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ECN brokers are attractive because they offer direct market access, removing any conflict of interest with the trader, while oftentimes reducing trading costs by charging a volume-based trading commission on top of a tight spread fee. 

To test these brokers, we opened a live trading account and deposited 1000 Ringgit. As a part of our test, we confirmed their status as ECN brokers by studying their client agreements and reviewing their trading costs to ensure they always have variable spreads with an additional commission. We verified the absence of dealing desks, that we experienced both positive and negative slippage, and no trading restrictions were imposed. These are the best ECN brokers in Malaysia for 2021, according to our testing and our research.

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Best ECN Brokers

Last updated on 22 Apr 2021
Updated 22 Apr 2021
by Editorial Director Chris Cammackby Chris Cammack
Chris Cammack
All Brokers Regulated
All Brokers Regulated
by Trusted Authoritiesby Trusted Authorities
Trusted
1
FXTM
Min. Deposit
USD 10
4.374.37
Min. Spread
0 pips
Fx Pairs
59
EUR/USD Trading Cost per lot
USD 15
Overall Rating
11110.54.37/ 5
AlertAccepts Malaysian Clients. Minimum spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. Islamic account available. MT4 & MT5 platforms supported. Leverage offered can vary depending on country of residence, and your trading knowledge and experience. FXTM is regulated by CySEC, FCA, FSCA, and the FSC.
2
OctaFX
Min. Deposit
USD 50
3.603.60
Min. Spread
0 pips
Fx Pairs
28
EUR/USD Trading Cost per lot
USD 11
Overall Rating
1110.503.60/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 and cTrader platforms supported. OctaFX is regulated by CySEC.
3
Pepperstone
Min. Deposit
USD 5
4.614.61
Min. Spread
0.01 pips
Fx Pairs
80+
EUR/USD Trading Cost per lot
USD 7.90
Overall Rating
11110.54.61/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.09 pips with 7 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and CySEC.
4
Axitrader
Min. Deposit
USD 5
4.344.34
Min. Spread
0 pips
Fx Pairs
80+
EUR/USD Trading Cost per lot
USD 12
Overall Rating
11110.54.34/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. Axi Group is regulated by the FCA, ASIC and the DFSA
5
IronFX
Min. Deposit
USD 50
4.194.19
Min. Spread
0 pips
Fx Pairs
85
EUR/USD Trading Cost per lot
USD 11
Overall Rating
11110.54.19/ 5
AlertAccepts Malaysian Clients. Spreads start at 1.10 pips on the EUR/USD on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. Only MT4 platform supported. IronFX is regulated by CySEC, FCA, ASIC, and the FSCA.
6
HotForex
Min. Deposit
USD 5
4.494.49
Min. Spread
0 pips
Fx Pairs
51
EUR/USD Trading Cost per lot
USD 10
Overall Rating
11110.54.49/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 1 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.
7
FP Markets
Min. Deposit
USD 100
4.234.23
Min. Spread
0 pips
Fx Pairs
60+
EUR/USD Trading Cost per lot
USD 7
Overall Rating
11110.54.23/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. FP Markets is regulated by CySEC and ASIC.
8
Admiral Markets
Min. Deposit
USD 25
4.244.24
Min. Spread
0.10 pips
Fx Pairs
40+
EUR/USD Trading Cost per lot
USD 5
Overall Rating
11110.54.24/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.50 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4, MT5 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by ASIC, CySEC, and the FCA.
9
IC Markets
Min. Deposit
USD 200
4.464.46
Min. Spread
0.10 pips
Fx Pairs
60
EUR/USD Trading Cost per lot
USD 8
Overall Rating
11110.54.46/ 5
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. IC Markets is regulated by CySEC and ASIC.

How to compare ECN brokers

ECN brokers use high-speed networks to find the best pricing available and execute trade orders as quickly as possible. Where a ECN broker gets its market pricing and how fast it executes trades should always be considered alongside other more standard broker metrics. When comparing ECN brokers, always consider:

Trading cost: Traders seek out ECNs brokers because of their low trading costs. Trading costs on ECN accounts are a combination of the spread and a commission. Trading costs for one lot of EUR/USD at ECN brokers will range from 6 USD to 18 USD, depending on the broker’s trading conditions.

