To help you find the best ECN brokers in 2021, we went ahead and did the research for you. First, we looked at the 93 quality online brokers BrokerChooser has reviewed so far, then we checked and compared fees, currency pairs, charting tools and educational materials. We dug deep, so you won't have to. And now, without further ado...
If you are not familiar with ECN order routing, start by reading about what ECN means and what makes the best ECN brokers.
Our top 5 picks for the best ECN brokers in 2021:
- Fusion Markets is the winner, the best ECN broker in 2021. Low trading and non-trading fees. Fast and easy account opening. Great customer service.
- Axi takes second place. Low forex fees and no inactivity fee. No withdrawal and deposit fees. Fully digital account opening.
- TMGM rounds out the top three. Low forex fees. Easy and fast account opening. Free deposit and withdrawal.
- IC Markets is ranked fourth. Low forex fees. Easy and fast account opening. Free deposit and withdrawal.
- Tickmill just made it on the list, taking the number five spot. Low forex fees. Fast and easy account opening. Free deposit and withdrawal.
| Broker | Fee score | |
|---|---|---|
| #1 | Fusion Markets | 4.9 stars |
| #2 | Axi | 4.5 stars |
| #3 | TMGM | 4.6 stars |
| #4 | IC Markets | 4.4 stars |
| #5 | Tickmill | 4.4 stars |
What makes the best ECN brokers? First of all, the broker should provide ECN routing with fair forex fees. An extensive currency pair offer is really important as well. We also rewarded in our scoring if the broker provides other high-quality services, like great customer service, advanced research tools, or easy account opening.
These features may sound obvious and easy to list, but they're hard to figure out. We test brokers based on close to 500 criteria, using real accounts and real money. We know what we are talking about.
If you are a beginner, be careful with forex trading. Forex products are complex and very risky, therefore not suitable for everyone. You can easily lose all your invested money. If you don't have a clue how forex trading works, start with our forex trading 101 guide for beginners.
Not sure which broker to choose? For a tailored recommendation, check out our broker finder tool. Just enter the name of your country and it will show you only the relevant brokers. Want more details? Compare brokers with the help of this detailed comparison table.
And now, let's see the best ECN brokers in 2021 one by one, starting with the winner, Fusion Markets.
#1 Best ECN brokers
Fusion Markets
Fusion Markets is an Australian discount forex broker founded in 2010. It is regulated by the Australian Securities and Investments Commission (ASIC) and the Vanuatu Financial Services Commission (VFSC).
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended for forex traders looking for low fees and a chance to use the metatrader 4 platform
#1 Fusion Markets
Fees
Fusion Markets has low fees when it comes to buying and selling currency pairs.
To have a clear picture of forex fees, we calculated a forex benchmark fee for major currency pairs. This catch-all benchmark includes commissions, spreads and financing costs for all brokers.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| EURUSD benchmark fee | $5.2 | $5.4 | $6.7 | $7.0 | $6.9 |
| GBPUSD benchmark fee | $3.6 | $4.3 | $5.0 | $5.0 | $4.7 |
| AUDUSD benchmark fee | $4.4 | $3.4 | $6.0 | $5.6 | $4.3 |
| EURCHF benchmark fee | $2.2 | $1.9 | $3.9 | $5.4 | $4.8 |
| EURGBP benchmark fee | $5.4 | $4.5 | $7.6 | $7.6 | $7.9 |
All spreads, commissions and financing rates for opening a position, holding for a week, and closing.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#1 Fusion Markets
Markets and products
Fusion Markets gives access to 85 currency pairs.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Currency pairs (#) | 85 | 76 | 62 | 61 | 56 |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Stocks | No | No | No | No | No |
| ETFs | No | No | No | No | No |
| Funds | No | No | No | No | No |
| Bonds | No | No | No | No | No |
| Options | No | No | No | No | No |
| Futures | No | No | No | No | No |
| CFDs | Yes | Yes | Yes | Yes | Yes |
| Crypto | Yes | Yes | Yes | Yes | No |
#1 Fusion Markets
Customer service
Fusion Markets has great customer support that is available on various channels and provides quick answers. However, customer service is not available 24/7.
| Pros | Cons |
|---|---|
| • Phone support | • No 24/7 support |
| • Live chat | |
| • Fast response time |
#1 Fusion Markets
Research
Fusion Markets has great research. From trading ideas to quality news feeds, you can use many research tools. On the negative side, the charting tools, provided by MetaTrader, have an outdated design.
