REVIEW BEST 5 ECN FOREX BROKER 2018
Over the years working as a professional traders, I have had many discussions, sometimes even arguments, with many traders about the best ECN forex brokers. Ultimately, we all came to a conclusion that perhaps the best ECN forex broker simply does not exist. Maybe there is no such thing as an absolutely perfect ECN broker, because each broker has its own beauty and flaws. We all know that US and UK brokers are more reliable than an other brokers from all over the world. Nevertheless, Cyprus brokers still have the capability of offering more tempting trading conditions, including lower spread, lower margin, better trading platforms and payment systems… In other words, it is implied that each person will have their own top ECN brokers, the one that conforms to their countries as well as their trading strategies. Yet, there are still some basic standards that we believe all brokers should be able to follow. In this article, we will list out the current best 5 ECN forex brokers from all over the world. The basic criteria will also be analyzed so that you can choose the best domestic ECN broker for yourself.
When it comes to choosing good brokers, I rate them based on four main standards including trustworthy, reasonable trading cost, good trading conditions and local supports. Throughout the paper, I will analyze each criteria thoroughly and examine the relevant categories as well.
|Trustworthy||Reasonable trading cost||Trading conditions:||Local supports.|
➤Efficient payment system
➤Developing more trading platforms
➤Better execution speed
➤Lower swap or fee swap.
➤Multiple language services
For ECN traders who often deal with a big amount of trading processes, choosing a reliable broker is undoubtedly the most important process ever. Since the trading sum of money can add up to hundreds of thousands of dollars, some traders are even willing to pay extra trading costs in order to ensure the trading quality.
How do you know which broker is reliable?
Regulations are the first details that should be examined when it comes to choosing the right broker. Most reputable forex brokers take their initiative steps of following regulations in the field to demonstrate their trustworthy to clients. To explain, regulations are profit/non-profit organizations that are responsible for overseeing the honesty of their regulated brokers. This explains why regulations are important since receiving qualified regulations is no simple task. 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
In order to receive a regulation, brokers have to follow all of these standards before getting an approvement from the regulations. Regulations provide traders with a sense of safety, since they acknowledge that the broker’s operations are being supervised by an independent authority so as to ensure the honesty of the broker.
Nevertheless, regulations can inflict even more brutal drawbacks to brokers. It is common knowledge that US/UK ECN brokers tend to confront more disadvantages than other brokers such as:
- High spread and commission
- Higher margin requirements
- Less trading platforms supported
- Less payment methods
It can be seen that these disadvantages all derived from the regulation system. Since regulations can restrict brokers from offering high leverage rate, this result in the decrease of brokers’ trading volume as well as their income. Moreover, brokers are required to pay regulation fee to their agencies because they ought to pursuit insurances for clients’ fund and provide money into the segregated accounts. In other words, somehow regulations are the factors that make brokers gain less income and spend more extra costs. This also explains why brokers ought to charge spread and commission fee. Nevertheless, it is implied that the more regulations a broker has, the more restrictions they have to confront.
Regardless of the fact that US and UK regulations are the most reliable in the profession, they do not have rules to protect traders from other countries in the world. Thereby Asian or African traders have no reasons to pay extra for US/UK regulations in case an unexpected trouble arises since they do not prioritize the benefit of traders from the start.
My professional perspective about regulations
Personally, I do not have the same opinion with the notions: “The more regulations, the better.” Despite the fact that regulation is important since it reflects a broker’s ethical standards, they also come along with costs and limitations. Somehow regulations can be understood as the necessary evil, the one which brings many limitations to brokers but also enhances the public image of them. Therefore, I believe one reliable regulation for each broker is more than enough to prove that they follow reliable financial standards and possess good 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 is obvious that all these famous brokers possess quality regulations such as CySEC, FCA or ASIC. And I would like to emphasize again, one regulation is enough for each broker.
The 5 listed brokers are among the biggest forex brokers in the world, possessing the trading volume as:
- Exness: $400 Billions monthly.
- XM:$300 Billions monthly
- FxPro: $ 100 Billions monthly.
Evidently, the larger the trading volume, the more reliable a broker is. The previous retail brokers have all been around for over 10 years, and yet their scam reports or fraud accusation are still nowhere to be found. The minor complains about these brokers are mostly due to the lack of understanding about the trading systems from beginner traders.
Example: Many traders complained on the Exness trading platform that they experienced Stop Loss when the price had not hit stop loss prices. Nevertheless, this is because 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.
For instance, well-known brokers such as Forex.com, FXCM charges from 1.7 – 2 pip for trading EUR/USD currency pair. Surprisingly, these brokers demand spread rates approximately 50% lower than most US brokers. Meanwhile there are even brokers that require little to none spread charge. As for ECN accounts, the spread for each lot is about 0.0xx pip and ranging from 5 – 7$. In this category, Exness is the best competitor since their spread rate is extremely small, fluctuating from 0.0xx pip to even zero if there is no big news around in the meantime. Moreover, Exness charges the least commission fees comparing to other brokers, only 5$ per lot while ICMarket charges from 6 – 7$ and XM charges 6$.
