ECN Account vs Standard Account

In a standard account, you usually get spread for approximately two pips. It is more expensive than what is offered on an ECN account, but the number of transactions that standard account holders do is less than those of ECN account holders. Dealing desk brokers make money through the spread, the difference between a currency pair’s bid and ask price. They widen the spread to earn a profit on the trades they take on from their clients.

These smaller brokers use STP technology (called ‘bridges’) to connect trades to larger brokers. Compared to MetaTrader, cTrader has a cleaner and more user-friendly design which leads to better navigation while MetaTrader has a more professional look. CTrader tends to be more specialised in forex, so if you are looking to trade a variety of CFDs then MT5 could be your best option.

cTrader RAW Spread Trading Account

As a beginner trader you should practise by using a demo account and then when you are ready to use real money, trade in small amounts with low leverage and trade in micro or minimum lots. You should also make use of the risk management tools such as stop loss orders. IC Markets is the lowest fee forex broker offering a Standard and Raw Spread account. The Standard account has higher spreads but no commissions, while the Raw Spread account has the tightest ECN spreads and a low commission of $3.50 per $100k traded. For example, let’s assume that Nonfarm Payroll Numbers have started coming out. Around this announcement, the general pip can rise from 0.2 pips for the pair to 15 on the network.

They’ll match and execute orders in a seamless simultaneous action. Choosing between No Dealing Desk and Dealing Desk brokers is one factor that traders should weigh against other criteria, such as levels of customer service and regulation. When trading directly from the interbank market, there’s little chance of re-quotes or slippage compared to an STP broker, which relies on other brokers for fills.

What Is an ECN Account?

One of the most basic questions regarding trade is what kind of broker to use. The conclusion will depend on your situation, but let’s look at the main difference between an ECN account and a standard account. ECN means Electronic Communication Network, or what is the same, that computers are connected to each other. It’s a bit of a broad term, but when it comes to business, it can be advantageous. When spreads widen, they will widen for both account types at the same time. There is a separate fixed commission on the ECN vs standard account where the transaction fees are built in to the spread.

Most brokers charge around $7.00 round turn for each standard lot you trade, so unless you hold a lot of equity and plan to trade high volumes, the ECN account can be a costly choice. Standard Accounts
Standard accounts are the one that comes with the fixed spread. The USD or ECN network might offer a spread of something just like the 2 pips. The downside of standard accounts is that you are a frequent trader and you must be paying something like 1.5 pips extra per trade.

The Benefits of Early Morning Forex Trading: Making the Most of Pre-Market Hours

Two commonly offered account types are ECN (Electronic Communication Network) accounts and standard accounts. In this article, we will delve deeper into the ECN accounts and standard accounts. We will analyze their pros and cons, and help you determine which account type may be better suited for your trading style and goals.

• Choosing an ECN trading account means the order execution will be market execution.
• Both have individual features with advantages and disadvantages—let’s examine each option.
• A PAMM account Forex is one of the first ways to invest on the Forex market if you don’t have the knowledge and time to trade.
• An ECN forex account is a specialised trading account that allows you to trade through an ECN broker.
• An ECN account gives you access to these exchanges without having to deal with brokers and their spreads.

Since an ECN/STP connects forex traders directly with big banks, hedge funds, and other liquidity providers, there is no dealing desk involved in the process. It is this element that distinguishes ECN accounts from standard accounts used by market-maker brokers. It’s important to note that ECN accounts are different from standard trading accounts, which typically operate on a dealing desk execution model. Standard accounts typically offer wider spreads and less transparency, as trades are executed through a middleman. Additionally, standard accounts may have restrictions on the types of trading strategies that can be used, while ECN accounts typically do not.

The verdict: Which account type is more competitive?

It’s likely easier to select a broker with standard commission costs and tight spreads for most retail traders. If you are a retail trader and looking for the lowest spreads FXTM has to offer then this is the account to choose. For a deposit of $500, this account gives you spreads as low as 0.0 pips when using MT4 trading platforms and the same or slightly higher when using MT5. Choosing an ECN trading account means the order execution will be market execution. This means you will always buy and sell at the spread pricing set by the liquidity providers, not by the broker, and will not receive requotes even if slippage occurs.

Remember that the additional cost is one of the main reasons some traders cannot make enough profits. The smoother price fluctuations offered by the Standard account of Dealing Desk brokers can make it easier for traders to place trades, as they can rely on more stable pricing. However, traders may miss out on tiny price fluctuations they want to trade. This is because dealing Desk brokers do not track every small price movement in the underlying market but instead offer prices based on their internal pricing algorithms. It is usually cheaper when you hold short-term positions and do several ins and outs. Many believe they can apply the same to long-term trade, but that seldom works.

Advantages of Forex Trading – Leverage, Liquidity, and Volatility

All the ECN brokers present at least two types of accounts to select from. While trading with the ECN Forex broker, you might draw your attention towards the ECN broker as it comes with institutional-grade STP spreads, as well as zero commission. Let’s understand what the difference is between Standard Accounts and True ECN. The ECN trading account is the choice of many retail traders who take a professional attitude to forex trading.