| Pros | Cons |
|---|---|
| • Trading ideas | • Charting with outdated design |
| • Data on asset fundamentals | |
| • Quality news flow |
#1 Fusion Markets
Account opening
Account opening at Fusion Markets is user-friendly and fully digital. It is also very fast, as our test account was verified the same day.
| Pros | Cons |
|---|---|
| • Fast | None |
| • Fully digital | |
| • No minimum deposit |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $100 | $200 | $100 |
| Time to open account | 1 day | 1-3 days | 1 day | 1 day | 1 day |
#1 Fusion Markets
Verdict
Fusion Markets is a great forex broker with very low fees.
It offers low trading and non-trading fees. Account opening is fast and easy, and customer service provides quick and relevant answers.
On the negative side, Fusion Markets has limited educational tools. The product offering covers only forex and some CFDs. Lastly, there is no investor protection provided.
As you can open an account within a day and fees are low, feel free to try Fusion Markets.
#2 Best ECN brokers
Axi
Axi (previously known as AxiTrader) is an Australian forex broker founded in 2007. The new brand "Axi" was launched in 2020.
Axi is regulated by multiple financial authorities worldwide, such as the Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC) and the Dubai Financial Services Authority (DFSA). As such, Axi is considered safe because it is regulated by several top-tier authorities.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended for forex traders familiar with the metatrader 4 platform
#2 Axi
Fees
Axi has low fees when it comes to buying and selling currency pairs.
To have a clear picture of forex fees, we calculated a forex benchmark fee for major currency pairs. This catch-all benchmark includes commissions, spreads and financing costs for all brokers.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| EURUSD benchmark fee | $5.2 | $5.4 | $6.7 | $7.0 | $6.9 |
| GBPUSD benchmark fee | $3.6 | $4.3 | $5.0 | $5.0 | $4.7 |
| AUDUSD benchmark fee | $4.4 | $3.4 | $6.0 | $5.6 | $4.3 |
| EURCHF benchmark fee | $2.2 | $1.9 | $3.9 | $5.4 | $4.8 |
| EURGBP benchmark fee | $5.4 | $4.5 | $7.6 | $7.6 | $7.9 |
All spreads, commissions and financing rates for opening a position, holding for a week, and closing.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#2 Axi
Markets and products
Axi gives access to 76 currency pairs.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Currency pairs (#) | 85 | 76 | 62 | 61 | 56 |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Stocks | No | No | No | No | No |
| ETFs | No | No | No | No | No |
| Funds | No | No | No | No | No |
| Bonds | No | No | No | No | No |
| Options | No | No | No | No | No |
| Futures | No | No | No | No | No |
| CFDs | Yes | Yes | Yes | Yes | Yes |
| Crypto | Yes | Yes | Yes | Yes | No |
#2 Axi
Customer service
Axi is reachable via phone, live chat and email. The answers are mostly relevant and quick. On the other hand, customer service is available only 24/5.
| Pros | Cons |
|---|---|
| • Phone support | • No 24/7 support |
| • Live chat | |
| • Fast response time |
#2 Axi
Research
At Axi, you can use the research tools of the MetaTrader 4 platform, which has no trading ideas or fundamental data. As a plus, there are alternative web tools, like a great economic calendar.
| Pros | Cons |
|---|---|
| • User-friendly | • No trading ideas |
| • Great economic calendar | • No fundamental data available |
#2 Axi
Account opening
Account opening at Axi is user-friendly and fully digital, but it takes a bit longer than at similar online brokers.
| Pros | Cons |
|---|---|
| • Fully digital | • Slower account opening time |
| • No minimum deposit | |
| • Low minimum deposit |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $100 | $200 | $100 |
| Time to open account | 1 day | 1-3 days | 1 day | 1 day | 1 day |
#2 Axi
Verdict
Axi is regulated by multiple authorities globally, like the UK's FCA and ASIC in Australia.
On the plus side, forex fees are low and no inactivity fee is charged. Deposits and withdrawals are also free of charge. Account opening is easy and fully digital, without any minimum deposit, which is also great.
AxiTrader has some drawbacks, though. Its product range is limited to FX and CFDs, and its research tools lack recommendations and fundamental data. In addition, customer support is only 24/5.
