True ECN vs Standard Account: What to Choose?

Social Trading, or a copy trading system, is currently the most advanced and safe way to earn income from trading, both for the trader and for the investor. Traders from United States are able to trade only with Forex brokers registered with CFTC or NFA in US. Some of the regulated ECN brokers for US are Forex.com, IG and ATC Brokers.

• Any statements about profits or income, expressed or implied, do not represent a guarantee.
• However, it is interesting to note that while MT5 is capable of offering a wider range of markets for trading than MT4, FXTM actually allows trading with more products when using MT4 than MT5.
• An ECN broker does not hold a position in the market, meaning they will never take a position against you.
• The pro account is recommended by FXTM for serious (semi-professional) retail investors, institutional traders, and hedge fund managers.
• Additionally, standard accounts may have restrictions on the types of trading strategies that can be used, while ECN accounts typically do not.

In this situation, the broker acts as the counterparty to any position you have live. As you can see, combinations of NDD, STP and ECN supply the ideal basis for transparent and fair trading. It’s advisable to consider your options and choose a broker with these three standards in mind but avoid using dealing desk brokers where possible. The primary motivation of dealing desk brokers is their profitability ahead of their clients’ welfare. The ECN (Electronic Communications Network) account is an order-matching execution system.

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In this event, FXTM will provide a requote with the market price set by the liquidity providers for which you must explicitly agree to accept before they will complete your order. ECN accounts reduce transaction costs and boost market liquidity, however they can be complicated and lack customer service. Another issue that we need to take into account is that liquidity can dry up from time to time. For example, if you have non-agricultural payroll numbers available, many traders will choose not to be on the market. While your typical network spread could be 0.2 pips in the EUR/USD pair, around the ad you can see something closer to the 15 pips. Actually, that can strongly alter your profitability if you’re not careful.

Also, I recently wrote a large review article on the use of a demo account, and you can read it here. All information on 55brokers.com is only published for general information purposes. We do not present any investment advice or guarantees for the accuracy and reliability of the information. Additionally, no trader has a particular built-in advantage over the other, as they all have equal access to the information. In his role, David works with a team of writers to develop content for the site, this includes planning future content and editing and proofing existing works.

This article will give you an overview of the true ECN vs Standard account. Then demonstrate which one is more competitive.

If you’re ready to start exploring VPS trading with FXTM, contact your dedicated Account Service Manager who will be more than happy to help. We have never seen a broker offer such as range of social tools to engage with customer support. FXTM customer service is also multi-lingual however FXTM doesn’t specify the available languages. They are presented in a series-like way where you start with the basics, move into fundamental and technical analysis, and progress from there.

This means that dealing desk brokers have a conflict of interest with their clients, as their profits come from their client’s losses. Many brokers offer demo accounts for beginners to learn how to use the platforms that they use and to learn how the broker operates. FXTM’s demo account provides traders with virtual money so you can simulate the trades you intend to make with real cash to see what the outcome would be. Forex trading has become increasingly popular in recent years, and with it, the number of different types of trading accounts available has grown as well. One such type of account is an ECN account, which stands for Electronic Communications Network. In this article, we will explore what an ECN account is, how it works, and what advantages it can offer to traders.

ECN Account vs. Standard Account: What’s the Difference and How to Choose

ECN brokers execute by matching client orders and STP brokers execute by passing client orders directly to an external liquidity provider. Execution can be marginally slower than a Dealing Desk broker that fills trades internally. This information helps clients know they have quick trade execution even with the additional step of using liquidity providers to fill trades. The broker buys large positions from liquidity providers and sells them to clients in smaller pieces. Because of this structure, a Dealing Desk broker takes “the other side of the trade” because they hold positions before selling them to clients. They might later hedge positions to be neutral to adverse market moves.

This kind of trading model is why IC Markets are known as an ‘A’ book broker. This is different from a market maker which is a ‘B’ book broker, these types of OTC forex brokers will trade against you as they are your counterparty for each trade. 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.

Brokers By Platforms

The main feature of copy trading that differs from any other system is the easy copying of the positions of any investor you like. ECN is a non-dealing desk bridge with straight-through processing execution that enables execution in a direct connection between the parties via automated network. Where ECN Platform is Broker or Platform that performs its execution and operation via ECN. An ECN broker is usually a No Dealing Desk (NDD) broker, which means that the clients’ orders do not pass through a Dealing Desk, which enables execution in a direct connection between the parties. MetaTrader 5 is an upgrade on MT4, it offers all the features MT4 offers and more. However, it is interesting to note that while MT5 is capable of offering a wider range of markets for trading than MT4, FXTM actually allows trading with more products when using MT4 than MT5.

David also has deep knowledge of the Forex industry and spends substantial time fact-checking the accuracy of the information about the brokers for the website. While the FCA, CySEC, and FSP are tier 1 or tier 2 regulators, the FSC is a tier 3 regulator which means the level of regulation (compared to other major regulators) is much lower. If you are trading from outside the UK or Europe, you will be trading with a broker using FSC.

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The downside of this account is that the spread is more comprehensive than what ECN brokers offer. Once again, holding a position for weeks and days will not alter your profits. However, short-term traders must keep the spread size in mind before they opt for a standard account.