In this guide, we will go over the best ECN Forex Brokers based on various factors. An Electronic Communication Network (ECN) broker works by “cutting out the middleman” in forex trading. Where other brokers set their ask price for buying and selling securities, ECN platforms offer a straight-through processing execution to clients.
Forex traders using ECN accounts can set the conditions for the trades they want to make, such as choosing the type of instrument, spread, lot size, etc. Brokers then search through their database for providers who offer agreeable terms.
Best ECN Forex Broker 2023
Below we list the top rated ECN brokers. We base our research on a variety of factors such as fees, commissions, spreads, account types, trading tools, trading platform, security, regulation, and more.
Here are our top ECN Broker picks:
- Pepperstone – Best ECN Forex Broker Overall
- FP Markets – Best ECN Forex Broker With Tight Spreads
- Interactive Brokers – Best ECN Broker for US Clients Overall
- IC Markets – Trusted ECN Broker
- XM – Great ECN Broker for Education Tools
- FXTM – Good ECN Broker for Customer Service
- RoboForex – Best Micro Account ECN Forex Broker
- Forex.com – Fast Execution ECN Broker
- InstaForex – Good Trading Tools Forex ECN Broker
- Exness – Good ECN Broker for Research Tools
Table of contents
- Best ECN Forex Broker 2023
- Pepperstone – Best ECN Forex Broker Overall
- FP Markets – Fast Execution ECN Broker
- Interactive Brokers – Best ECN Broker for US Clients
- IC Markets
- XM
- FXTM
- Forex.com
- RoboForex
- Compare ECN Brokers
- Benefits of using an ECN Broker
- ECN vs Market Maker
- Difference Between ECN, STP, and Dealing Desk Broker
- How to tell if a broker is a fake ECN broker
- ECN and Scalping
PFI Rating: 4.9/5
Pepperstone – Best ECN Forex Broker Overall
Pepperstone is our top pick as the best ECN broker. Pepperstone was founded in 2010 and offers CFDs on Forex, Crypto, Shares, Indices, and Cryptocurrencies. Pepperstone is a safe and reliable ECN forex broker regulated by top-tier authorities. Pepperstone uses proprietary software to execute ultra-fast trades with minimal slippage.
The minimum deposit is $0 although they recommend a minimum of $200. Pepperstone offers a wide variety of deposit methods.
Forex trading fees are low. Pepperstone offers two account types: Razor and Standard.
- Regulated by Top Authorities
- Low ECN Spreads
- No Minimum Deposit
76.6% of retail investor accounts lose money when trading CFDs with this provider
PFI Rating: 4.9/5
FP Markets – Fast Execution ECN Broker
FP Markets is the runner-up as the best execution ECN broker. FP Markets was founded in 2005 and is regulated by top-tier authorities worldwide.
The minimum deposit is $100. They offer two account types: Standard and Raw.
Their trading fees are among the lowest in the industry starting from 0.0 pips.
FP Markets offers maximum leverage of up to 1:500 depending on the country of your residence. They offer Forex, Shares, Metals, Commodities, Indices, Cryptocurrency, Bonds, and ETFs.
On FP Markets Official Website
PFI Rating: 4.9/5
Interactive Brokers – Best ECN Broker for US Clients
Interactive Brokers was founded in 1978 and is regulated by reputable authorities worldwide. Interactive Brokers offer access to a wide variety of markets, the best on this list.
The minimum deposit is $0.
Their trading fees are among the lowest in the industry.
They offer trading on Stocks, ETFs, Options, Futures, Currencies, Cryptocurrencies, US Spot Gold, Bonds, Mutual Funds, and Hedge Funds.
On Interactive Brokers' Official Website
PFI Rating: 4.8/5
IC Markets
IC Markets was founded in 2007 and is regulated by ASIC, CySEC, the Securities Commission of The Bahamas, and the Financial Services Authority of Seychelles.