Feel free to try Axi, as the trading fees are low and there are no deposit, withdrawal or inactivity fees.
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#3 Best ECN brokers
TMGM
TMGM, or Trademax Global Markets, is an Australia-based global forex broker founded in 2013. The company has several branches and is regulated by the Australian Securities and Investment Commission (ASIC), the Financial Markets Authority (FMA) and the Vanuatu Financial Services Commission (VFSC).
TMGM is considered safe because it is regulated by the top-tier ASIC.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended for forex traders who prefer the metatrader platform
#3 TMGM
Fees
TMGM has low fees when it comes to buying and selling currency pairs.
To have a clear picture of forex fees, we calculated a forex benchmark fee for major currency pairs. This catch-all benchmark includes commissions, spreads and financing costs for all brokers.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| EURUSD benchmark fee | $5.2 | $5.4 | $6.7 | $7.0 | $6.9 |
| GBPUSD benchmark fee | $3.6 | $4.3 | $5.0 | $5.0 | $4.7 |
| AUDUSD benchmark fee | $4.4 | $3.4 | $6.0 | $5.6 | $4.3 |
| EURCHF benchmark fee | $2.2 | $1.9 | $3.9 | $5.4 | $4.8 |
| EURGBP benchmark fee | $5.4 | $4.5 | $7.6 | $7.6 | $7.9 |
All spreads, commissions and financing rates for opening a position, holding for a week, and closing.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#3 TMGM
Markets and products
TMGM gives access to 62 currency pairs.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Currency pairs (#) | 85 | 76 | 62 | 61 | 56 |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Stocks | No | No | No | No | No |
| ETFs | No | No | No | No | No |
| Funds | No | No | No | No | No |
| Bonds | No | No | No | No | No |
| Options | No | No | No | No | No |
| Futures | No | No | No | No | No |
| CFDs | Yes | Yes | Yes | Yes | Yes |
| Crypto | Yes | Yes | Yes | Yes | No |
#3 TMGM
Customer service
TMGM has great email and live chat support. On the negative side, support is not 24/7 and phone support was not very helpful.
| Pros | Cons |
|---|---|
| • Live chat | • No 24/7 support |
| • Fast response time | • Phone support problematic |
| • Relevant answers |
#3 TMGM
Research
TMGM has has user-friendly research tools, from trading ideas to an upgraded newsfeed. As a plus, there is a good economic calendar.
| Pros | Cons |
|---|---|
| • Trading ideas | None |
| • User-friendly | |
| • Good set of analytical tools | |
| • Good economic calendar |
#3 TMGM
Account opening
The account opening process at TMGM is user-friendly and fully digital. It was also very quick, as our account was approved within a day.
| Pros | Cons |
|---|---|
| • Fast | None |
| • Fully digital | |
| • Low minimum deposit |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $100 | $200 | $100 |
| Time to open account | 1 day | 1-3 days | 1 day | 1 day | 1 day |
#3 TMGM
Verdict
TMGM's forex fees are low and account opening is fast and easy. Deposits and withdrawals are free of charge and the process is user-friendly.
On the other hand, the product portfolio covers only forex and CFDs. In addition, clients are not covered by any investor protection.
Feel free to try TMGM, as you will have an account within a day and there is no inactivity fee.
#4 Best ECN brokers
IC Markets
IC Markets is an Australia-based global forex broker that was founded in 2007. The company has several branches and is regulated by the Cyprus Securities and Exchange Commission (CySEC), the Seychelles Financial Supervisory Authority (FSA) and the Australian Securities and Investments Commission (ASIC).
IC Markets is considered safe because it is regulated by the top-tier ASIC.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended for forex and cfd traders who value easy account opening and free deposit/withdrawal options
#4 IC Markets
Fees
IC Markets has low fees when it comes to buying and selling currency pairs.
