Aug 31, 2017

Top 3 Best ECN Forex Brokers With Lowest Spreads


low spread is one of the main criteria of a trader when choosing a broker. Scalpers in particular, which are the most frequent traders need a low cost transaction fee as much as possible, and an ECN broker that offers tight spreads with low commissions is the best option. 


Trading with an ECN Forex Broker is much better compared to Market Maker Brokers because their is a clear conflict of interest when trading with a MM broker. Your profit is their loss, and your loss is their profit. Whereas when you trade with an ECN broker, your orders are routed to their giant liquidity providers like Citi, JP Morgan, Deutsche Bank, Goldman Sachs, Bank of America, HSBC and etc., which results to much tighter spreads due to the strong competition. ECN brokers simply charge a commission for each trade conducted, they don't trade against the client or take the opposite side of the trades. ECN brokers want their clients to profit because that means their clients will be able to trade more, and these brokers will make more commissions from the clients' trades as a result. 

Below is a list of the Top 3 Best ECN Forex Brokers with the lowest spreads.


Global Prime 

Overview of Global Prime

Global Prime FX is an Australian based broker located in Sydney and is currently regulated by the Australian Securities and Investments Commission (ASIC). This broker boasts of it's transparency, top tier customer support, and Prime Broker relationship.

Not the usual broker

Unlike many other retail brokers, Global Prime does not offer deposit bonuses and extremely high leverages. Deposit bonuses have a lot of strings attached to it while very high leverage, on a historical basis, leads to blowing accounts much faster instead of making gains faster.

Trade receipts

Global Prime is one of the rare forex brokers who provides trade receipts to its clients. This receipt shows which liquidity provider filled the clients' orders so they would know who took the opposite side of their trade. This transparency of Global Prime is what makes them one of the best forex brokers.

Global Prime ECN Forex Broker Lowest Spread

Global Prime's average floating spread on major pairs like EUR/USD and USD/JPY is only 0.1 pip and goes to zero during peak hours of the market. They charge $7 per lot on major and cross currency pairs. 

Min Deposit: $500 AUD or equivalent in other currencies

Max Leverage: 1:100



IC Markets 

Overview of IC Markets

IC Markets is a "True ECN Broker" based in Australia and is one of the best brokers out there. IC Markets was founded in 2007 and is currently regulated by the Australian Securities and Investments Commission (ASIC). Their Headquarters is located in Level 6, 309 Kent Street, Sydney. 


IC Markets is one of the few brokers who disclose their liquidity providers. This leads to more trust from the clients since they will know who they're trading with. You can easily find all of their liquidity providers on their homepage. They also don't offer deposit bonuses, typical of a true ECN Broker.

IC Markets True ECN Broker Lowest Spread



IC Markets' average floating spread is 0.1 pip on major pairs and also goes to zero during peak hours. They charge a commission of $7 per lot on majors and crosses.

Min Deposit: $200

Max Leverage: 1:500





Overview of Exness

Exness is based in Saint Vincent and the Grenadines and is currently regulated by the Cyprus Securities and Exchange Commission (CySEC), and Financial Conduct Authority (FCA) in the UK. This broker was founded in 2008 and is now one of the leading forex brokers. They also disclose their liquidity providers which proves that they are also a true ECN just like the two brokers mentioned above.

Exness ECN Forex Broker

Exness' average floating spread on major pairs is 0.3 pips and they only charge $5.90 per lot on both major and cross currency pairs.

Min Deposit: $300

Max Leverage: 1:200



Your forex broker must have these attributes:

- Regulated by financial regulatory authorities
- Offers ECN accounts
- Offers raw spreads from Interbank Foreign Exchange Market
- No minimum Stop Loss and Take Profit levels
- Provides quick withdrawals, not only deposits
- Quick response from customer support representatives


All of the above listed brokers have these attributes so rest assured that your hard earned money is in good hands.


Characteristics of a true ECN Broker:

- No reqoutes of course
- Allows all kind of trading strategies like hedging, news trading, scalping and arbitrage trading
- Does not offer generous bonuses like 100% or 50% deposit bonus because these bonuses have a lot of strings attached to it
- Does not trade against you by hedging your trades or taking the other side of your trades, but instead routes your orders to their liquidity providers
- Charges commission for each trade instead of spread markups
- Offers 5 digit pricing from the decimal point for USD pairs and 3 digit for JPY pairs
True ECN Broker Characteristics
This broker uses 5 decimals accurate pricing on EUR/USD and 3 decimals on USD/JPY, an indication that it is a true ECN broker.


fake ECN Broker
This one does not use accurate decimal pricing. It only has 4 decimals on EUR/USD while 2 decimals only on USD/JPY, an indication that it is not an ECN broker.

