Best ECN Brokers; True Top 5 Picks
The majority of people who enter the online trading world are keen to find a reliable broker that connects them to the market with the most integrity and trust. Depositing funds into a trading account can be quite intimidating if you do not trust the broker and knows whether it is on your side. Throughout the years, online brokers have been accused of manipulating their clients while trading against them.
That has lead to new ways in which online brokers connect clients directly to the markets. Electronic Communication Network (ECN) is a technology that acts as a bridge between the traders and liquidity providers and is often most suitable for traders who are looking for high-speed execution and a transparent trading environment.
This guide will give you an indicator of the best ECN broker as of 2020. We’ll help you understand more about the ECN technology, what you should be looking for when choosing an ECN broker and include the top 5 ECN brokers in the market.
Best ECN Brokers in 2020
An ECN Broker is a type of broker that uses an Electronic Communications Network technology to connect its traders directly with other participants in the market through liquidity providers. ECN technology has significant advantages for financial traders, with the most notable of them is the notion of removing the conflict of interest between a trader and the broker.
There are few brokers offering access to an ECN account. Here are our top picks for the best ECN brokers in 2020.
2. CryptoRocket - A True ECN/STP Broker
CryptoRocket is a relatively new forex and CFD broker offering online trading services through the ECN model. The broker was founded in 2019 with the possibility to trade a variety of tradable assets anonymously. CryptoRocket also offers some unique features such as high leverage of up to 1:500, fast lightning withdrawals, and STP/ECN execution model.
When it comes to ECN trading services, CryptoRocket certainly is one of the first brokers to take into consideration. Although the range of assets is not as large as provided by other brokers, CryptoRocket offers a solid selection of currency pairs, stocks, commodities, and cryptocurrencies. CryptoRocks applies STP/ECN execution model, meaning the broker operates a no-dealing desk execution, which removes a potential conflict of interest. Furthermore, the broker enables users to trade on institutional grade liquidity, meaning it connects traders to institutional grade liquidity from major global investment banks, which ultimately allows users to get the best rates with tight spreads.
One important thing to note about CryptoRocket is that the broker focuses on crypto trading, offering users a vast array of cryptocurrency pairs to trade, its own cryptocurrency wallet, a distributed ledger, and extremely low fees.
- CryptoRocket offers an extensive range of cryptocurrency pairs
- The broker offers a leverage ratio of up to 500:1
- Offers users the fast lightning withdrawals
- A narrow selection of products as compared to other brokers
- CryptoRocket is currently unavailable in the United States
3. Admiral Markets – Trues ECN Broker with physical offices (Leverage 1:500)
Established in 2001, Admiral Markets is an established stock, Forex, and CFD brokerage that operates a True ECN account. While it only maintains an active presence in Europe and Latin America, it has earned the reputation of the trading platform with the largest number of branches. Unlike most other CFD and True ECN Brokerages that will only operate and advance customer support online, Admiral Markets has established numerous offices around the world.
It also maintains an impressive number (5,000+) of supported financial instruments that include cryptocurrencies, commodities, shares, ETFs, currencies, indices, and bonds – all of which are traded in the form of CFDs. Other factors that endear Admiral Markets to its clients include the provision of attractive leverages of up to 1:500, a highly advanced trading platform, access to educational and research resources, as well as its support for conventional trading platforms like MT4 and the MT5 platforms.
The Admiral Markets ECN account is also quite accessible to the average retail trader. The spreads here are highly competitive, the minimum trade size is set at 0.1 lots, and it also has some of the fastest execution speeds.
- Excellent customer support available online and offline in over 22 languages
- Supports a wide range of deposit and withdrawal options
- The broker is highly regulated in several top tier jurisdictions including the U.K., Cyprus, Estonia, and Australia.
- Their CFD accounts cover multiple types of financial securities allowing for investment diversification.
- It is not available to U.S. Traders.
- One may consider the ECN broker’s trading fees to be quite prohibitive.
4. OANDA – U.S. regulated ECN broker with an attractive initial deposit (leverage 1:50)
Started in 1996 and headquartered in the United States, OANDA is one of the few U.S-Based True ECN brokerages. It also features one of the most advanced trading platforms yet maintains the friendliest terms of registration. For instance, the minimum initial deposit is $1, doesn’t charge trade commissions, allows scalping, and has some of the most competitive variable spreads.
U.S. traders also get access to maximum leverages of up to 1:50, premium risk management tools (including the trailing stop, stop-loss order, negative balance protection), as well as 100+ popular and exotic currency pairs. OANDA trading accounts are accessible through the desktop and mobile devices using the MT4 and fxTrader platforms.
- OANDA offers a multitude of educational content as well as a free demo account
- Has one of the fastest order execution speeds – at less than one millisecond
- OANDA is a highly regulated broker licensed to operate in the U.S., U.K., Cyprus, and Australia
- The broker has a low minimum initial deposit.
- OANDA maintains a relatively sluggish customer support
- OANDA has limited user interface customization options
5. EagleFX - High Leveraged ECN Broker
Founded in 2018, EagleFX is one of the new brokers which are having great success since its establishment. The broker focuses on providing zero conflict of interest by directing clients' orders to top liquidity providers. Regarding its execution model, EagleFX is a true ECN broker offering deep liquidity and a high leverage ratio of up to 500:1. That’s a huge advantage if you are looking for a broker that allows you to trade with low margin requirement.
