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You deal with the broker directly and never have access to any other market participants. An ECN broker is one that uses electronic communications networks to directly connect traders with important players in the FOREX market. These players provide, among other services, access to equity, liquidity and currency. This trading ecn broker type deserves special mention because before the days of safe and instantaneous global communications, ECN trading was not possible.

Tips for Trading with an ECN Account

As you can see in the Stockbroker comparison (which is updated each month), FXTM avg spreads are actually a fair bit higher than 1.3 pips. When choosing between the two, consider your trading goals, experience level, and risk tolerance. Through their dealing desk operation, your NDD broker doesn’t tamper with your order.

Comparison between ECN and Standard Account

There is no priority given to other parties; whatever your transaction sizes, it will be matched asap and at the best or next best price available. We have never seen a broker offer such as range of social tools to engage with https://www.xcritical.com/ customer support. FXTM customer service is also multi-lingual however FXTM doesn’t specify the available languages. The messenger applications you can choose from are one of their most interesting features. They are presented in a series-like way where you start with the basics, move into fundamental and technical analysis, and progress from there.

ECN vs Standard Account: All That You Need to Know

An ECN account matches your orders with market participants like equity and liquidity partners. The broker does not get involved with your transactions, except to put you in contact with third parties in an electronic marketplace. This non-dealing style means the broker only charges you a commission for providing you with access to its network. Overall, we believe you can get better value with other brokers for most of the accounts. The FXTM Pro account offers a lot of flexibility for trading with no limitations on trading strategies such as scalping or hedging, no commissions, and the tightest spreads starting from 0 pips.

The pro account is recommended by FXTM for serious (semi-professional) retail investors, institutional traders, and hedge fund managers. To show ensure only serious traders use this account, a large minimum deposit of $25,000 will be required. Each 1.0 pip you trade costs $10, so you are paying $13 for each lot you trade with FXTM.

It is more expensive than what is offered on an ECN account, but the number of transactions that standard account holders do is less than those of ECN account holders. An ECN (Electronic Communications Network) account is an order-matching execution system that gives the trader direct access to liquidity providers. ECN account works by providing traders with direct access to the interbank market through a network of electronic communications. Selecting the right account type depends on your trading goals and preferences.

• However, traders may miss out on tiny price fluctuations they want to trade.
• FXTM’s spreads start from 0.1 pips which compares favourably with other brokers.
• As a result, with a RAW ECN account, traders can experience some of the lowest trading costs in the industry.
• Since an ECN/STP connects forex traders directly with big banks, hedge funds, and other liquidity providers, there is no dealing desk involved in the process.
• Another advantage of a Standard Account is the lower minimum deposit requirement.
• They widen the spread to earn a profit on the trades they take on from their clients.

ECN pricing includes a lower spread, but a commission is charged on all trades and transactions. This commission can be generally avoided by working with non-ECN brokers, like STP brokers. However, working with an ECN broker will be cheaper if you are a prominent trader in a liquid market. As a result, with a RAW ECN account, traders can experience some of the lowest trading costs in the industry. Dealing desk or DD brokers represent legitimate brokers who make money through spreads, provide liquidity, and have “money makers” licenses. These brokers (the majority of brokers) usually can take the opposite side of traders’ trades.

While acting as the counterparty, the broker deals with the market participants it requires to execute the trade out of sight of the trader. Now if price moves 10 pips up in both the account what will be my P/L. These ECNs account will charge commissions + spreads for every gold trade. For these ECN Gold Trading Account execution technique every trade is matched to another in realtime over the inter bank network – ECN Network. The ECN Gold Account will display different orders from different banks. A simple search through a search engine will reveal which brokers offer ECN trading accounts.

Rates, terms, products and services on third-party websites are subject to change without notice. We may be compensated but this should not be seen as an endorsement or recommendation by TradingBrokers.com, nor shall it bias our broker reviews. Irrelevant to your requirements and preferences, my tips below will help you make the most of trading with an ECN account.

Unlike the webinars which seem to be targeted more towards beginners, the eBooks have content for beginner, intermediate and expert traders. Webinars aren’t always scheduled at a time that suits your time zone, so eBooks are a good self-learning alternative. While this account has FXTM best spreads, With a minimum deposit of $25,000, is not a retail investor account. This account is best for serious professional investors and businesses. FXTM’s ECN zero account is essentially the same as their standard ECN account except with no commissions. However, you pay a premium in the spread, for which FXTM advertises they start from 1.5 pips.

They can offer artificial quotes and orders that are filled on a discretionary basis. Which brokers provide ECN trading accounts can be found with a quick search on a search engine. To choose where to open your trading account, you can next navigate various brokers and possibly have an online interaction with them. Another aspect to consider is the minimum deposit quantity demanded by the stock trading platform you have selected. Most of the time, minimal deposits for typical self-directed accounts are as low as a few dollars or maybe none at all.

Another notable feature of ECN accounts is the potential for lower spreads. However, it’s important to note that ECN accounts may also involve commission-based trading costs, which can vary depending on the broker and the specific ECN account type. Standard Forex accounts typically involve a dealing desk with fixed or variable spreads and do not charge commissions.

The trading strategy is talked about more towards the end of the series of educational videos. Regardless of which version of MetaTrader you use, it is a versatile option as you can use the platform with Windows, Mac, mobile apps such as Android and iOS, and any browser through WebTrader. We have tried our level best in bringing you great content that would help you while you go on with your trading journey.

Your orders are sent directly to a liquidity provider who then routes them to the forex market as a complement to the NDD protocol. STP is a very open procedure, and just like NDD, its goal is to get you the lowest price possible. Situations with set spreads and counterparties don’t necessarily work against the trader. That 2 pip spread might be a desirable option and, occasionally, more competitive during periods of greater volatility. A Standard Gold Trading Account provided by a broker can either have one Gold Trading Liquidity Provider or many liquidity providers. It’s also worth noting that an ECN broker’s fundamental function is to deliver a cost-effective solution for their clients.