true ECN vs Standard Account What to choose?

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. The FXTM brand encompasses Forextime Limited (Cyprus), Forextime UK Limited (the UK), and Exinity Limited (Mauritius). The FXTM subsidiary you sign with will depend on your country of residence. If you are in the UK for example you will open an account with Forextime UK Limited.

You can then work your way through these brokers and perhaps engage in an online conversation with them to decide where to open your trading account. Although you’re not dealing with an interbank only network, ECN trading provides a close replica of the institutional-level trading model traders at banks and hedge funds will use. The ECN broker charges a commission as a varying spread which could be as low as 0.5 on EUR/USD at times, so paying two pips on each trade if you scalp or day-trade can be expensive.

Which Account Type is Right for You?

In case, you want a position for weeks or days, nothing is going to make much change as there is not much difference in the cost that is involved. Unlike traditional brokerage models that involve intermediaries or market makers, ECN accounts facilitate direct trading between participants in the market. To determine if an account is ECN or offers a zero spread, ecn account vs standard you’ll need to look out for some clues. When it comes to ECN accounts, they usually connect you directly to liquidity providers, like big banks or other traders, which means you get access to their prices and can enjoy tighter spreads. ECN accounts are suitable for active traders and those who employ scalping or high-frequency trading strategies.

Today, multiple ECN brokers provide access to electronic trading networks with streaming quotes from top-tier banks. To really figure out if an account is ECN or has zero spreads, my advice is to dig deeper, my friend. Check out the broker’s website, read the fine print, and see if they explicitly mention being an ECN or offering zero spreads. You can also look for any specific trading conditions or requirements they mention for each account type. Cent accounts can be a great option for beginners who want to dip their toes into trading and gain practical experience without risking a large amount of capital.

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More information about True ECN
The price of this can be a little expensive because of the commissions. It is quite cheaper if you have several in and out positions and also if you are a short term trader. However, it is not as advantageous as for a long term trader as it is for a short term trader as there is no need to worry about the cost of the transaction while opting for a long term one. Choosing an ECN trading account means the order execution will be market execution.

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. Doubling the deposit via 100% bonus available for all traders making their first topping ups is essential from the point of increasing the margin volume.

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The disadvantage, of course, is that if you are a frequent trader you could be paying something like 1.5 pips extra per operation. People don’t pay attention to the cost of execution, which is a long-term killer if you’re not careful. However, if you are more likely to have a position for days or weeks, at this point, neither will make a big difference as there are not many costs involved.

The Wild West days are gone, so really at this point, most traders will discover that they can use an ECN or a standard account and earn money. 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.

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We don’t believe there is much value in using the ECN Zero account, the spreads are quite high, higher than even FXTMs standard spreads. If you get good value with the commissions of the FXTM ECN account then you could consider that account, otherwise, you are better to look at other forex brokers. FXTMs standard account is a market maker style account, this means you will pay no commissions when you trade since your orders are executed using a dealing desk. The ECN trading account is the choice of many retail traders who take a professional attitude to forex trading. If you trade into an ECN on a platform such as MetaTrader’s MT4 through a reputable broker, then you’ve given yourself the best foundation to underpin your progress. This is compared to a standard account where you can trade from a 1 pip spread.

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. For maximum trading flexibility, always opt for the broker that offers the most variable spreads. This is because such a broker can select from its own pool of liquidity providers to get you not only the best bid spread but also the best ask spread. Plus, with Straight Through Processing (STP) execution and lightning-fast speeds ideal for news trading.

ECN Account vs. Standard Account

Initially, opening a forex trading account is a quite simple process these days given the growth of online forex solutions and applications. It requires downloading a trading platform and following a few security steps, such as identity verification, and all can be done online. Typically, this process can take minutes and you are ready to deposit funds and start trading.