Execution quality: A combined metric used to discuss execution speed, slippage and rejection rate, execution quality describes the connection between the broker and the market and will directly impact the level of control a trader has over their positions. A high-grade ECN broker will have fast execution speeds, which leads to less slippage in pricing between when the order is executed and when it is opened, and less order rejection due to unavailable counterparties. Better execution quality will produce fewer unintentional losses.

Execution venues: ECN brokers are never counterparty to client trades. Instead, it uses its network to place trades with third parties. These third parties are called execution venues. The more execution venues an ECN broker has, the more competition there will be for its client’s trades, leading to lower spreads and lower overall trading costs for traders.

Tradable Assets: A good ECN broker will offer clients a larger number of FX Pairs and other CFD assets to trade. Having a limited set of trading assets can negatively affect the traders, as they would miss out on trading opportunities.

Regulation: Regulators monitor the activities of the broker and the trading desk. Unregulated ECN brokers are dangerous as there is no way of telling if they are ECN brokers without making a deposit and opening a trade. Brokers regulated by the FCA (UK), ASIC (Australia) or MAS (Singapore) have better reputations for enforcement and thus ensure their member ECN brokers strictly follow protocols designed to protect clients and their trades.

Trading tools: Leading ECN brokers will offer traders a free Virtual Private Server (VPS) service, guaranteeing high-quality execution around the clock. Other trading tools offered by the best ECN brokers include indicator packages to assist with automated trading and in-platform market analysis tools such as Trading Central or Autochartist.


FXTM – Best ECN Broker in Malaysia

While FXTM is not exclusively an ECN broker, it does offer three ECN accounts with leverage up to 1:1000 on the MT4 and MT5 platforms. The main ECN Account requires a 500 USD deposit and has very low trading costs: The commission of 2 USD per side is one of the lowest in the industry and spreads are competitive with other ECN brokers – starting at 0.1 pips on the EUR/USD. The FXTM Pro Account offers true market spreads but is aimed at professional traders with a minimum deposit of 25,000 USD. Finally, the ECN Zero Account offers commission-free ECN trading with spreads starting at 1.5 pips and a low minimum deposit of 200 USD.

All three ECN accounts are also compatible with FXTM Invest, FXTM’s copy trading system, and can be converted to Islamic accounts easily – though neither FXTM Invest nor Islamic accounts are available on the MT5 platform. FXTM also has a large volume of training material, including videos and webinars to help new traders get started. An additional set of videos covering analysis topics and more detail on chart-reading techniques is available for experienced traders. 

Pros
  • Good for beginners
  • Excellent education
  • Well regulated
  • Low minimum deposit
Cons
  • Expensive withdrawals
AlertAccepts Malaysian Clients. Minimum spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. Islamic account available. MT4 & MT5 platforms supported. Leverage offered can vary depending on country of residence, and your trading knowledge and experience. FXTM is regulated by CySEC, FCA, FSCA, and the FSC.

OctaFX – ECN Broker with the Best Bonus

OctaFX offers ECN trading on an MT4 Account, MT5 Account and cTrader Account. All accounts are market execution and while trading costs are higher than other ECN brokers on the cTrader account, the MT4 and MT5 Accounts offer commission-free trading with spreads as low as 0.6 pips. Commission-free spreads this low are only usually achieved by large market makers like AvaTrade or CMC Markets. Leverage is 500:1 on all three accounts and the minimum deposit is 100 USD. All accounts are available as Islamic (swap-free) accounts and all clients are provided negative balance protection.

OctaFX offers a wide range of bonuses and promotions. A 50% deposit bonus for each deposit is available, as well as demo contests with cash prizes. OctaFX always runs contests for traders with live accounts, prizes include cars, laptops and smartphones. Be aware that all of these bonuses have terms and conditions that need to be met.

Pros
  • Great platform choice
  • Fast and free withdrawals
  • Copy trading accounts
Cons
  • Limited education
  • Restrictive account types
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 and cTrader platforms supported. OctaFX is regulated by CySEC.

Pepperstone – ECN Broker with the Tightest Spreads

A long-established Australian ECN broker, Pepperstone offers MT4, MT5 and cTrader support, ASIC regulation and two simple accounts with ECN execution. The Standard Account is commission-free and the average spread on the EUR/USD is 1.09 pips. The Razor Account charges a commission of 7 AUD round turn but the average spread on the EUR/USD is 0.09 pips – about as close as traders can get to true market prices as possible. Most orders are executed in less than 50 milliseconds, which is ideal for scalpers and clients who run MT4’s expert advisors.