To have a clear picture of forex fees, we calculated a forex benchmark fee for major currency pairs. This catch-all benchmark includes commissions, spreads and financing costs for all brokers.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| EURUSD benchmark fee | $5.2 | $5.4 | $6.7 | $7.0 | $6.9 |
| GBPUSD benchmark fee | $3.6 | $4.3 | $5.0 | $5.0 | $4.7 |
| AUDUSD benchmark fee | $4.4 | $3.4 | $6.0 | $5.6 | $4.3 |
| EURCHF benchmark fee | $2.2 | $1.9 | $3.9 | $5.4 | $4.8 |
| EURGBP benchmark fee | $5.4 | $4.5 | $7.6 | $7.6 | $7.9 |
All spreads, commissions and financing rates for opening a position, holding for a week, and closing.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#4 IC Markets
Markets and products
IC Markets gives access to 61 currency pairs.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Currency pairs (#) | 85 | 76 | 62 | 61 | 56 |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Stocks | No | No | No | No | No |
| ETFs | No | No | No | No | No |
| Funds | No | No | No | No | No |
| Bonds | No | No | No | No | No |
| Options | No | No | No | No | No |
| Futures | No | No | No | No | No |
| CFDs | Yes | Yes | Yes | Yes | Yes |
| Crypto | Yes | Yes | Yes | Yes | No |
#4 IC Markets
Customer service
IC Markets has great phone and email support. On the negative side, its live chat is low-quality and slow.
| Pros | Cons |
|---|---|
| • Phone support | • Slow and not useful live chat |
| • Live chat | |
| • Fast response time |
#4 IC Markets
Research
IC Markets has great research tools. You can find trading ideas based on technical tools, read quality news, and use good charting tools. However, there are no fundamental data available.
| Pros | Cons |
|---|---|
| • Trading ideas | • No fundamental data available |
| • Quality news flow | |
| • User-friendly |
#4 IC Markets
Account opening
The account opening process at IC Markets is user-friendly and fully digital. It was also very quick, as our account was approved within a day.
| Pros | Cons |
|---|---|
| • Fast | None |
| • Fully digital | |
| • Low minimum deposit |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $100 | $200 | $100 |
| Time to open account | 1 day | 1-3 days | 1 day | 1 day | 1 day |
#4 IC Markets
Verdict
IC Markets is a great forex broker.
Its forex fees are low and opening an account is fast and easy. Deposits and withdrawals are free and the process is user-friendly. The education section of the website is also a plus.
On the other hand, IC Markets offers only forex and CFD products for trading. In addition, live chat support could be better, and non-EU clients are not covered by any investor protection scheme.
Feel free to try IC Markets, as you can have an account within a day and there is no inactivity fee.
#5 Best ECN brokers
Tickmill
Tickmill is a global forex and CFD broker, established in 2014. The company is regulated by several financial authorities globally, including the top-tier Financial Conduct Authority (FCA) in the United Kingdom.
Tickmill is considered safe because it is regulated by the top-tier FCA.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended for forex traders looking for low fees and prefer metatrader 4 platform
#5 Tickmill
Fees
Tickmill has low fees when it comes to buying and selling currency pairs.
To have a clear picture of forex fees, we calculated a forex benchmark fee for major currency pairs. This catch-all benchmark includes commissions, spreads and financing costs for all brokers.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| EURUSD benchmark fee | $5.2 | $5.4 | $6.7 | $7.0 | $6.9 |
| GBPUSD benchmark fee | $3.6 | $4.3 | $5.0 | $5.0 | $4.7 |
| AUDUSD benchmark fee | $4.4 | $3.4 | $6.0 | $5.6 | $4.3 |
| EURCHF benchmark fee | $2.2 | $1.9 | $3.9 | $5.4 | $4.8 |
| EURGBP benchmark fee | $5.4 | $4.5 | $7.6 | $7.6 | $7.9 |
All spreads, commissions and financing rates for opening a position, holding for a week, and closing.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#5 Tickmill
Markets and products
Tickmill gives access to 56 currency pairs.
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Currency pairs (#) | 85 | 76 | 62 | 61 | 56 |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Stocks | No | No | No | No | No |
| ETFs | No | No | No | No | No |
| Funds | No | No | No | No | No |
| Bonds | No | No | No | No | No |
| Options | No | No | No | No | No |
| Futures | No | No | No | No | No |
| CFDs | Yes | Yes | Yes | Yes | Yes |
| Crypto | Yes | Yes | Yes | Yes | No |
#5 Tickmill
Customer service
Tickmill has good customer service. We got relevant and fast answers both on by phone and email, and the live chat agents are also helpful, although response time was slower. On the downside, customer service is only available 24/5.