While IC Markets isn't a True ECN broker, they offer an ECN environment pricing model. They source their pricing from liquidity providers. This ensures the best prices with no dealing desk intervention.
The minimum deposit is $200.
Their trading fees are low.
IC Markets offer CFD trading on Forex, Stocks, Bonds, Futures, Cryptocurrencies, Bonds, Commodities, and Indices.
On IC Markets' Official Website
PFI Rating: 4.8/5
XM
XM is next on our list and just like IC Markets, is not a true ECN broker. XM was founded in 2009 and is regulated by top-tier authorities.
XM offers ECN pricing with the XM zero account. The commission on the XM zero account is $3.5 per lot. The maximum leverage is set to 30:1.
While IC Markets isn't a True ECN broker, they offer an ECN pricing model. They source their pricing from an international liquidity pool. This ensures the best prices with no dealing desk intervention.
The minimum deposit is $5.
Their trading fees are low.
XM offers CFD trading on Forex, Stocks, Equity Indices, Precious Metals, Energies, and Commodities.
77.74% of retail investor accounts lose money when trading CFDs with this provider.
PFI Rating: 4.7/5
FXTM
FXTM was founded in 2014 and is regulated by top-tier regulators worldwide.
FXTM offers two ECN accounts: their ECN and ECN zero account.
Their execution speeds are great and spreads range from 0.0 to 0.1. The minimum deposit is $500 for the ECN account and $200 for the ECN zero account. The minimum for their FXTM Pro Account is $25,000.
Their Forex trading fees are low.
FXTM offers CFD trading on Forex, Indices, Metals, and Commodities.
77.74% of retail investor accounts lose money when trading CFDs with this provider.
PFI Rating: 4.7/5
Forex.com
Forex.com was founded in 2001 and is regulated by CFTC.
Like XM and IC Markets, Forex.com is not a true ECN broker but offers competitive fees and ECN pricing. Through an STP pro account, you get access to a deep international liquidity pool.
Their execution speeds are good and spreads are in line with the industry average. The minimum deposit is $100.
Forex.com offers Forex, Gold and Silver, Futures, and Futures and Futures Options.
On Forex.com Official Website
PFI Rating: 4.4/5
RoboForex
RoboForex was founded in 2009 and is regulated by FSC in Belize. Compared to the regulation of other brokers on our list the Belize FSC is not considered a top-tier regulator.
RoboForex offers leverage up to 1:500 and has no minimum deposit. Through their ECN account, you get access to interbank liquidity.
The execution speeds are good and spreads are tight. The minimum deposit at RoboForex is $10.
RoboForex offers Forex, Stocks, Indices, ETFs, Commodities, Metals, Energy Commodities, and Cryptocurrencies.
On RoboForex Official Website
Compare ECN Brokers
Below we compare brokers offering ECN accounts.