Pepperstone also offers a package of Smart Trader Tools for MT4, a suite of 28 expert advisors and indicators to help improve trade execution and management. In addition, all traders users get access to Autochartist – a powerful pattern recognition plugin that automatically identifies trading opportunities based on price trends.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
    AlertAccepts Malaysian Clients. Average spread EUR/USD 0.09 pips with 7 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and CySEC.

    Axi – Best ECN broker on MT4

    Axi is an ASIC and FCA regulated ECN broker with MT4 support, a wide range of trading tools and simple account options. Axi’s pricing model connects to over 20 liquidity sources, so traders experience fewer slippages and requotes. Spreads on the Pro Account start at 0 pips (with a 7 USD commission).

    The most valuable trading tool that Axi offers for the MT4 platform is the MT4 NexGen plugin. MT4 NexGen offers a sentiment indicator, a correlation trader, a more intuitive terminal window, and an automated trade journal. In addition, traders at Axi have access to AutoChartist, a powerful automated technical analysis tool, and PsyQuation, an AI diagnostic that tracks your trading style and coaches you into more profitable trades. VPS hosting is also available, along with all the trading algos you wish to install to your MT4.

    Pros
    • Low minimum deposit
    • Wide range of assets
    • Well regulated
    • Tight spreads
    Cons
    • Poor customer service
    • Limited demo account
    AlertAccepts Malaysian Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. Axi Group is regulated by the FCA, ASIC and the DFSA

    IronFX – ECN Broker with the Most FX Pairs

    IronFX is a well-regulated global broker with a wide range of account types, a low-cost micro account and over 80 tradeable currency pairs. Offering 6 different account types overall, IronFX has three ECN/STP accounts for traders of all experience levels. 

    The No Commission account offers ECN execution but no commission, but spreads are unusually wide on this account, starting at 1.7 pips. ECN traders will be more interested in the Zero Spread and Absolute Zero accounts, both with spreads starting at 0 pips. All accounts have access to IronFX’s wide range of currency pairs. IronFX is well suited to beginners who want an ECN account on the MT4 platform, and experienced traders looking for exotic pairs and market execution. 

    Pros
    • Well regulated
    • Tight spreads
    • Wide range of assets
    Cons
    • Expensive withdrawals
    AlertAccepts Malaysian Clients. Spreads start at 1.10 pips on the EUR/USD on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. Only MT4 platform supported. IronFX is regulated by CySEC, FCA, ASIC, and the FSCA.

    HotForex – Best ECN with STP Execution

    HotForex is a well-regulated broker with STP execution on all six different accounts on the MT4 platform. The minimum deposit on the Micro Account is low, at 5 USD and spreads start at 1.2 pips on the EUR/USD. For those that prefer ECN trading on MT4, the HotForex Zero Spread Account offers spreads down to 0 pips for a 200 USD minimum deposit. For beginners, HotForex offers unlimited demo versions of all its MT4 account types. 

    HotForex supports MT4 via every method, including the MT4 MultiTerminal, which allows traders to manage multiple MT4 accounts from a single platform. MT4 is also available via web, desktop, and Android and iOS apps. Trading tools available include free Autochartist, VPS services and the HFCopy copy trading service. For MT4 traders who want fast STP execution, it is difficult to recommend another broker.

    Pros
    • Low minimum deposit
    • Tight spreads
    • Well regulated
    • Good range of accounts
    Cons
    • Limited base currencies
    AlertAccepts Malaysian Clients. Average spread EUR/USD 1 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.

    FP Markets – Best ECN Pricing

    While not a pure ECN broker, FP Markets does provide ECN pricing – it streams its pricing directly from its liquidity providers – delivering low spreads but with fast STP execution. With average spreads for EUR/USD at 0.1 pips, GBP/USD at 0.2 pips and USD/JPY at 0.1 pips, FP Markets’ Forex pricing is comparable with Pepperstone and other industry-leading ECN brokers. Commission is also low at 6 USD per lot round turn and the minimum deposit is only 100 USD.

    Winner of the 2020 Best Broker in Australia Award, FP Markets supports MT4 and MT5 on 60+ FX pairs, metals, indices and commodities to trade. And with an Equinix server cluster, most trades are executed in under 40 milliseconds, faster than most ECN brokers. This makes FP Markets an excellent broker for scalping and EA trading on the Metatrader platforms.