| Pros | Cons |
|---|---|
| • Live chat | • No 24/7 support |
| • Relevant answers | |
| • Available in local languages |
#5 Tickmill
Research
Tickmill has a wide range of services that can provide trading ideas, such as Autochartist, a chart pattern recognition tool. The analysis available on its blog is great. On the negative side, the news feed is basic and the charting tools have outdated design.
| Pros | Cons |
|---|---|
| • Autochartist integrated | • Poor design of charting tools |
| • Great analysis written by Tickmill experts | • Limited news feed |
| • Superb economic calendar |
#5 Tickmill
Account opening
Tickmill has a fast and easy account opening process, with quick verification. The minimum deposit is low, at just $100.
| Pros | Cons |
|---|---|
| • Fast | None |
| • Fully digital | |
| • Low minimum deposit |
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $100 | $200 | $100 |
| Time to open account | 1 day | 1-3 days | 1 day | 1 day | 1 day |
#5 Tickmill
Verdict
Tickmill is a low-cost forex and CFD broker, regulated by several authorities globally, including the top-tier FCA.
On the plus side, we liked the low forex fees. Account opening is seamless and there are a lot of free deposit/withdrawal options.
Tickmill has some drawbacks though. Its product range is limited to forex, CFDs on some stock indexes and commodities. The trading platforms have outdated design and the news feed is basic.
We recommend Tickmill for those who are interested in CFD and forex trading and like MetaTrader trading platforms. Feel free to test it via the demo account.
Best ECN brokers
What is an ECN and what makes the best ECN brokers?
ECN stands for Electronic Communication Network. An ECN broker is electronically connected to the network of banks, hedge funds and investment corporations which are interconnected in a form of hub.
In forex trading, there are two big groups of order execution categories:
-
No dealing desk: this means that your orders are routed directly to the liquidity providers/interbank market. The broker only passes your trades through, but doesn't intervene. Main examples of this order execution type are ECN (electronic communication network), STP (straight through processing), and their various hybrids.
-
Dealing desk: this means that you interact directly with the broker/dealer and not the liquidity providers/interbank market. The broker can intervene, e.g. by requoting your orders. The main example of this order execution type is market maker.
When you trade forex using ECN, you buy and sell directly from the connected network of banks and financial institutions, and they provide you the liquidity. Many forex traders prefer ECN routing over another popular forex routing model, called market maker.
ECN and market maker structures differ in routing practices, pricing, the possibility for conflict of interest and re-quotes.
| ECN | Market maker | |
|---|---|---|
| Routing practice | Buy and sell orders are routed directly to the network of liquidity providers | You trade with the broker, your orders are executed at the broker |
| Commission | Fixed commission | No commission |
| Spreads | Tight and floating spreads, determined by the market | Fixed spreads, determined by the broker |
| Dealing desk | No dealing desk | Yes, there is a dealing desk |
| Conflict of interest | No potential conflict of interest as an ECN broker does not trade against its clients | Potential conflict of interest as the market maker might take the other side of your positions |
| Requotes* | There are no requotes | There could be requotes |
*A requote is when the broker is not able or willing to execute your order based on the price you entered. If there is a requote, you have the opportunity to either accept or decline the new offered price. Requotes usually happen in fast-moving environments. During requotes, there could be cases when the broker buys the instrument at a cheaper price from you, and sells it at a higher price on the interbank market.
At BrokerChooser, we test online brokers based on close to 500 criteria, using a real account and real money.
The most important factors to consider when selecting the top forex brokers are the fees of forex trading. Besides trading fees, you should also look at the number of available currency pairs. In addition, check if the broker provides great customer service, advanced research tools and easy account opening.
Best ECN brokers
Forex broker fees
Fees, fees, fees. We bet this is always on your mind when you're looking for the best forex broker. It can be complicated. Let's see how we sorted it out.
It is not easy to compare forex broker fees, but we are here to help. Forex brokers can charge commissions, spreads and financing fees.
When it comes to commissions, there are two different fee structures forex brokers normally use:
- All trading fees are included in the spread except the financing rate. Basically, think of it as the broker giving you a wider spread than it gets from the market.
- You get the market spread, but you pay a commission based on the traded amount. This model is usually used by ECN brokers.
The second version is more transparent, but this doesn't always mean it's more expensive.
When you trade forex on leverage and hold your position overnight, a fee will be charged. This is called financing cost. Financing costs change daily, and can add up if you hold your positions for a longer period.