| Trading Platform | Pepperstone | FP Markets | Interactive Brokers | IC Markets | XM | FXTM |
|---|---|---|---|---|---|---|
| Founded | 2010 | 2005 | 1978 | 2007 | 2009 | 2011 |
| Regulation | ASIC, CySEC, FCA, SCB, DFSA, BaFin, CMA | ASIC, CySEC | SEC, CFTC, FCA, NFA | ASIC, CySEC, FSA, SCB | CySEC, ASIC, ESMA, BaFin | FCA, CySEC, FSCA, MiFID, FSA, BaFin, AMF, FCMC, AFM |
| Offering Of Investments | CFDs on Forex, Crypto, Shares, Indices, Crypto | Forex, Shares, Metals, Commodities, Indices, Cryptocurrency, Bonds, ETFs | Stocks, ETFs, Options, Futures, Currencies, Cryptocurrencies, US Spot Gold, Bonds, Mutual Funds, Hedge Funds | CDFs on Forex, Commodities, Indices, Bonds, Cryptocurrency, Stocks, Futures | Shares, Forex, Commodities, Equity Indices, Precious Metals, Energies, Stocks | Forex, Indices, Forex Indices, Commodities, Metals, Stocks |
| Minimum Deposit | $0 | $100 | $0 | $200 | $5 | $50 |
| Demo Account | Yes | Yes | Yes | Yes | Yes | Yes |
| Withdrawal Fee | $5 | $0 | 1 Free Withdrawal per Month | $0 | $0 | $3 for Credit Cards, $20 - $40 bank transfer, $0 for Skrill / Neteller |
| Inactivity Fee | $0 | $0 | No | $0 | $15 after one year then $5 per month | $5/month after 6 months |
| Deposit Methods | Credit/debit cards, Bank/Wire Transfer, PayPal, Neteller, Skrill, UnionPay | Credit Cards. Debit Cards, Bank Transfer, Ngan Luong, FasaPay, Online Pay, Broker to Broker, Neteller, Skrill, PayTrust, PayPal, Bpay, Poli | Bank Wire, Credit Cards, ACH, Mail a check, Rollover, Online Bill Pay, Trustee-to-Trustee, SEP Contribution | Credit Cards, Debit Cards, PayPayl, Neteller, Skrill, UnionPay, Wire Transfer, Bpay, Fasapay, Broker to Broker, Poli, Thai Internet banking, Klarna, Rapidpay, Vietnames Internet Banking | Bank Transfer, Credit Cards, Debit Cards, Electonic Wallets | Credit Cards, Debit Cards, e-Wallets, Bank Wire, Local Payment Solutions |
Fees Compared
Compare the trading fees below to get a better understanding of how ECN brokers compare.
| Trading Fee | Pepperstone | FP Markets | Interactive Brokers | IC Markets | XM |
|---|---|---|---|---|---|
| EURUSD | Minimum from 0.0 and 0.17 average spread (Razor Account) Minimum from 0.6 and 0.77 average spread (Standard Account) | from 0.0 - 1.3 (average 0.2 pips) | Spreads | N/A | average 0.00017 |
| GBPUSD | Minimum from 0.0 and 0.59 average spread (Razor Account) Minimum from 0.6 and 1.19 average spread (Standard Account) | from 0.0 - 1.8 (average 0.7 pips) | Spreads | N/A | average 0.00021 |
| Apple Fees | 0 + market spread | Spread | $0 commissions | N/A | average 0.00021 |
| Tesla Fees | 0 + market spread | Spread | $0 commissions | N/A | Spread from 1.73 |
| Amazon Fees | min. 0.4 spread | Spread | $0 commissions | N/A | Spread from 5.85 |
| S&P 500 Fees | N/A | N/A | N/A | N/A | N/A |
| Options Fee | N/A | N/A | N/A | N/A | N/A |
| Mutal Fund Fees | N/A | N/A | N/A | N/A | N/A |
| ETF Fee | $0 | N/A | $0 commissions | N/A | N/A |
Benefits of using an ECN Broker
So now you know what an ECN is and how it works, but what are the advantages of using this type of broker? We’ve made a handy list to help you out.
Transparency
ECN brokers consolidate market prices from liquidity providers from all across the globe. Because they do this in real-time, traders receive the same prices from the price feed. Traders can use this information to compare data on lot prices.
The broker cannot manipulate prices since the information is disseminated widely. Price and market manipulation is among the largest concerns many traders have about their brokers.
Direct Trading
ECN brokers do not trade directly with traders. They link traders with liquidity providers who offer various positions.
One advantage is that traders can take positions instantly, rather than waiting for their broker to secure that position.
ECN brokers are not involved in either side of a trade, so they have no vested interest in the trader making or losing money.
Tighter Spreads
Because ECN brokers aggregate bid and sell prices from different market participants such as investment banks and hedge funds, they can offer lower bid-ask spreads than other brokers.