    Pros
    • Well regulated
    • Tight spreads
    • Good range of accounts
    • Great customer support
    Cons
    • Expensive withdrawals
    AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. FP Markets is regulated by CySEC and ASIC.

    Admirals – Best ECN Broker for Education

    Admirals Markets offer two ECN accounts on MT4 and MT5. The Zero.MT4 account has spreads from 0 pips with commission varying between 1.8 to 3.0 USD per lot. The cost of trading 1 lot of EUR/USD with the Zero.MT4 account is 5 USD round turn, which is at the lower end of what similar ECN brokers can offer. Admirals’ MetaTrader Supreme edition for both MT4 and MT5 offers improved trading widgets, charts, and indicators when compared to standard MetaTrader. 

    Admirals has an excellent education suite, starting with the free Zero to Hero program where beginners can learn to trade in 20 days. The accompanying webinars Admirals publishes are detailed and helpful, and the overall onboarding experience is welcoming, responsible and genuinely educational. With intermediate and advanced trading education for experienced traders and access to Trading Central delivering trading insights, quality learning material is front and centre for all clients.

    Pros
    • Well regulated
    • Excellent education
    • Wide range of assets
    Cons
    • Expensive withdrawals
    AlertAccepts Malaysian Clients. Average spread EUR/USD 0.50 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4, MT5 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by ASIC, CySEC, and the FCA.

    IC Markets – Best ECN Broker for Beginners

    IC Markets is rare amongst ECN brokers, as it provides a welcoming environment for beginner traders. IC Markets offers an archive of structured course material, detailed independent market analysis, and expert-led webinars. IC Markets also provides excellent 24/7 technical support for the MT4 platform and more general queries.

    IC Markets offers two Raw Spread Accounts and a Standard Account, all with variable spreads, on the MT4 platform. The Raw Spread Accounts charge a small commission of 3.50 USD, but spreads are often down to 0 pips, averaging 0.1 pips on the EUR/USD pair. The Standard Account charges no commission but spreads start at 1 pip. IC Markets pricing relies on 25 different liquidity providers ensuring deep liquidity and some of the lowest spreads in the industry.

    Pros
    • Well regulated
    • Tight spreads
    • Wide range of assets
    • Great platform choice
    Cons
    • High minimum deposit
    • Limited market analysis
    AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. IC Markets is regulated by CySEC and ASIC.

    What is an ECN Broker?

    An ECN broker connects traders to a network of liquidity providers, unlike a Market Maker broker which takes trades on to its own books.

    ECN stands for Electronic Communication Network. An ECN broker sits at the centre of this communication network, like a spider in a web. The other members of the network are liquidity providers like banks, hedge funds and other brokers.

    Every time a client places a trade with an ECN broker it collects prices from the members of this network and presents the trader with the tightest spread it could find to fulfill the volume requirement. Because the liquidity providers in this network are competing for your trade, ECN brokers have very tight spreads which can approach 0 pips.

    ECN Broker Fees & Commission

    ECN brokers do not make any money from the spread. Instead, they will charge a commission, which is their fee for playing matchmaker and finding a counter-party to your trade. Traditional brokers (Market Makers) have wider spreads because they charge their fee in the spread.

    Because ECN brokers only act as an intermediary for a trade, they do not make money when traders lose. In fact, the reverse is true. Over time, a successful trader pays more in commission to an ECN broker, so ECN brokers want their clients to be profitable.

    Conflict of Interest

    Traders may prefer to trade with ECN brokers because there is no conflict of interest between trader and broker. Most market maker brokers will trade against their clients in their role as the counter-party, which means the broker makes money when their clients lose. Since ECN brokers earn money from client trade volume on all instruments traded, ECN brokers make more money when traders profit. 

    Happy Trader

    Slippage and requotes

    ECN Brokers have a higher risk of slippage and requotes. Because ECN brokers rely on external liquidity to match client’s trades, they are not always posted instantly. This can be a problem at times of high volatility – usually after a large event or data release – or at times of low liquidity – such as when most of the markets are closed.  This also means that the market can move past your stop-loss orders, and your losses may exceed your expectations.

    ECN Minimum Deposits

    The last thing to be aware of with ECN brokers is that they generally require a larger minimum deposit – setting up and maintaining an ECN brokerage is an expensive business and traders will be charged more as a result. ECN Brokers require higher minimum deposits.

    Which is the Best ECN Broker?