To make your life easier, we calculated what your overall fee would be if you took a $20,000 position, held it for a week then closed it. We used 30:1 leverage, which is the maximum available for major currency pairs at many brokers. You can check these fees by going through brokers one by one.
Best ECN brokers
Forex trading 101
Forex trading looks simple, but it comes with serious risks. Before trading, try to understand the basics and ask yourself: is this for me?
Understanding the forex market
Forex, FX, foreign exchange or currency market: you have probably already heard one of these expressions. They all mean the same: a market where you can exchange currencies or bet on the price movement of currency pairs.
The forex market has several outlets, from currency exchange booths on the street to the currency trading desks of big banks.
For a non-professional trader like you, the easiest and safest way to trade forex is by opening an account at a reliable online broker.
The vast majority of currency transactions are conducted on OTC (over-the-counter) markets. An OTC market is a non-regulated market where you have to assess for yourself how safe your counterparty is. When you travel abroad to an exotic country and you need to exchange some money, you would probably go to a bank branch rather than changing money on the street, right? This is how you minimize your counterparty risk. You have to do the same when you select your online broker for trading forex. You should always choose a reliable broker.
Forex trading is tempting for the following reasons:
-
everybody has an opinion on where currencies are going
-
at first sight, the forex market is relatively easy to understand compared with other markets, like the stock market
-
by using leverage, traders can easily trade with 100 times more money than what they actually have on their trading account and thus multiply their profits (or losses!)
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the market is open 24 hours a day, 5 days a week
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it is the most liquid market in the world, meaning there are lots of transactions every second and you don't have to worry about finding a partner to trade with
Although it looks easy, trading forex can be risky if you don't know what you're doing. By using high leverage carelessly, you can easily lose all your money within a couple of seconds. So you better start off slow, learn and open a demo account first. If you want to learn more, check out our article about the best free trading apps.
Forex market trading hours
The forex market is open from 11:00 PM Sunday until 11:00 PM Friday, London time.
Trading activity is usually at its highest when London and New York are both open.
It is important to note that there is a difference between currency conversion and forex trading.
The end result of a conversion is basically changing one currency into another. Imagine that you receive your salary in euros (EUR), but you want to spend it in British pounds (GBP). In this case, you would exchange euros for pounds.
When you trade currency pairs there is no physical conversion. Imagine that you have an online broker account in US dollars and you want to bet on the price movements in the EURUSD currency pair. In this case, you never convert your dollars to euros. If your bet was correct, the profit from your trade will be booked to your account in US dollars. If you were wrong, the loss will be deducted from your account in dollars as well.
Breaking down forex trading jargon
When you trade forex, you bet on the price change of a currency pair, for example, the EURUSD.
| EURUSD bid price | EURUSD ask price |
|---|---|
| 1.1700 | 1.1705 |
First of all, you need to understand what bid and ask prices mean. Let's take the EURUSD again as an example. The 'bid' is the price at which you can sell the EURUSD, or in other words to go short in it. If the price goes lower, you will generate a profit. The 'ask' price is the opposite. If you want to bet on the price moving up, you can open a trade at the 'ask' price. The mid-price is usually halfway between the two, but this is just a theoretical price that is not used for trading.
The actual bid and ask prices together are called the quote.
A long position is when you bet on the price moving up, while a short position is when you profit from the price going down.
The spread is the difference between the ask and the bid price. In the example above, the spread is 0.0005, which is calculated as 1.1705-1.1700.
The pip is the smallest amount of a currency pair. One pip is equal to 0.0001 for most currency pairs. In case of our example, the spread is 5 pips, or 5 times 0.0001, equalling 0.0005. For some currency pairs like the USDJPY, one pip is 0.01.
Leverage allows you to take bigger positions than the amount of money on your account. Imagine this as something that can multiply your profits, but also your losses. Let's say you have $1,000 on your account and your applied leverage is 100:1. If you open a long position by using all your $1,000, this means you are opening a trade for $1,000*100, or $100,000. If the price drops 1%, you will lose $1,000 (1%*$100,000), that is, all the money on your account. And the price of a currency pair can very easily drop by 1%. In case of EURUSD, this would mean a price decrease from 1.1705 to 1.1588. However, if the price goes up 1%, your winnings are $1,000, meaning you doubled your money. So it is a high risk action - the bigger the leverage, the higher the risk.
