We already explained the difference between ECN and Retail Broker in another article. These differences are not minor and you can’t state that a broker is a broker. As you already know, ECN broker are only an option for advanced traders and professionals. Novice traders won’t like ECN broker at all. The following article reviews and compares the most popular ECN broker. We want to help you finding a proper ECN broker for your needs.
One ECN broker that we want to recommend right here is 4XP. You have plenty of different trading accounts to choose from and also the option to create an ECN account. The trading platform and their support is just great. Click here to register at 4XP right away.
We will review these three brokers: 4XP, FXOpen and Instaforex. All three are very large and popular and they all offer ECN trading accounts.
ECN broker are designed for intermediates and professionals and for such, the platform is extremely important. There’s no professional that wants to trade with childish software like eToro or wants to relinquish important functions and tools. Especially for the technical analysis are tools and a good usability very important.
A big part of Forex broker is working on Metatrader platforms nowadays. 4XP, for instance. Functions and advantages should be familiar to our readers. Metatrader also supports a Webtrader now and gives you the opportunity to trade directly in your browser without downloading any software.
FXOpen is also betting on Metatrader. This can’t be a big mistake because most of the advanced traders should be familiar with this platform. Why should you invent the wheel again?
Instaforex is another broker that supports the Metatrader platform. There’s no winner in our test when it comes to software. All three broker trust on Metatrader and don’t do anything wrong here. Metatrader strives to improve their platform and that’s the reason you can expect some important improvements in the near future.
Spread and commission
Especially ECN traders have huge turnovers. The worst thing you can have when having huge turnovers are high fees. There are some ECN brokers that earn commission on every position and don’t take a spread. In contrast, other ECN brokers don’t take any commission but take a small, variable spread. And there are ECN broker with a hybrid scheme and take both spread and a small commission. So it’s not that easy when it comes to spread and commission but our three ECN broker all use a hybrid scheme and take both a small commission and low spreads. But you can’t say what broker is the cheapest in general. It depends on the volume and frequency you’re trading.
FXOpen – FXOpen just lowered their spreads for ECN traders and now it’s even possible to trade with a spread as low as 0 Pips. Usually the spread is about 0,1 Pips and a bit higher. In the mid 2010 the spread was 0,5 and more. So FXOpen made some major improvements. FXOpen calls their spread “Difference” or DAB in short terms. In case you find costs that can’t be identified as spread it may be DAB. FXOpen also takes a commission of $ 2,5 instead of $ 3,5 like it used to. This is also a pretty good improvement.
4XP – 4XP is a bit more expensive than FXOpen and their variable spread starts at 0,3 Pips. Their commission is $ 3,5 and more.
Most traders don’t need a very high leverage but it’s not that bad to have a high leverage available. There are situations where it’s necessary to open this kind of positions but it’s certainly true that a high leverage of 1:1000 is not a must. Let’s take a look at our three ECN brokers and their leverage:
4XP – 1:300. This leverage is on the lower side of the field.
Instaforex – 1:1000. Well, this is a very high leverage that enables traders to trade super agressively.
FXOpen – 1:500. This is pretty much standard but not as aggressive as the maximum leverage at Instaforex.
Deposit and cashout
Making a deposit with one of the reviewed ECN brokers is not that hard. The reason is that all three offer the most important methods for making a deposit or cash out. A wire transfer is the most important method for ECN traders although ewallets like Moneybookers come more and more in question as they make deposits and cashouts on high frequency very easy. Here are the deposit options for our three ECN brokers:
4XP – wire transfer, credit cards (Mastercard, Visa, JCB, American Express, Diners Club), Moneybookers, Neteller, Liberty Reserve
FXOpen – Moneybookers, credit cards (Mastercard, Visa, American Express, JCB), Webmoney, Liberty Reserve, wire transfer, Perfect Money, c-gold, Union Pay
Instaforex – wire transfer, credit cards (Mastercard, Visa), Webmoney, Moneybookers, Liberty Reserve.
All in all, the deposit options are pretty similar although Instaforex offers fewer options than 4XP or FXOpen.
Sometimes, small details matter most. If you’re still unsure what ECN broker to choose, maybe one of the little details helps you making the right decision.
Credit cards – Some broker are offering credit cards. This is nothing else than a branded Visa or Mastercard that is connected with your trader account. This means that you’re able to get cash at every cash terminal or are able to pay with your credit card if possible. The risk is that you mix your trading money with money that is meant for private expenses. But this can be avoided with the right discipline.
Instaforex is the only broker (that we review as ECN broker here) that offers its own credit card.
Customer support – This is very important, but all three broker are doing a great job. Problems are getting resolved through email in a few hours and if you need help more quickly you can use phone or live chat support.
It’s not true anymore that ECN broker offer very low fees for traders and thus a very bad costumer support or none at all. Nowadays the customer support for retail trader is almost the same for ECN traders. And there’s no big difference between 4XP, FXOpen and Instaforex.
Forex education – This is not a must for Forex intermediates but a nice extra. Especially intermediates that want to become a professional trader within the next few months can profit from a solid education like FXOpen offers. FX Instructor is a professional trading academy where you can improve your trading skills with $ 25/month.
Our result is pretty easy: There’s no big difference between the reviewed ECN brokers. FXOpen is slightly better than Instaforex and 4XP. The reason is the transparency. FXOpen describes commissions and fees only a few clicks away from the homepage while you have to search longer at 4XP and Instaforex. That’s why FXOpen is our number one ECN broker and you can start trading with FXOpen right away by clicking on this link.
But you won’t make anything wrong signing up at 4XP. Simply click here to do so. And the same is true for Instaforex where you can register through this link.