    Axi is the best ECN broker. With competitive pricing on raw spreads, high liquidity, and fast execution Axi won our Award for Best ECN Broker of 2020. 

    Axi

    Other highlights include a detailed and well-structured course for beginners and leading market analysis for all clients. Axi combines exceptional ECN trading conditions with world-class regulatory oversight. Read our full Axi review here.

    All Brokers with ECN Trading Accounts

    Here is our list of all brokers with ECN trading accounts that we have reviewed – sorted by overall score. 

    Scroll for more detailsPreviousNext
    Overall Rating
    Official Site
    Regulators
    Min. Deposit
    Cost of Trading
    Withdrawal Fee
    No. of FX Pairs
    Compare
    Official Site
    4.61 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 7.90
    From 7 USD / lot - Razor Account
    80+
    Visit Broker >
    Your capital is at risk
    4.46 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 200
    USD 8
    7 USD / lot - True ECN account
    60
    Visit Broker >
    Your capital is at risk
    4.37 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 10
    USD 15
    4 USD / ECN Accounts
    59
    Visit Broker >
    Your capital is at risk
    4.34 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 12
    7 USD / lot - PRO account
    80+
    Visit Broker >
    Your capital is at risk
    4.25 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 7
    6 USD / Lot
    80+
    Visit Broker >
    Your capital is at risk
    4.23 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 50
    USD 10
    Fees Included in Spread
    65
    Visit Broker >
    Your capital is at risk
    4.23 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 100
    USD 7
    6 USD / lot - RAW Accounts
    60+
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    Your capital is at risk
    4.19 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 50
    USD 11
    Zero Accounts
    85
    Visit Broker >
    Your capital is at risk
    4.18 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 12
    7 USD / lot - ThinkZero Account
    36
    Visit Broker >
    Your capital is at risk
    4.14 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 1
    USD 7.80
    $5 per 1 lot
    80
    Visit Broker >
    Your capital is at risk
    4.10 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 200
    USD 10
    6 USD / lot - GoPlus+
    50+
    Visit Broker >
    Your capital is at risk
    4.00 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 6
    6 USD / lot
    60+
    Visit Broker >
    Your capital is at risk
    3.95 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 1
    USD 10
    6 USD / lot - ECN Account
    37
    Visit Broker >
    Your capital is at risk
    3.94 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    GBP 100
    USD 14
    1 USD / lot - Black Account
    68
    Visit Broker >
    Your capital is at risk
    3.93 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    AUD 200
    USD 8
    $7 per 1 lot
    46
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    Your capital is at risk
    3.78 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 200
    USD 14
    On ECN Accounts
    40
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    Your capital is at risk
    3.64 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 500
    USD 24
    Fees Included in Spread
    63
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    Your capital is at risk
    3.60 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 5
    None
    49
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    Your capital is at risk
    3.60 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 50
    USD 11
    6 USD / Lot - cTrader ECN
    28
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    Your capital is at risk
    3.53 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 10
    USD 20
    0,007% / Trade - Zero Account
    33
    Visit Broker >
    Your capital is at risk
    3.45 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 50
    USD 15
    Fees Included in Spread
    50
    Visit Broker >
    Your capital is at risk
    3.42 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 17
    3.2 USD / lot - ECN Accounts
    61
    Visit Broker >
    Your capital is at risk
    3.42 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 200
    USD 8
    Fees Included in Spread
    31
    Visit Broker >
    Your capital is at risk
    3.32 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 150
    USD 30
    Fees Included in Spread
    110
    Visit Broker >
    Your capital is at risk
    3.07 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 100
    USD 20
    None
    28
    Visit Broker >
    Your capital is at risk
    3.04 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 100
    USD 10
    Fees Included in Spread
    60
    Visit Broker >
    Your capital is at risk
    2.85 /5
    Read Review
    Visit Broker >
    Your capital is at risk
    USD 5
    USD 5
    6 USD / lot - ECN Account
    38
    Visit Broker >
    Your capital is at risk

    What is the difference between an ECN Broker and a Market Maker Broker?

    When you place a trade with an ECN broker, the counter-party to your trade will be a liquidity provider from the broker’s network. When you place a trade with a market maker broker, the broker themselves will be the counter-party to your trade. Market Makers create an artificial market for their clients – hence the name.

