ECN/STP Forex Brokers

About ECN/STP Forex Brokers
Learn how an ECN FX Broker operates

About: - An ECN/STP Forex Broker is a type of Broker that uses an Electronic Communications Network to connect its clients directly to many other participants in the Forex market. Because of this, the clients’ orders are passed directly to the other market participants without any interference from the ECN/STP Forex Broker. Some may consider that a Forex Broker that acts as an ECN/STP is only the middle man or the agent between its clients and the market and as such, there is no any conflict of interest between the Broker and its clients. - The direct market access allows clients who trade in an ECN/STP account to receive tighter spreads than they used to but in return they are forced to pay a commission fee to the Forex Broker. The fee is calculated according to the traded volume of the clients that pass through the ECN environment. - The commissions’ fee is the only source of income from the Forex Brokers that act as an ECN/STP as they tend to offer best bid and best ask towards their clients. This allows clients to believe that the more they trade the more profits the Forex ECN Brokers are making without worrying that they expect from the Brokers to make more on their losses. In addition, the agency role of the Forex Broker allows clients to use many of the trading strategies that may not be accepted by some other Brokers such as scalping, news trading and other. - However, the market execution in an ECN environment does not guarantee that the stop losses will be triggered at the specified rate and there is no negative balance protection. The reason behind this is that all the rates come from the ECN environment and not the Forex Broker directly.

ECN broker is a type of forex broker whose business model operates on passing traders’ orders straight to the liquidity providers. It is often referred to as straight through processing as well.

ECN or electronic communications network are types of mini networks where trading activity takes place. Think of ECN’s as small groups of a circle of friends who trade baseball cards. The buying and selling is usually within this group with the exception of some big buyers and sellers (liquidity providers) who can dip into multiple groups or ECN’s.

As a retail trader your orders are classified as 'sell side' while the liquidity providers are classified as 'buy side' (not to be confused with going long or short/buy or sell).

An ecn broker facilitates trades between the retail trader and the liquidity provider which is the counter party to your trades. Unlike a market maker model where the forex broker fills your orders by taking an opposite position, an ecn broker merely matches your buy/sell orders with that of the liquidity providers. The main benefit of trading with an ecn broker is that there is no conflict of interest. In return for this 'service' the retail trader either pays a commission or a spread mark up, or at times both.

The following comparison table below at Allfxbrokers.com shows you the list of ecn brokers and the trading conditions, starting from minimum deposit, leverage to fees such as spreads and commissions.

If you are looking to trade with an ecn broker, pay attention to whether firstly the minimum deposit requirements matches your trading capital and then look at the fees. It is ideal to choose an ecn broker that charges only a commission or only a spread mark up. Of course, needless to say, cheaper the costs, better it is for the retail trader. Traders should also bear in mind that the minimum deposit is usually higher when trading with an ecn broker, compared to a market maker.

List of Brokers who offer ECN/STP Accounts

Minimum Deposit	Maximum Leverage	Minimum Lot Size	Spread on EURUSD	Commission Fees
$100	1:1000	0.01	0.0


				$4.5 (Round Turn)
				Basic $1.75 per ticket and $0.010 per share, Intermediate $1.50 per ticket and $0.008 per share, Premium $1.25 per ticket and $0.006 per share
				TiBi RAW $6 Per Lot, TiBi VIP $3 Per Lot
50	1:2000	0.01	0.0	$6 round-trip
				NO	order++
$2000	500/1	0.01	0.1 Minimum	$6 Round Turn	order++
$500	1:200	0.01	0.0	ECN - $4.5 / Lot per side, Turbo - $2.5 / Lot per side	order++
$200	Unlimited/1	0.01	0	Zero: 0.05 each side per lot, Raw Spread 3.50 each side per lot	order++
				Stocks and ETFs, US/Europe Commission, per share 0.3% +0.012€ +Per order 1.2$/€. Stocks and ETFs, Asia Commission, per share 0.25% +Per order 10HK$. USA Stock Options + Per contract 1.5$ + Per order 5$. Margin lending per day 0.04931500% SMS notification 0.05€	order++
$5000	100/1	0.05	0.00	$6 per Lot	order++
$/€/£ 500	Flexible up to 30/1 (is set based on the trading instrument)	0.01	0.1 (Starting)	$2 per lot	order++
$5	500/1	0.01		$1 per lot	order++
$200	500/1	0.01	0.1 Average	$7 per lot	order++
	50			$7/Round Lot (3)	order++
					order++
$100	500/1	0.01	0	Professional - $7.5/Lot on FX; Gold $10/Lot ECN, $18/Lot on EUR/USD Zero Fixed Spread	order++
--	-	-	-	€0.06	order++
$5000	500/1	0.01	0.0 pips Minimum	$3 per share on ECN pro account, charged only for opening the trade not closing and $3 per lot per trade on currencies.	order++
$500	300/1	0.1	0.6 (As low as 0.6 Pip)	$15 Commission on futures, $10 Commission on ECN Standard Accounts, $6 Commission on ECN Advanced Accounts	order++
			0.1	$6 round-trip on cTrader, $7 round-trip on other platforms	order++
$10000	1:1000	0.01	From 0.0 pips	Prime - $3.5 per side/lot , ECN - $1 per side/lot	order++
$1	500:1	0.01			order++
	500/			$3.5 per lot	order++
$1000	100/1	0.1	0.0 Minimum	$2.50 Commission (per side) on ILC (Innovative Liquidity Connector) Account	order++
$50	500/1	0.01 lot	0.1 pips Minimum	$1.50 - $3.00 per lot per side	order++
100	500:1	0.01			order++

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