of order execution. When you place an order with a market maker, you are guaranteed an order execution because the prices are set by the broker and they charge a spread on your trade. Therefore, the market maker takes on the other side of the trade. On the other hand, this does not happen with ECN brokers, and your order only gets filled if there is an opposing party that is ready to take the other side of the trade. Therefore, the probability of your order getting filled depends largely on the state of liquidity in the market at the time when you place an order.<\/p>\n
Their fee structure also differs quite a bit. ECN brokers charge a fixed commission on each trade depending on the size of the trades. The lot size is usually 1,000, though this can differ largely between brokers. On the other hand, most market makers do not charge commissions, however, they charge a spread on every trade. More often than not, market makers have variable spreads, which means that they are tighter during times of increased volatility than they are for the rest of the day. In addition to this, market makers also charge an overnight fee called the swap rate. This is done because, at the end of every trading day, they have to roll over all your open trades to contracts for the next day. They charge a fee for doing this, called the overnight fee.<\/p>\n
The two types of brokers are also different in terms of their suitability for algorithmic trading strategies<\/a>. ECN brokers are usually more suitable for these automated trading strategies because they have no slippages and almost instantaneous execution. In addition to this, they also have little to no spreads, and this is dictated directly by the markets as opposed to by brokers. Market-making brokers do not have any of these advantages, which is why they are not preferred for any strategies that involve algorithms or are programmed by computers.<\/p>\nLastly, another difference is in terms of how they are for different levels of traders. ECN brokers are normally used by advanced and experienced traders because they wish to see the market order book live instead of paying spreads as dictated by the market makers. The Level 2 order book that ECN brokers usually provide access to is a goldmine of information for experienced traders since it tells them about the volatility and the sentiment of the market regarding the forex pairs. On the other hand, market makers do not provide access to the order book since they are the ones that usually take on the other sides in a position. Therefore, they are much more suitable for beginners. This is because they offer guaranteed execution, a spread, and a variety of other tools and benefits that make them simpler to navigate and understand as compared to an ECN broker.<\/p>\n
Benefits of ECN Forex Brokers<\/h2>\n Using ECN brokers has a lot of advantages and disadvantages. However, on the whole, they are considered to be a much better option for trading than market makers or dealing desk brokers. There are several reasons why this is the case, and they have been discussed below:<\/p>\n
\nECN brokers, unlike market makers, do not take on positions against their clients. Hence there is no conflict of interest, and therefore they have no incentive to manipulate or fix the prices.<\/li>\n They usually provide better and more competitive prices than market makers since they do not have to rely on a spread to make money. Their trading conditions usually end up being more cost-effective than trading through a market maker if you are an active trader, even despite the commissions that you pay on each lot.<\/li>\n The trading environment that ECN brokers provide is much more transparent because you are paired directly with buyers and sellers in the market.<\/li>\n The market execution of a trade through an ECN platform is much faster because you are directly connected to the other party via the ECN rather than having to go through an intermediary.<\/li>\n They have tighter spreads than market makers because they do not rely on spreads for their revenue. Most ECN brokers, in fact, offer accounts with zero spreads.<\/li>\n ECN brokers are much more useful for experienced traders since they offer access to a wider variety of information that helps the traders understand the market sentiment and volatility in a more concise manner.<\/li>\n ECN brokers are better for day trading, scalping trading, as well as algorithmic trading.<\/li>\n<\/ul>\nConclusion<\/h2>\n In conclusion, having an ECN broker instead of a market maker has a variety of advantages for you. Not only do you get access to some competitive rates, but it also provides you with more information to enable you to gauge the market in an efficient manner.<\/p>\n
While different ECN brokers are suitable for different reasons, you might consider VantageFX\u00a0\u2013 do your own research and test out forex trading on one of their demo accounts.<\/p>\n
FAQs<\/h2>\n\n
\n What is a true ECN broker?\n \n<\/svg>\n <\/h3>\n A true ECN broker is a financial services provider that links the buyers and sellers of a particular instrument directly through the Electronic Communication Market instead of taking the other side itself and making a market. There is no trading that is carried out by an ECN broker.<\/div>\n <\/section>\n
\n How do ECN brokers make money?\n \n<\/svg>\n <\/h3>\n Unlike market makers who make money by charging a spread between the buying and selling prices, ECN brokers make money by charging a fixed commission on every lot that you trade.<\/div>\n <\/section>\n
\n What is the right way to identify an ECN broker?\n \n<\/svg>\n <\/h3>\n There are several ways for you to check if a broker is an ECN broker or not. For starters, ECN brokers offer very low variable spreads when compared to market makers. Secondly, most ECN brokers define their services in that manner on the agreement that they make you accept before you are allowed to open an account with them. Thirdly, any broker who enables negative slippage is not an ECN broker, since that is only allowed by market makers.<\/div>\n <\/section>\n
\n Can I trade CFDs with a UK ECN broker?\n \n<\/svg>\n <\/h3>\n With a UK ECN broker, you will be able to trade any product as long as there is a large enough pool of liquidity providers.<\/div>\n <\/section>\n
\n How can you reduce your ECN fees?\n \n<\/svg>\n <\/h3>\n One of the many ways in which you can reduce the fees you pay for every trade on ECN platforms is to check whether they have a rebate and cashback program. Most major ECN brokers like Pepperstone, VantageFX, and FXTM offer programs like this, where they basically refund you a part of the commission for every trade that you execute.<\/div>\n <\/section>\n <\/div>\n\n
![\"best](\"https:\/\/tradingplatforms.com\/uk\/wp-content\/uploads\/sites\/2\/2021\/11\/Vantage-FX.jpg\")
<\/a>VantageFX is another ECN broker in the UK for 2025 that offers a variety of different account types. It has a high leverage account that provides you with higher leverage than most other similar platforms, and a cost-effective trading solution that helps you minimise the fees that you pay to trade on the platform. It is a platform for high-volume traders that are looking for optimal execution speeds combined with competitive spreads and a fully transparent trading environment that provides access to different liquidity providers.<\/p>\n![\"ecn](\"https:\/\/tradingplatforms.com\/uk\/wp-content\/uploads\/sites\/2\/2021\/11\/Screen-Shot-2021-06-14-at-15.44..png\")
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<\/a>Pepperstone is another very popular ECN broker that has over 500,000 users worldwide and was recently awarded several titles as a Global Forex ECN broker. It is a no-dealing desk broker and offers both ECN and STP accounts by providing access to some of the main liquidity providers in the industry, such as banks.<\/p>\n![\"ecn](\"https:\/\/tradingplatforms.com\/uk\/wp-content\/uploads\/sites\/2\/2021\/11\/Screen-Shot-2021-06-15-at-12.51.03.png\")
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