    Market Makers are also known as dealing desk brokers, as all trades will be filled at the rates set by the broker’s internal dealing desk.  This business model, which means a market maker will always profit from their clients’ losses, generates an inherent conflict of interest which many traders are cautious of.

    Currently, most well-regulated market makers are well regarded in the industry, despite the conflict of interest, and they go to great lengths to ensure their clients are not being unfairly treated. These would be brokers like IG Markets, FxPro, AvaTrade, XM and eToro

    But, Market Maker brokers are not a common choice for experienced Forex traders. Traders are limited to trading with one counter-party who is always trading against you and never on the open market with dynamic spreads.

    However, if you do want instant execution of your trades and you don’t want to pay a commission, a trusted market maker is a good idea.

    How to Identify an ECN Broker?

    There are a few ways to check: ECN brokers will describe their execution model in their legal documents, ECN brokers will always have variable spreads, ECN brokers will not have any trading restrictions (trade size, stop-loss limits, scalping or hedging bans), and traders with an ECN broker will experience both negative and positive slippage.

    Read the Broker Agreement

    All regulated brokers are required by law to publish a Client Agreement and Order Execution Policy stipulating their execution methods. Some ECN brokers will also act as Market Maker in certain circumstances, so this is not an always foolproof method of determining a broker type. See below for an extract from Pepperstone’s execution policy showing that they are an ECN broker.

    Pepperstone Order Execution

    Check that Spreads are Variable

    ECN’s offer tight spreads and charge a commission per trade, and the spreads will also be variable. Fixed spreads are only offered by Market Makers, as they are not taken from a live and dynamic market. Below you can see that Axi publishes its live spreads on its website, these are variable and are taken from their network of liquidity providers.

    Axi Spreads

    Look for Trading Restrictions

    ECN brokers will never restrict your trading methods or trade size. This means that all automated trading, scalping, hedging and large order sizes (anything of 5 lots or over) will all be allowed. If a broker restricts any of these then it is not an ECN broker.

    A good example of a broker with these restrictions is Plus500, a well-known market maker:

    PLus500 Restrictions

    Slippage will be Positive and Negative

    Slippage is the difference between the execution price and the order price at the time the order is submitted for execution. Slippage is a normal aspect of trading with ECN brokers, particularly for orders of a larger size and during times of thin liquidity and/or volatile market conditions.

    Slippage can both positively and negatively impact your trading position. If you find that you are only experiencing negative slippage, then your broker is not using an ECN execution method. Another well known ECN broker is FxPro, which is dedicated to full transparency and always publishes its slippage statistics, see below for its 2019 figures:

    FXPro Slippage

    Summary

    So, while ECN brokers do not have the inherent conflict of interest present with market makers, commission will always be charged on your trades. ECN accounts will also require a higher minimum deposit – putting them out of reach for many beginner traders.

    Are ECN brokers objectively better than market maker? This is not necessarily the case. All brokers we work with are trustworthy and well-regulated and broker choice is always down to personal preference. Whether you go with an ECN broker or a market maker, if you choose one from our list of the best in South Africa you will be in good hands. Interested in knowing more – here is our article on how to compare Forex brokers overall

    FAQs

    What is the difference between an ECN Account and a Standard Account?

    ECN Accounts will have tighter spreads than a Standard Account, but you will have to pay a commission per trade. Standard Accounts will not have any commission, but spreads will be wider.

    How do ECN Brokers Make Money?

    ECN Brokers make money by charging traders a commission per trade. Because they pass pricing on directly from their liquidity providers, they do not charge a fee in the spread.

    Which is better, ECN Brokers or ECN/STP Brokers?

    ECN/STP brokers are better because they will have less slippage and a faster execution speed than a pure ECN broker.

    STP (Straight Through Processing) is the method of the transaction – with STP your order is sent directly to the counterparty through the Financial Information Exchange (FIX) protocol. The FIX protocol decreases trade execution time, reduces slippage, and ensures that traders get the best available pricing.

    The STP protocol can be used by market-maker brokers as well as ECN brokers, and some brokers use a hybrid formula, where they will sometimes be the counterparty, and other times use an external liquidity provider. While this does lead to less slippage, it does mean that some trades will have a conflict of interest.

    In most cases choosing a hybrid broker is the best way to go, as they will give you the most options.

    Forex Risk Disclaimer

    Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

    Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

    Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

    Our Methodology

    Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Malaysian Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

    With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

    In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from a Malaysian perspective.

    All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers

    References

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    Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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