I have had many exchanges as well as arguments with different traders throughout the years working as a professional traders about finding the best ECN forex brokers. Nevertheless, we figured out that maybe the best ECN forex broker does not exist since each broker has its own advantages and disadvantages. To illustrate, despite the fact that US and UK brokers are the most reliable brokers in the field, Cyprus brokers can offer even more tempting trading conditions, including lower spread, lower margin, better trading platforms and payment systems… In other words, I think each person will search for the top ECN brokers which is appropriate according to their countries and trading methods. Still, all brokers should be able to follow some basic standards. Therefore, the current best 5 ECN forex brokers in the world will be listed out. Further analysis of the relevant criteria will be discussed in order for you to choose the best domestic ECN broker for yourself.
Based on my experience, I have four main criteria when it comes to rating a broker including trustworthy, reasonable trading cost, good trading conditions and local supports. Throughout the article, I will analyze each standard thoroughly and also examine the relevant categories.
|Trustworthy||Reasonable trading cost||Trading conditions:||Local supports.|
➤Efficient payment system
➤Developing more trading platforms
➤Better execution speed
➤Lower swap or fee swap.
For ECN traders who are familiar with a huge trading amount frequently, choosing a reliable broker will be the most important process ever. The total amount of trading can reach as much as hundreds of thousands of dollars, therefore some traders are more than happy to pay extra trading costs to ensure the quality of trading.
Which broker is reliable?
Before choosing a broker, a trader must pay attention to its regulations. Transparency of brokers is mostly demonstrated by following regulations. To explain, regulations are profit/non-profit organizations that are responsible for overseeing the honesty of their regulated brokers. Regulations are important since it is very complicated to be qualified enough to receive qualified regulations. Each regulation has their own sets of restrictions that all regulated brokers have to follow, such as:
- Maximum Leverage rate
- Quotes quality
- Minimum operation fund
- Bonus amount
- Segregated accounts establishment to protect clients
- Advertising messages to avoid misunderstanding for traders
To receive a regulation, brokers have to illustrate that they can follow these standards. Regulations provides traders with insurance, since traders know that the broker’s operations are being supervised by an independent authority that enforce the honesty of the broker.
However, regulations can cause even more lethal drawbacks to brokers. Apparently US/UK ECN brokers have the tendency of experiencing more disadvantages than other brokers:
- High spread and commission
- Higher margin requirements
- Less trading platforms supported
- Less payment methods
I figured out these disadvantages are rooted from the regulation system itself. Due to the fact that high leverage are not allowed by regulations, the trading volume and income of brokers might be negatively affected. In addition, brokers must also spend termly fee to their regulation agencies in order to afford insurances for clients’ fund and provide money into segregated accounts. In other words, somehow regulations can make brokers gain less income and spend more extra costs. This is the reason why brokers ought to charge spread and commission fee from traders. Therefore, the more regulations a broker has, the more restrictions they have to confront.
Even though US and UK regulations are reliable, their rules do not allow them to protect traders from different regions in the world. Therefore Asian or African traders should avoid trading with US/UK brokers since whenever an unexpected trouble occur, they are not able to protect traders’ benefits.
My professional perspective about regulations
To be frank, I so not agree with the notions: “The more regulations, the better.” Regulation is obviously important because it illustrates the transparency standards of a broker, yet it also result in more costs and limitations. Regulations can be called as the “necessary evil”, which brings many limitations to brokers but also enforce their public image. Therefore, I personally believe that a broker only need one reliable regulation to prove that their financial standards as well as stable financial status.
Following is the list of regulations each broker has:
|1||Exness.com||CySEC, FCA (UK)|
|2||FxPro.com||CySEC, FCA (UK), DFSA (Dubai), FSB (South Africa).|
|3||XM.com||CySEC, FCA, ASIC|
It can be seen that all these famous brokers are qualified with good regulations such as CySEC, FCA or ASIC. Again, one regulation is enough for each broker.
The 5 listed brokers are among the biggest forex brokers in the world with the trading volume as:
- Exness: $400 Billions monthly.
- XM:$300 Billions monthly
- FxPro: $ 100 Billions monthly.
Obviously, large trading volumes proves that brokers are trustworthy. Those retail brokers above have been worked for over 10 years, yet no scam reports or fraud accusation have been filed against them. Most negative feedback about these brokers are mostly petty ones due to the lack of understanding about their trading systems from new traders.
Example: A few traders complained on the trading platform of Exness that they experienced Stop Loss even though the price had not hit stop loss prices. Nevertheless, the reason is because the default Exness price chart is Bid price, thereby Stop Loss will be Ask or Bid price depend on the trader’s buy or sell positions
2. REASONABLE TRADING COSTS
US brokers tend to charge highest spread and commission.
Forex.com and FXCM are well-known brokers that charge only 1.7 – 2 pip for the EUR/USD currency pair. In fact, the spread rate of these brokers is already 50% lower than that of US broker. Meanwhile there are some brokers that require extremely little spread charge. As for ECN accounts, the spread for each lot is merely 0.0xx pip and costs from 5 to 7$. In this category, I regard Exness as the best one since their spread rate is relatively small, fluctuating from 0.0xx pip to almost zero if there is no big news around during the meantime. In addition, Exness charges the least commission fees comparing to other brokers, only 5$ per lot while ICMarket charges from 6 – 7$ and XM charges 6$.
