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.

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.

Trading Platform

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.

Slippages

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.

Conclusion

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.

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