A lot is the standard number of units of a forex contract. It is usually 100,000 units of the base currency. The base currency is the first currency in a currency pair. For EURUSD, the base currency is the EUR and one lot is €100,000. A mini lot is 10,000, a micro lot is 1,000 and a nano lot is 100 units of the base currency.
In forex trading, you can encounter different types of contracts: spot, CFD, forward and futures. Spot and CFD contracts are the most commonly traded.
A spot contract is settled two days after the trade. Settlement means that the counterparties are converting their currencies between each other at the price of the trade made two days earlier. Imagine the settlement as a currency conversion made at a money exchange booth on the street. The only difference is that this happens two days after the price was agreed on. However, in most cases, the settlement doesn't actually happen, because spot contracts are rolled over before the settlement. This is done because when you are betting on the direction of a currency pair, you do not actually want to convert money into the other currency, you just want to bet on the price movement. The rollover ensures that the conversion will not happen.
To learn more about forex CFDs and how you can trade them, read our article on CFDs explained as well as some CFD trading tips.
When your position is rolled over, your online broker closes your current spot position and opens a new one. This process is not visible to you, but it has a fee, called the rollover or financing fee. The rollover fee is calculated from the interest rate difference between the two currencies you are trading. In some cases, you may also receive a fee payment from the broker if the interest rates of the currencies you trade are in your favor.
A forward forex contract is a contract made on the OTC market. The specifics of the contract, like the term, the price and the settlement are defined by the counterparties on a case-by-case basis. Let's take as an example a company that needs $100,000 in 30 days to pay its employees, but its revenues are in euros. Since it wants to lock the exact exchange rate it gets in 30 days, it will seal a forward contract with a big bank at a fixed price, let's say at 1.1710. After 30 days, they will exchange the currencies and the company will pay €85,397 ($100,000/1.1710) and receive $100,000 from the bank.
A futures forex contract is traded on a regulated market, for example, on a commodity exchange like the Chicago Mercantile Exchange (CME). When you trade futures, your counterparty is the exchange and the specifics of the contract are predefined by the exchange. When your counterparty is a regulated exchange, you don't need to check your counterparty risk, as this is one of the safest ways of trading. However, the exchange requires a large amount of initial money for trading, so this is not suitable for you if you have only small amounts to invest. For example, if you want to trade one EURUSD futures contract on the CME, you need to have at least $2,000 on your account.
What drives forex market prices?
As we said before, everybody has an opinion about the forex market, because it seems so simple. However, currency markets are among the most unpredictable in the world.
Everything, from monetary policies and government spending to politics and wars, can influence the price of currency pairs. Therefore, it is difficult to predict which way they are going to move.
Nevertheless, economic calendars can help, so at least you know about and can prepare for scheduled events (such as statistical data releases or central bank rate-setting meetings) that could have an impact on the forex market.
Best ECN brokers
Bottom line
You saw the details, now let's zoom out. Here are the best ECN brokers in 2021:
| Fusion Markets | Axi | TMGM | IC Markets | Tickmill | |
|---|---|---|---|---|---|
| Fees score | 4.9 stars | 4.5 stars | 4.6 stars | 4.4 stars | 4.4 stars |
| Markets and products score | 1.9 stars | 1.8 stars | 1.9 stars | 1.8 stars | 1.4 stars |
| Research score | 4.0 stars | 3.0 stars | 4.0 stars | 3.8 stars | 3.3 stars |
| Customer service score | 4.5 stars | 3.9 stars | 4.5 stars | 3.6 stars | 4.0 stars |
| Account opening score | 5.0 stars | 4.4 stars | 5.0 stars | 5.0 stars | 5.0 stars |
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74-89% of retail CFD accounts lose money |
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77% of retail CFD accounts lose money |
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74-89% of retail CFD accounts lose money |
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75% of retail CFD accounts lose money |
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73% of retail CFD accounts lose money |
Fusion Markets is our winner, the best ECN broker in 2021. Low trading and non-trading fees. Fast and easy account opening. Great customer service.
All of the brokers we highlighted are great choices. But watch out, forex trading can be risky. If you think you know enough and are good to go, pick your favorite and take the next step in your trading journey. Let us know what you think in the comments section.
Still unsure? Use our broker finder tool and find the best broker for you.
