Best ECN Brokers UK 2024

Instruments	Leverage
Forex	30:1
Shares	5:1
Metals	10:1
Indices	20:1
Commodites	10:1

Platform: Axi supports MT4 only. You can use Axi MT$ on your mobile phone and desktop. There is a WebTrader version also.

Range of CFD trading instruments: Axi offers currency pairs, shares, indices, commodities, and metals as CFDs

Withdrawal methods for UK traders: Traders in the UK can deposit/withdraw funds via credit/debit cards, and e-wallets (Skrill and Neteller).

Support for UK traders: You can reach Axi UK via +44 203 544 9646. You can chat with the broker on WhatsApp too.

What is an ECN Broker?

An ECN broker is a type of broker without a dealing desk. When you place a trade, you are either buying or selling. An ECN broker takes your trades and connects your order to buyers or sellers in the market. Computerized systems are used to connect your orders to buyers or sellers.

These systems also provide current ask and bid prices. They are programmed to show the highest bid prices and lower ask prices. This means you get to buy or sell a currency pair at the best prices available.

Dealing desk brokers are the opposite of ECN brokers. They typically take the opposite side of your trades. This means they sell to you when you place a buy order and vice-versa. If they do not do this, your trades are passed on to a market maker. This can lead to slow trade execution.

With an ECN broker, you get speedy trade executions, favorable spreads, and a flat commission rate.

ECN Broker vs Market Maker — What is the Difference?

A forex broker can be either an ECN or a market maker. The two are different. ECN brokers do not operate a dealing desk. They connect your trades directly to buyers and sellers in the market through computerized systems. These systems provide current and best bid and ask prices. They offer you the highest bid prices and lower ask prices so you buy or sell a currency pair at the best prices available.

Market makers operate a different system entirely. They purchase large positions from a liquidity provider and requote the bid and ask price to traders. Market makers quote these prices intending to make money off the bid-ask spread. Most times, the prices quoted are not favorable to traders.

In addition, Market Makers offer fixed spreads. Unlike ECN brokers, they control the bid and ask prices of trading instruments. So they are able to keep it fixed. ECN brokers give your direct market access (multiple buyers and sellers) via computerized networks so their spreads are variable.

Pros of ECN Brokers

1) There is no conflict of interest. ECN brokers do not make money from your losses. ECN brokers only act as intermediaries. They pass on wholesale prices directly to you without trading against you.

2) Overall low trading fees. ECN brokers connect you directly to the electronic communications network. The bid and ask price is determined by the market independent of your broker. Consequently, you get low spreads but you might still pay a commission which is not that high either.

3) Fast execution speed because of high liquidity. ECN is used by large financial institutions so you have access to premium liquidity. You will not have challenges opening and closing your trades even for exotic currency pairs.

4)Since ECN brokers make money via the size of transactions rather than your losses, they allow all trading methods including scalping.

5) Your trades are routed through liquidity providers so you can place big orders.

Cons of ECN Brokers

1) ECN brokers charge a commission for all of your transactions. These fees usually increase trading costs and affect profits.

2) You need a high minimum deposit for an ECN account. ECN brokers usually require these high deposits which maybe too much for you.

3) ECN offers direct market access (DMA) which has its own advantage. However, this type of access can expose you to high volatility and price swings which can bring losses.

4) Though ECN spreads are tight, they may widen significantly in times of low liquidity that can affect your trade execution.

ECN Broker vs STP Maker — What is the Difference?

ECN and STP brokers are the most common type of CFD brokers. While they both facilitate trades in the Forex market, there are distinct differences between them. As you already know, they connect you to liquidity providers like other banks and other traders.

On the other hand, STP brokers, while also connecting traders to liquidity providers, may use a dealing desk to execute trades. This might lead to conflict of interest because your broker might act as a counterparty. The only edge STP brokers might have over ECN brokers is faster execution speeds.

How to Identify If a Broker is a True ECN

A true ECN broker connects you to the market directly without acting as a middleman. To know if a broker is a true ECN, you should not take the word of the broker for it. A few pointers show that a broker is a true ECN. Here are some of them:

1) Disclosure: A true ECN broker is mandated to state clearly if they are a true ECN. You should find this clear disclosure in the broker’s terms and conditions or the FAQs section. The screenshot below is from Pepperstone’s FAQs page.

2) Variable spreads: A true ECN broker does not offer fixed spreads. This is because price quotes change in the open market regularly so spreads cannot be constant. In addition, true ECN brokers provide the best ask and bid prices per time. Their systems are programmed to constantly update the best prices from their liquidity providers. This is why a true ECN broker cannot offer fixed spreads.

The image below is from IC Market’s website. They offer variable spreads on all of their trading platforms. This is typical of other true ECN brokers. They are always clear on the kind of spreads they offer.

