Forex brokers that use electronic communications networks (ECN) to give their clients direct access to other participants in the foreign exchange market are known as ECN brokers. The great advantage of using ECN brokers over traditional market makers is the lack of conflict of interest between broker and client, as the client's profits are not the broker's losses. ECN brokers usually offer lower spreads and better execution, and they always allow scalping. ECN brokers are known to be the best forex brokers and are used by most experienced traders.
Below is a list of the best ECN brokers in the world:
1. Pepperstone
2. IC Markets
3. M4 Markets
4. Roboforex
5. FXTM
ECN brokers are the ideal brokers for trading forex. They offer the lowest spreads and usually charge a small commission, because they don't act as an intermediary between market participants and don't have a spread markup. ECN brokers can sometime have spreads as low as 0.00 pips on major currency pairs. The costs of trading with an ECN broker as compared to a market maker are usually lower, because ECN brokers deal with larger customers that trade higher volumes, which allow the broker to charge a lower commission per trade.
In general, the spread plus the commission of an ECN broker are lower than the spread of a market maker.
Another big advantage of ECN brokers is that they don't trade against you, so they have all the reasons to want you to succeed. Their educational materials and webinars are sincere attempts to improve your trading skills, as a better trader who is profitable will generate more commissions for the broker. ECN brokers prefer big successful traders because what they want is long term customers who trade on a regular basis. An ECN broker will not make much money from a trader who loses his deposit rapidly and quits, as compared to a market maker that is very fine with having such clients. Your interests are aligned with those of your ECN brokers, and your success is good for the broker as well.
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