Not having a separate commission does not necessarily make them cheaper, because the spread can be wider than with No Dealing Desk brokers that have commissions but narrower spreads. Obviously exotics – especially volatile ones – can have huge spreads on a standard account. Standard forex accounts are generally better for beginners for several reasons (despite the downsides an overview of this type of account). The critical factor in deciding whether to choose a standard or an ECN account is what sort of forex trading strategy you wish to pursue. If you prosper, then you’re more likely to stay in the forex trading industry and remain loyal to the broker who helped launch your success. Therefore, you’ll trade more and provide the broker with more revenue.

  • Unfortunately, some trades are incredibly tight and seem to be reaching the breakeven point.
  • Spreads calculation is usually automated so you don’t have to count it every single time you open a trade.
  • The ECN (Electronic Communications Network) account is an order-matching execution system.
  • It stated that IC Markets offers a commission-free model with spreads starting at 1 pip.

They can offer artificial quotes and orders that are filled on a discretionary basis. Scalpers like raw spreads because the cost for each trade is lower, other scalper like fixed spreads because they want predictability when trading. To ensure you receive the best possible price, IC Markets do not hedge any positions with the liquidity providers. For this reason, while not completely a true ECN broker, IC Markets can offer what they call an ECN pricing model.

Difference between ECN and STP broker

This account differs from a conventional account in that it provides you with the greatest terms your broker has to offer. As a result, you may have zero spreads for the majority of the trading session, but you will have to pay brokerage costs. ECN pricing includes a lower spread, but a commission is charged on all trades and transactions. This commission can be generally avoided by working with non-ECN brokers, like STP brokers. However, working with an ECN broker will be cheaper if you are a prominent trader in a liquid market.

Apart from those precise words, we might still evaluate the basic circumstances of raw spread vs standard account. Generally speaking, the raw spread account has the best trading conditions regarding fees and execution speed. IC Markets’ raw spread accounts is suitable for scalpers compared to other brokers, so it’s certainly a great choice for retail traders. On the other hand, the standard account is recommended for novice traders who just started getting into online trading.

As a result, it allows IC Markets to offer raw spread as low as 0.0 pips. A fixed volume-based commission of $ 3.50 ($7.00 round-turn) is applied per lot to compensate for that. To sum up, IC Markets is a fitting destination for active traders looking for a well-regulated broker. IC Markets is also flexible in terms of base currency and payment methods, signaling their commitment to welcome traders beyond their home country. As of late 2019, IC Markets provided their website in 18 international languages including English, Korean, Indonesian, French, Spanish, Italian, Malay, German, and Chinese. If you are new to Forex, a basic account is the best place to start.

The Standard account hooks you up with the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms. They’re user-friendly and packed with tools and indicators to enhance your trading experience. On the other hand, the Raw Spread account takes it a step further and gives you access to cTrader as well. CTrader is known for its advanced simplefx broker review 2020 features and lightning-fast order execution, which can be a game-changer for certain traders. The minimum deposit in IC Markets is in the middle range compared to other ASIC-regulated brokers, as it reaches $200 for every client. When you have the best potential forex conditions the market has to give, you have a raw spread.

This gives you the instrument’s true underlying pricing without any markup. If you’re trading the USD/CAD currency pair and it’s currently trading at 1.3879, you’ll get this price instead of the markup. For example, let’s assume that Nonfarm Payroll Numbers have started coming out.

This factor makes zero-spread accounts better for high-frequency trading and scalping. A simple search through a search engine will reveal which brokers offer ECN trading accounts. 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. You’ve no idea what price you’ll be filled at when you place your order on a standard account, but the broker will try to guarantee the 2-pip spread. The spread is your version of commission or charge to handle the transaction.

ECN vs. Standard Account

An STP broker can route different trades through different counterparties. One trade may go to another STP broker, another trade may go to an ECN broker. Spreads calculation is usually automated so you don’t have to count it every single time you open a trade. The liquidity pool consists of institutional banks, hedge funds, and other liquidity sources (like tier-one brokers) who route your orders to the ECN.

Raw Spread Vs Standard Account

ECN brokers profit from charging a commission per trade and have fewer potential conflicts of interest with their clients than a “market maker” broker. ECN trading is trading through an ECN (electronic communications network) broker. The cost of ECN trading tends to be cheaper above a certain trading volume. So, brokers offer Raw ECN accounts that have direct market access to true liquidity in the interbank market.


We provide a choice of flexible, feature-rich account types, giving you the option to choose a pricing model that best suits you. Obviously you trade with the intention of making some profit, however it is important to appreciate that CFD are risky instruments and using leverage can amplify your losses. 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. This also applies to any leveraged product due to leverage amplifying the risks of trading. IC Markets is the lowest fee forex broker offering a Standard and Raw Spread account.

IC Markets charge a commission for each trade you do rather widen the spread. Currently active as independent trader and educator in financial trading and investment. As soon as the price rises to any level, you can close the position with considerable profit (although you have to make sure the gain will offset the commission fee as well). You’ll be trading in a transparent, fair and anonymous environment, getting equal treatment whatever the size of your account and order, and be dealing in live prices matched in milliseconds. Trading through an ECN broker is advantageous for many reasons, some of which we’ve already covered above. Transparency, fairness, speed of execution, and the lower cost of each trade are just some advantages.

An ECN forex account is a specialised trading account that allows you to trade through an ECN broker. Hey, dude, I just read about cTrader in IC Markets, and I’m really curious about what makes it a good platform to what is ufx forex broker use, especially for ECN pricing. I’ve been using MetaTrader 4 for a while, but I’m interested in exploring other options. I want to know which platform delivers the best features for ECN pricing and ECN features.

ECN Account or Standard Account: Which is Best?

This means that dealing desk brokers have a conflict of interest with their clients, as their profits come from their client’s losses. Raw spread accounts are also known as zero spread accounts or ECN (Electronic Communication Network) accounts. Straight Through Processing (STP), or ECN, execution allows direct trades with the liquidity providers in the market (such as banks, financial institutions, and other traders). The wider fixed spreads that brokers offer include hidden markups; this lack of explicit commissions makes it extremely difficult to work out the trading costs on your trades. On the other hand, you do not need to calculate the commission on each trade.

The EUR/USD pair could offer an extension of something like two pips, and although most of the time it is more expensive than an ECN when it comes to news-related events, it can save you a little trouble. The main reason why using an ECN account can help you is that it offers liquidity across a network. For example, you can see differentials as tight as the equilibrium point. You can sell or buy at the same price, but there is usually some sort of commission involved. Both account types offer a wide range of trading instruments, including forex pairs, indices, commodities, and more. That’s why there are people who prefer low spreads, there are those who choose no commission.