Efficient payment systems for Asian, African, and Australian traders
Payment system is not a major concern for US, UK brokers since their systems operates very efficient in their countries. As for systems in other countries, especially Asia and Africa, these systems still have a lot of rooms for improvement. For instance, apparently Asian banks will charge approximately 1.7 – 4% of my fund if I were to deposit by my Credit Card. As a matter of fact, it is already a struggle to earn 5% each month, therefore there is no point for me to pay more than a half of my earnings for depositing only. This is why it is utterly important for traders to choose ECN brokers that can offer local payment systems.
Based on my experience of having traded with many brokers from all over the world, I value Exness payment system as the best one of all. They offer a wide range of over 30 different payment methods as well many local payment systems which are charge-free. Moreover, most withdrawal process tend to take up to hours to complete while Exness takes only milliseconds to perform this task. This feature is exclusively remarkable since no other brokers can do the same thing as Exness.
Why Exness Payment system is so fast?
The automatic system is what makes the difference between Exness and other brokers, in which no finance employees can intervene during the process. As long as the traders’ withdrawal information matches their ID, they are able to retrieve their money almost instantly. In addition, Exness also put a relatively large amount of money into systems such as e-wallets, banks, local payment systems… to maintain the smooth flow of automatic transactions.
Good rebates and bonuses
Most expert traders are not particularly fond of rebates or bonuses, since the bonus amount is nothing compared to the vast amount of money they have invested. Instead, they pay attention to the credibility of brokers as well as the spread, swap and payment systems. Nevertheless, this does not mean that rebates and bonuses are not important at all, since they are still relevant to costs. Imagine that a trader receive 5$ rebate per lot, that means he can save up to 0.5 pip spread each lot (if the trade is in XXX/USD currency). Personally, I believe that reliable brokers will manage to come up with attractive rebate and bonus program.
In the list of top 5 brokers, only FXTM and XM offer tempting bonus programs for beginners. The fascinating thing is that they offer a 30$ welcome bonus when traders open an account for the first time and even a 100% bonus when traders deposit. Meanwhile, US/UK brokers rarely offer bonuses since their regulations restrict them to do so.
3. GOOD TRADING CONDITIONS
After conducting a survey within 100 traders with the topic question is: “What type of Forex account do you think is the best for forex trading?”, I found out that 95% of them regard ECN as the best account type. Yet in reality, 80% of them are using Market Market and STP accounts in the meantime.
Obviously, the biggest advantage of ECN account is low cost and transparency. However, the lethal drawback of ECN account is volatility, in which it can be extremely risky for beginners since its quotes are much more volatile than that of STP and MM accounts. Not to mention, ECN slippages are higher and its quotes are not stable as other accounts. Moreover, no-quote errors and gaps are frequently encountered in ECN accounts. To answer these problems, traders have to look into the ECN nature. Since ECN is a wild marker, in which hundreds of thousands of traders are competing and taking advantages of each other. Therefore, choosing to trade with a company (Market Maker) and a bank (STP) is obviously much more stable.
So, that why we need ECN brokers that can provide more stable quotes and less slippages.
Are retail forex brokers’ quotes better?
It is the belief of a few traders that the big forex brokers (which are known as liquidity providers) will provide better quotes. But in reality this is not true since these liquidity providers provide quotes by themselves, which is nowhere near stable while slippages and gaps will occur frequently.
The top 5 brokers mentioned above do not provide quotes by themselves, but they receive quotes from tens liquidity providers at the same time. Moreover, these quotes go through a careful selection process to conforms to the retail clients’ needs. This system is much more better because these brokers can always get quotes from other sources in case one liquidity provider goes down. Not to mention, 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
As you may have known, MT4 and MT5 are currently the 2 most popular trading platforms, but are not absolutely perfect. Sometimes they are not compatible with a few operation system such as Windows Vista, XP. Moreover, these platforms cannot be installed in some phones. This is the reason why some brokers would rather invest in creating their own trading platforms which are compatible to phones. In this category, FxPro and XM takes the lead in developing and improving trading platforms.
Better local support
Most average brokers provide online support in English, while the top brokers will manage to provide live chat, phone and local office support in more than 20 languages. They are always available 24/7 in the most spoken languages such as English, Chinese and Thai.
In the forex trading market, the support from brokers is very important since the nature of this field is undoubtedly complicated. If brokers can support traders by using their local languages, their trading process will operate very efficiently. Out list of top 5 brokers 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 of these forex brokers have office in China, Thailand, Indonesia, Malaysia and Dubai.
For those countries where regional offices are not provided, they support traders by live chat and phone. These are some information about the support offered by the top brokers:
– Exness: 13 languages and 24/7 support (Click here for Exness reviews)
– XM: 30 languages and 24/7 support
– FxPro: 19 languages