Reasonable payment systems for Asia, Africa, and Australia.
US, UK brokers rarely have to worry about payment systems since these systems operates efficiently in their countries. However in other countries, especially Asia and Africa, these payment systems still need a lot of improvement. For instance, apparently Asian banks will charge 1.7 – 4% of my fund if I use my Credit Card to deposit. To be honest, it is already a struggle for a trader to earn 5% each month, therefore there is no point for me to pay more than a half of my earnings to these banks just for a deposit. This is why it is extremely important for traders to find ECN brokers that offer local payment systems.
Based on my observation, I value Exness payment system as the best one of all brokers. They offer an extension of 30 different payment methods and many free local payment systems. Moreover, withdrawal process usually takes up to hours to complete while it is only milliseconds for Exness to perform this task. This feature is perhaps unique since no other brokers can perform the same thing as Exness.
Why is Exness Payment system so fast?
It is the automatic system determines the difference between Exness and other brokers. The system ensure that the traders’ withdrawal information matches their ID before starting the trading process right after that. In addition, Exness also frequently charge money into systems such as e-wallets, banks, local payment systems… to keep the flow of automatic transactions.
Good rebates and bonuses
Rebates or bonuses are not taken into account by professional traders, since the bonus amount is pretty small compared to the large amount of money they invest in the forex market. On the other hand, what they concern is the credibility of brokers as well as the spread, swap and payment systems. Nevertheless, rebates and bonuses are still worth noticing since they are relevant to costs. Provided that a trader can receive as much as 5$ rebate per lot, in the future he can save up to 0.5 pip spread each lot (if the trade is in XXX/USD currency). Personally, I think that reliable brokers will be able to come up with attractive rebates and bonus programs for new brokers.
Among the list of top 5 brokers, FXTM and XM are the ones that offer good bonus programs for beginners. A 30$ welcome bonus is rewarded when traders open an account for the first time and a 100% bonus when they deposit. Meanwhile, US/UK brokers rarely offer bonuses since it might break regulations if they do so.
3. GOOD TRADING CONDITIONS
I have conducted a survey among 100 traders with the topic question as: “What type of Forex account do you think is the best for forex trading?”, and finally figured out that 95% of contestants rate ECN as the best account type yet 80% of them are using Market Market and STP accounts.
ECN account is well-known for its low cost and transparency rate. Nevertheless, the biggest disadvantage of ECN account is volatility, in which new traders are more likely to be at stake since its quotes are much more volatile than STP and MM accounts. Not to mention, ECN slippages are higher and its quotes are quite unstable comparing to other accounts. In addition, no-quote errors and gaps are frequently encountered when using in ECN accounts. The reason behind this is that ECN is a complex marker itself, in which hundreds of thousands of traders are trying to take advantages of each other. Therefore, deciding to trade with a company (Market Maker) and a bank (STP) is obviously much more stable.
Are retail forex brokers’ quotes better?
Some traders think that liquidity providers are able to provide better quotes. But is proved to be wrong since these agencies only provide quotes by themselves, in which slippages and gaps will occur frequently.
The 5 brokers we listed sort quotes from tens different liquidity providers simultaneously instead of providing quotes by themselves. Moreover, these quotes must go through a careful selection process to match to the retail clients’ needs. This system is much more reasonable since there backup quotes from other sources are always available in case problems occur to liquidity provider. Moreover, these well-known brokers only accept quotes from the top liquidity providers.
Here are the top 3 Best ECN quote brokers
(Better quotes mean there are less slippages, gap, and no-quote problems.)
Better trading platforms
Apparently, MT4 and MT5 is known as the 2 most well-known trading platforms, despite the fact that they are not absolutely perfect. Sometimes these platforms do not match the operation systems such as Windows Vista, XP cannot be installed in some phones. This is the reason why some brokers would rather spend their money to creating trading platforms that are compatible to their own phones. In this criterion, FxPro and XM take the leading in developing and improving trading platforms.
Better local support
Even though English is the major language being used when it comes to support,top brokers try to provide live chat, phone and local office support in more different languages. These brokers always provide 24/7 support along with the most spoken languages such as English, Chinese and Thai.
Brokers’ support is extremely important in the forex market since this profession is extremely complex. By using local languages to support brokers, the flow of their trading processes will runs smoothly and efficiently. The top 5 brokers in our list mainly work in Asia and Africa, where the biggest forex markets are located such as China, Thailand, Indonesia, South Africa, Malaysia, Vietnam, Iran, Russia, Arabic.
Most local offices of these brokers are located in China, Thailand, Indonesia, Malaysia and Dubai. For those countries where regional support are not available, live chat and phone are provided. These are some information about their support services::
– Exness: 13 languages and 24/7 support (Click here for Exness reviews)
– XM: 30 languages and 24/7 support
– FxPro: 19 languages