EagleFX has developed an innovative trading platform where traders can get access to lightning-fast trading and funding their accounts with bitcoin and other digital assets. Moreover, the broker offers a selection of 32 digital coins, the MetaTrader4, and the Bitcoin Cold Storage, a tool that was specially designed to keep clients' funds safe. If you’re planning to invest in cryptocurrencies, EagleFX is a great choice as the EagleFX's team has created a friendly platform for bitcoin users and cryptocurrency trading.
On the negative side, EagleFX is not yet regulated by top financial authorities and offers a limited selection of products.
- EagleFX maintains a low minimum deposit requirement of $10
- The broker offers a high leverage ratio of up to 1:500
- EagleFX is a true ECN broker
- Limited selection of products
- EagleFX is not a regulated broker
What Should You Look for in an ECN Broker?
Competitive Spreads and Fees
ECN brokers charge a fixed commission fee for every trade you make in addition to buy and sell spread. The spread via ECN brokers is zero or very low, which makes these brokers the perfect place for scalping or day trading. Eventually, ECN systems are more expensive as compared to traditional execution systems as you get charged an extra fee for every executed lot.
You must remember that by using electronic communication networks (ECNs) you get direct access to top liquidity providers that unlike market maker brokers have no interest to trade against you. A true ECN broker usually offers floating (variable) spreads, and a fixed commission that ranges between $0-$8 per lot.
ECN is a complicated network, hence, it requires a trading platform with solid servers and a fast communication network. A reputable ECN broker must have a good trading platform, whether it is a desktop or web-browser platform.
Desktop trading platforms are commonly used by active traders that are in need of high-speed execution. For that reason, you might want to consider choosing a broker that offers a desktop-based trading platform. If you scalp or day trade, you are probably looking for a high-speed execution trading platform with minimum errors.
Having said that, if you are not an active trader that applies scalping/day trading techniques, a web-based trading platform can do the work for you. Furthermore, a web-based trading platform does not require installation and is much more convenient to handle. The ECN brokers provided on the list above support desktop as well as web-based trading platforms.
Selection of Assets
Another factor to consider when choosing an ECN broker is the range of assets provided by the broker. Most ECN brokers offer basic asset classes that include currency pairs, indices, and commodities. However, some ECN brokers give you access to exotic stocks, ETFs and cryptocurrencies. That’s an important factor if you wish to diversify your portfolio and trade on different instruments.
Among the choices above, Forex.com offers a huge selection of more than 8,000 financial instruments across various markets.
Slippage occurs when you insert an order to the market but while waiting for the broker to execute your order, the price has changed due to slippage. In simple terms, slippage is the gap between the price you entered and the price you received. Obviously, you will want to avoid slippages (although a slippage can be on your side as well) and choose a platform with high-speed execution. If the platform has an excellent execution performance, you are more than likely to not have any slippage errors. The advantage of trading with an ECN broker is that these brokers often have a fast execution network, which in most cases slippage cannot happen. Yet, it’s advisable that you open a demo account and check the platform’s execution before you start trading the real-live markets.
The Absence of Dealing Desk
One of the important things to confirm that you are choosing a true ECN broker is the absence of a dealing desk. A dealing desk broker usually interferes in operating transactions, which is not the case for a true ECN broker that is defined as a no-dealing desk (NDD) broker. A true ECN broker will state its responsibility to provide variable spreads and occasionally discloses its liquidity providers.
ECN brokers are definitely worth considering, whether you are a new or experienced trader looking to enter the online trading market. The fact that these brokers never trade against their clients can give you the peace of mind you are asking, even if you’ll have to pay extra for it. Indeed, ECN brokers charge commissions on top of spreads, making trading a bit more costly but on the other hand, you’ll get tighter spreads, fast execution and never be manipulated by your broker.
What is an ECN Broker?ECN stands for Electronic Communications Network. An ECN broker is a financial firm that uses this type of network in order to execute clients' orders through liquidity providers. The ECN broker provides a transparent marketplace where traders can trade against each other, without any intervention by the broker. An ECN broker simply receives quotes from several providers, in order to offer tighter spreads and provide a fully transparent marketplace.
What is the difference between ECN and STP brokers?Both ECN and STP operate as no-dealing desk brokers, however, the main difference between these two types of brokers is how the brokers deal with the clients' orders. While STP broker sends traders orders' to liquidity providers out of their network, an ECN broker connects traders to liquidity providers within its own network.
What are the benefits of ECN broker?There are some major advantages to trade with ECN brokers that include full transparency, removal of the conflict of interest between the trader and the broker, tighter spreads, complete anonymity, access to top liquidity providers, fast execution, and better trading conditions.
How much money do I need to start trading with an ECN broker?Unlike the equity market, it's quite easy to start trading the CFD market. Most brokers require a low initial deposit requirement, meaning you do not need a large amount of money to trade with an ECN broker. Forex.com for example, one of the biggest CFD brokers in the market, requires a minimum deposit of $50.
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Tom is an experienced financial analyst and a former derivatives day trader specialising in futures, commodities, forex and cryptocurrency. He has a B.A. in Economics and Management and his work has been published on a range of publications, including Yahoo Finance, FXEmpire and NASDAQ.com.