3) No dealing desks: This is a major litmus test for brokers who claim to be true ECN. True ECN brokers have no dealing desk. They do not take opposite sides of your trades or pass them on to a market maker. Again, this has to be clearly stated. Brokers without dealing desks show it clearly.

Here is a snapshot from Pepperstone’s website showing clearly that they operate the NDD model.

4) No stop loss/take profit restriction: True ECN brokers allow any trading style. This means you should be able to place your orders on your terms. If you want to know a true ECN broker, watch out for order distance restrictions. True ECN brokers do have order distance restrictions.

Below is another image on IC Markets’ website (example broker). They stated this in simple terms. You can place your stop loss and take profit orders at any price level.

5) Only negative slippages: Slippage is the difference between the price you placed a trade and the price it got executed. They are a common occurrence and can be positive or negative. If a broker gives you only negative slippage, that broker is not a true ECN. Why?

It is because, for ECN brokers, the system of executing your trades is computerized. The networks are programmed to make sure your trades are not executed at a worst price than your entry price. Due to this, true ECN brokers do not have high percentages of negative slippage. This is a key point you should note.

Some ECN brokers release their slippage statistics to the public. You can check it yourself and see how high traders have negative slippage with these brokers. Here is an example with FXCM UK.

This is FXCM’s data from the year 2022. You can see from the table that the percentage of negative slippage relative to orders placed is about 14%-15%. This is low but it can be lower for some brokers. The lower the negative slippage is, the better.

If your preferred broker does not publish their data publicly, you can speak to their customer support to know more about their slippage data.

6) No lot limitation: True ECN brokers allow you to place as many lots as you can. There is no restriction on lot sizes. If you want to test this, open a demo account with the broker and try to buy more than 6 standard lots of a currency pair. If the order is not filled or rejected, the broker is not a true ECN.

Furthermore, you should be able to trade any currency pair with the lowest lot size. The lowest lot size in forex trading is 0.01. A true ECN broker must allow flexibility in lot size.

This image is from FP Markets website showing their account types. You can see that the execution is ECN and you can trade minimum lot size.

7) No Promos: A true ECN broker will not promise you some bonus or discount for opening an ECN trading account. They make their money off commissions from your trade – whether you win or lose. To avoid brokers that bait with promos, sign up with FCA regulated brokers only. In the UK, it is illegal to use promos and bonus offers to convince traders according to FCA rules.

8) Constant price update: The computerized system in ECN scouts for prices and updates them on their platform every minute. You can test for this by opening a demo account. If prices are not updated every minute (or seconds most times), the broker is not a true ECN.

How Do ECN Brokers Make Money?

Here is how ECN brokers typically generate revenue:

1)Commission: ECN brokers will charge you a commission for each trade executed. This fee is usually a small amount per lot that you trade and can be found on your broker’s website. The commission model ensures that your broker makes money directly from your trades.

2)Spreads: ECN brokers offer tight spreads. This means that the difference between the bid and ask prices can be very low. Though it may be little, your broker will still make some money from the tight spreads.

3)Data Fees: As a retail trader, you will have access to real time market data. However, your broker might offer a premium data service for some traders that need the most recent data within a certain time period. This will come at an extra cost to such traders.

4)Private Server Fees: An ECN broker may offer VPS (Virtual Private Server). This server ensures that you trade with low latency. It also grants you a good connection with trading servers. Hosting your trading on VPS might attract some fees, generating money for your broker.

It’s important to note that the transparency and direct market access provided by ECN brokers align their interests with yours, since they do not profit from your losses. You should carefully review the fee structure of any ECN broker before opening an account.

How We Compared the Best ECN Brokers

1) FCA Regulation: Before choosing an ECN broker, you need to be sure the broker is regulated with the FCA. The safety of your funds is only guaranteed if your broker is regulated. To verify your broker’s regulation, follow the following steps. We will use IC Markets to explain the how.

a) Find your broker’s FCA regulation and FCA reference number. You can find them in the footnote of their website. In IC Markets’ case, they have temporary permission with FCA and it is stated so on their website.

b) Once you find the information on your broker’s website, you must verify that the information is the same on the FCA’s website. So, enter on your browser the link: https://register.fca.org.uk/s/. You should arrive at the picture below. Enter the broker’s name, and select ‘firms’. The illustration is shown below

Click on the search button and select the broker from the list of options that come up. You will find the details you need on the page that follows as shown below.

You can see that the information on both websites (IC Markets’ and FCA’s) show the same details. This is how you verify a broker’s FCA regulation. If the details are not the same, something is wrong somewhere.

Trading with an FCA regulated ECN broker has its own benefit. If your broker becomes insolvent, you will not lose your capital. It will be refunded to you. All forex brokers licensed by the FCA are part of the Financial Services Compensation Scheme. The scheme ensures traders’ money can be refunded up to £85,000 if a broker goes bankrupt.