As a hub for market players, traders will have access to liquidity providers asking for a range of prices. Some of these spreads will be higher than market standards; others will have lower.
Traders can choose the positions and spread that best suit them from thousands of providers worldwide.
ECN vs Market Maker
Market Maker brokers – also called Dealing Desk brokers – operate oppositely to ECN-type brokers. Instead of decentralizing trade positions, they counter the trade that each trader takes.
Market Makers are liquidity providers. They decide both the bid and sell price that is displayed to traders. The only thing that keeps Market Maker brokers from massively inflating their prices is a highly competitive market.
Market Maker brokers make money on the spread (the difference between the bid and ask price) at either end of the trade and whatever profits they earn during the trade.
Institutions like banks and other large financial institutions are all Market Makers.
Difference Between ECN, STP, and Dealing Desk Broker
ECN and STP brokers are both examples of No Dealing Desk brokers. Essentially, they are not Market Makers and do not provide liquidity to their traders.
ECN brokers link traders through a decentralized network to liquidity providers to execute trades.
Market Maker or Dealing Desk brokers “make” a market for their traders by setting bid and ask prices for instruments. They take the opposite side of each trade and provide liquidity directly to their clients.
STP brokers are another example of No Dealing Desk brokers. They are less common than ECN brokers, but many traders prefer them for secure trades. The differences between ECN and STP brokers may seem small, but they are crucial.
STP – Straight Through Processing – brokers do as their name implies. They pass orders from traders directly to liquidity providers in the market. Unlike ECN brokers, they do not provide traders with a massive list of all compatible liquidity providers in the market.
Using an STP model, traders compete with other traders rather than their brokerage.
Sometimes STP brokers choose to absorb some or all of the liquidity from a trader’s position without passing it on to the interbank market.
How to tell if a broker is a fake ECN broker
Every day, traders are becoming savvier about the unsightly business practices that some Dealing Desk brokers engage in. Because of this, many DD brokers try their best to make it appear that they are ECN brokers.
Some traders using DD brokers have noticed that prices reported in demo accounts vary from those listed on their live accounts. This is a sign that your broker is playing dirty, trying to make their platform more appealing to potential clients.
Firstly, users should read through the client agreement thoroughly. It may seem like a chore, but in the user agreement, the broker should state clearly whether they utilize ECN technology or other No Dealing Desk accounts.
As tempting as it may appear, ECN accounts will not offer fixed spreads. By their nature, ECN brokers have to offer variable spreads as the liquidity providers may change their prices at any time.
Next, see what your broker’s terms are around scalping. We’ll cover exactly what scalping is later in this article, but to put it simply: it’s a trading strategy that relies on trading large volumes over very short timeframes.
Because scalping is carried out in minutes or sometimes even seconds, Dealing Desk brokers tend to disallow this strategy. ECN accounts can execute trades at ultra-high speeds and can facilitate scalping without much issue.
Lastly, it’s best to research your broker extensively. Read as many reviews and articles about your broker before committing your money.
ECN and Scalping
One of the reasons ECN brokers are becoming so popular with day traders is that they allow traders to use the scalping strategy. This term has earned an unfair association with people selling concert tickets at massively inflated prices. Still, it is a perfectly legal and ethical trading strategy that many traders use to maximize profits.
To use scalping as a viable strategy, traders should have access to tools such as live economic news feeds and accurate charting programs. It also requires quite a significant time investment as placing trades at the right time is crucial.
Scalpers trade by taking positions for very short periods. They earn profits by buying and selling securities and taking advantage of minuscule gains between 5 and 20 pips. This relies on the idea that multiple small profits are easier to attain than singular large ones.
ECN brokers facilitate scalping because of their automated execution. Because ECN brokers act as intermediaries between trade parties, they can execute thousands of trade orders every second.
Dealing Desk brokers will not allow scalping because of the calculating power needed to facilitate thousands of short-order trades.