- Does not have a minimum Stop Loss and Take Profit level
genuine ecn broker no minimum stop loss and take profit
This broker does not have a minimum Stop Loss or Take Profit

fake ecn broker
This broker has minimum stop loss or take profit of 7 pips for GBP/JPY pair which is an indication that it is not a true ECN broker.
- Offers variable spreads, not fixed spreads or fixed zero spreads             
true ecn broker variable spreads
This broker has variable spreads
forex broker fixed spread
This broker has fixed spreads which is an indication that it is not an ECN broker
forex broker fixed zero spread
This broker offers fixed zero spreads but charges too much commission per trade, equivalent to 2 pips. ECN brokers doesn't offer fixed zero spread because they are not the one who dictate the spreads, it's their liquidity providers.



Advantages of trading with an ECN Broker

- No conflict of interest since ECN Brokers doesn't take the opposite side of your trades but instead routes it to their liquidity providers or matches it with other clients.
- Tighter spreads due to strong competition from several liquidity providers.
- Prices are much more volatile which is good for scalpers.


True ECN Brokers have Market Maker systems too.

As you may have noticed, several ECN Brokers have market maker systems too through their micro accounts and standard accounts, that's because some traders cannot afford the higher minimum deposit for ECN accounts, that's why ECN Brokers offer micro and standard accounts for these traders so they could experience live trading as well with just a small amount of money, this is much better than trading with a pure Market Maker Broker since you can't move your funds to an ECN account with MM brokers.

If you are currently trading with a micro account and you have reached the minimum deposit for an ECN account, then you should open one because you'll get more benefits like tighter spreads with this type of account.

Did you know? 

An ECN Broker is automatically a STP (Straight Through Processing) and NDD (No Dealing Desk) Broker because your orders are executed automatically/electronically and routed directly to the Interbank foreign exchange market without the intervention of a middleman. So an ECN Broker is an STP, and NDD broker at the same time.


If you think that your broker deserves to be included in this list, then put their name in the comments and I will conduct a thorough review.

Do you have questions regarding this article? Just leave them in the comments and I will reply asap.


*Risk Warning: Before you start trading, you should completely understand the risks involved with the currency market and trading leveraged products, and you should be aware of your level of experience.

*This article is not directed to jurisdictions where retail forex trading is restricted.



tags: top forex brokers with lowest spreads, best ecn forex broker for scalpers, tight spread forex broker, ecn brokers for beginners, forex broker spread comparison

26 comments:

  1. i'm currently with ic and yes they have very low spreads. i also try other brokers to compare spreads but ic is my main broker

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  2. I like that you provided a detail about how to identify true ecn brokers. Thanks for this info

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  3. You forgot to mention that the commission is $7 round turn. A trade will cost you $8 then. Have seen it cheaper.

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  4. I agree with IC Markets being included in this list. Its true that very few brokers disclose their liquidity providers, thats why im glad that I transferred to ICM.

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  5. Hello, which broker are you currently using?

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    Replies
    1. I'm currently with IC Markets because they are good for scalping.

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  6. why fxcm not in this list?

    ReplyDelete
    Replies
    1. FXCM is not ECN Broker, they are NDD but not ECN.

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  7. My broker FXPro is not in the list.

    ReplyDelete
    Replies
    1. I actually emailed and asked FXPro if they are an ECN broker and they said they're not. I think they are NDD/Market Maker Broker.

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  8. I didnt care before if its market maker or ecn im trading with, buy now after reading this conflict of interest, it opened my eyes.

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    Replies
    1. It doesn't really matter if your account is less than $1000, but if it's more than that, it's better to trade with an ECN.

      Delete
  9. Hello admin, which of these 3 brokers do you think is the best based on your experience? Waiting for reply.

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    Replies
    1. I can't say which, because all these brokers are excellent. But I can assure you that they are one of the best.

      Delete
  10. Nice info. Now i know what is a true ecn broker.

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  11. hello. Which kind of trader do you think is best? Scalper, intraday trader or long term trader?

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    Replies
    1. I think the best is the long term trader because they are the least stressed type of traders. They just open positions then they leave it for days or weeks, unlike scalpers and intraday traders that have to keep a close watch on their trades.

      Long term traders usually do swing trading and breakout trading.

      Delete
  12. Hello sir. Im newbie, I would like to know what trading strategy and leverage do you use.

    ReplyDelete
    Replies
    1. I'm actually a long term trader now from being a scalper. My strategy is Swing Trading and Breakout Trading, and my leverage setting is just 1:50.

      Delete
  13. My broker is JFD Brokers and they also provide trade reciepts just like global prime. They should be in this list.

    ReplyDelete
    Replies
    1. I checked out JFD Brokers and yes they provide trade reciepts. I'm going to include them in this list soon.

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  14. very good write up.

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  15. eToro is the ultimate forex trading platform for new and full-time traders.

    ReplyDelete
    Replies
    1. eToro is popular, but they are a market maker broker which I don't recommend.

      Delete