Do you see why this factor is essential?

Finally, verifying your broker’s regulation helps you spot their clone firms. These are fraudulent firms that try to use similar names with regulated brokers to defraud traders. As you check your broker’s regulation, the FCA also lists these clone firms so you don’t become a victim.

FXCM is one of the best ECN brokers in the UK. If you try to verify their regulations, you will find these clone firms.

Can you see how familiar the names are? This is another key reason to check your broker’s regulation.

2) Overall fees with ECN account: You must know the total fees involved with a broker. Spreads, swaps, and commissions are trading fees you need to pay attention to. They affect your final profit and loss over a period of time. There could also be non-trading fees like currency conversion fees, deposit/withdrawal fees, and inactivity fees.

These fees vary for different brokers. Some brokers do not have them. Here is how you can check the trading fees on ECN Accounts. We’ll use IC Markets as our example. On the homepage, click on ‘Trading’. In the dropdown that shows up, click on ‘Spreads’

On the spread page, click on ‘Forex’. You will see that it displays the spread for two accounts. The Raw Spread Account is IC Markets’ ECN account and the spreads are considerably lower compared to the Standard Account.

ECN accounts typically have extra commissions per lot because of their low spreads. Because commission imparts your loss or profit, it is important to check them. If you scroll down on IC Markets’ spread page, you will find the commissions they charge for their ECN Account. Here is the image below.

You can see that a $3.5 commission is charged on MT4/MT5 while $3.0 is charged on cTrader. For other fees, you can reach out to your brokers instead of searching for yourself.

3) Platforms: Metatrader 4, Metatrader, and cTrader are popular trading platforms. Your preferred broker should offer them. It is important to check if these platforms are available as PC software and mobile phone apps.

PC software gives you a full outlay of price movements. However, you might have to check your trades on the go. This is why you must have these trading platforms as apps on your phone. You can check to make sure your ECN broker has their trading platforms on PC and mobile phones.

Here is an example with FxPro, If you click ‘Tools’ (in red box) on their homepage, you will find the list of their trading platforms displayed below

From the list, click any of the platforms to check if it is available on PC and mobile phones. Let us see an example with FxPro’s MetaTrader 5. If you click it, you will find your proof on the next page. The image below shows FxPro’s MT5 is available on PC (Windows and Mac)

While this confirms the availability of the platform on mobile phones an can be downloaded from Google Play and the App Store.

4) Range of CFD Instruments: You should be able to trade as many instruments as you desire. Beyond currency pairs, you should check if your broker offers commodities, metals, stocks, etc. You get exposed to different markets and trading instruments when your broker has a good range of markets. Crypto CFDs are not available for UK traders.

Here is how you can check an ECN’s broker range of trading instruments in the UK. We will use Pepperstone as an example.

First, go to Pepperstone’s UK website and click ‘Markets’ as shown below

On the page that follows, scroll down and you will see the instruments available at pepperstone. Here is how it looks.

If you click any of the instrument classes, you will find more details like spreads and commissions about individual CFDs in each class.

5) Deposit/Withdrawal methods: Transaction speed varies with deposit/withdrawal methods. Bank transfers usually take the most time. Deposit/withdrawals through Skrill and Neteller are faster. Transaction fees also vary. This is why your broker must give you various options for deposits/withdrawals.

Before choosing a funding or payment method, you should check if there are extra fees that come with it. Banks and e-wallet providers have their own independent fees. However, your broker might also add their own fees so it is important you check it.

Here is how to check it with FxPro for example. On the homepage, click on ‘Pricing’. Then, click on ‘Funding’ in the dropdown as displayed below.

FxPro’s funding/withdrawal fees will be displayed when you click on ‘Funding’. You can see from the image below that the ECN broker has three payment methods. All the methods are free without extra costs from FxPro.

6) Customer Support: Good customer support guarantees speedy answers to enquiries and complaints. Your preferred broker should be easy to reach. Live chat features and emails are prominent these days. A local mobile phone number should also be available.

How Begin with an ECN Broker in the UK

We will use AxiTrader as our example broker.

1) Go to Axi’s website and click ‘OPEN AN ACCOUNT’.

2) Fill out the registration displayed below. Your name, phone number, and email will be required. Agree to the privacy policy and click ‘SUBMIT’

3) Create your password

4) Choose your account type. For AxiTrader, their Pro Account is the one with ECN properties. So you will have to choose the Pro Account.

Once you choose your account, you can proceed to complete the other processes. You will choose your account’s base currency, initiate and complete your KYC, etc. You will also have to give info about your finances and trading experience.

When you have completed these, you can procced to fund your account and begin trading.

FAQs on Best ECN Brokers in the UK