Comparison of Best ECN Brokers Canada

Best ECN Brokers in Canada 2023

Below are the ECN brokers in Canada that made our list:

1. CMC Markets – Best ECN broker with Zero Commissions
2. Interactive Brokers – Best ECN broker with low spreads
3. Forex.com – Best ECN broker with real time news
4. AvaTrade – Best ECN broker with 24/7 Customer Support

Now let’s discuss them in details:

#1 CMC Markets – Best ECN broker with Zero Commissions

CMC Markets is regulated by tier-1 regulators such as the Australian Securities and Investment Commission (ASIC), the Financial Conduct Authority (FCA), as well as the CIRO.

It is also regulated by tier-2 regulators, which makes it an ECN broker that you can trust. The trust score lies at 99.

This trading platform has several awards to its name like Highest Overall Client Satisfaction 2018, Platform Features 2017, and a host of others.

Regulation: CMC Markets are regulated with CIRO as CMC Markets Canada Inc.

Trading fees: CMC Markets charge spreads on trades on the platform, majors like EURUSD have an average spread of 0.7 pips. You can trade currencies, commodities, ETFs, and treasuries with no commissions. When trading shares, you pay commission fee of $8 per round turn, this amount can vary depending on trade size. Swap fees apply for overnight open positions.

Available Platforms: MT4, Web Platform, Mobile Apps (compatible with Android and iPhone). CMC Markets also supports Next Generation which is its proprietary trading application available on the web and mobile devices.

Funding/Withdrawals: You can fund your account by wire transfer, personal cheque or EFT such as PayPal in your name, as funding from third-party sources is not allowed. Deposits take between 24 hours, 3 business days and up to 5 business to be credited for bank wire transfers, EFT and personal cheques respectively. Only the wire transfer method attract a fee of $15 per transaction, others are free.

Withdrawals can be made to bank accounts via wire transfer or EFT such as PayPal. All withdrawals are processed in 1-2 business days, depending on the withdrawal method.

Customer Support: CMC Markets has excellent customer support with a quick response time.

However, it is available 24 hours, Mondays to Fridays only. CMC Markets won the award of Best Customer Service in 2018.

#2 Interactive Brokers – Best ECN broker with low spreads

Users that wish to trade forex have over 20 trading pairs to select from and execute trades.

Interactive Brokers supports numerous trading tools you can choose to analyze the market. It integrates with powerful third-party tools like portfolio management software, which could be used to manage and analyze your trading portfolio.

You can open, track, and control multiple trades simultaneously with a single account on Interactive Brokers. Both institutions and retail traders find this platform handy because of the streamlined interface and extensive features it supports. Beginners also find it helpful as it helps them learn faster at a zero-cost fee.

Regulation: Interactive Brokers is regulated by CIRO as Interactive Brokers Canada Inc.

Trading fees: Interactive Brokers charge commission fees starting from $1 per trade and can be up to
$14.95, depending on the instrument and value of equity. The broker also has spreads with an average of 0.2 pips for EURUSD. The spreads reduce as the value of your equity increases. Swap fees are charged on positions that are kept open overnight.

Available Platforms: Interactive Brokers offers a number of proprietary trading applications such as Client Portal, Trader Workstation, IBKR Mobile. These can be access on mobile devices (Android and iOS) as well as web versions and desktop apps.

Funding/Withdrawals: Funding your Interactive Brokers profile is straightforward as the platform offers many deposit options, such as Wire transfers and EFT. Deposits reflect in your trading account with 1 to 5 business days for EFT (e-wallets) while bank transfers deposit can be credited within 1 business day.

Withdrawal of funds is also simple on Interactive Brokers. This online trading service lets you withdraw freely once a month. Subsequent withdrawal within the same month attracts charges. The time taken for funds to land in your account range from 3 to 8 days, depending on your selected withdrawal type.

Customer Support: Interactive Brokers offers quality customer service. The technical team is always available 24 hours for five (5) days a week to respond to customers’ queries. Replies don’t take time, as the team works tirelessly to ensure everything you need is met promptly.

#3 Forex.com – Best ECN broker with real time news

Another feature that sets this platform apart is the real-time market news. With Forex.com, you can trade several markets easily and quickly. It offers forex, commodities, indices, and stock market trading. It provides advanced data analysis tools to analyze trades before setting orders.

Forex.com integrates with multiple trading platforms, such as MetaTrader 4, Web Trading, and the popular ForexTrader Pro. The online trading platform boasts excellent end-to-end encryption. Thus, users don’t have to worry about data theft.

Regulations: Forex.com is registered with CIRO and is mandated to adhere to the CIRO standards. Forex.com is regulated in Canada as GAIN Capital – FOREX.com Canada Limited. The broker is also regulated by other bodies in other regions of the world.

Trading Fees: Forex.com charges commission of $7 dollars per trade on the Raw Pricing Account, while the DMA Account has commissions of $80 per trade and the Standard Account has no commission fees. The broker also charges spreads with an average of 1.2 pips for EURUSD and swap fees are paid on overnight positions.

Available Platforms: Forex.com supports the MetaTrader 5 and MetaTrader 4 trading applications. The broker also offers their proprietary Forex.com trading application platform in both mobile and web versions.

Funding/Withdrawals: Forex.com provides several deposit options you can select from to fund your trading account. It lets you add funds via your VISA credit/debit cards, wire transfers, Skrill, and Neteller. The fund usually takes 30 minutes for cards and e-wallets and 1 day for bank transfers to reflect in your trading account.

Funds withdrawal on Forex.com is simple and quick. The platform permits you to withdraw funds to linked debit/credit cards. You can also send the funds directly to your bank account via wire transfer. Withdrawals are processed within 24 hours, although it may take longer to reach your account depending on your financial institution.

Customer Support: Forex.com has the best customer support team that is forever available to attend to you. The support team is made up of experts who have got a wealth of knowledge in trading. Forex.com customer support works 24 hours daily for five working days.

#4 AvaTrade – Best ECN broker with 24/7 Customer Support

The platform is equipped with several educational resources, such as videos and articles, that you can read through to enhance your trading skill. AvaTrade has a large customer base as it offers brokerage services to clients in Europe, Australia, Japan, Canada, and the Middle East.

AvaTrade offers over 50 currency trading pairs to trade in the forex market. Users can also open commodities, stocks, and crypto orders as the platform support CFDs. AvaTrade ECN brokerage is fast and reliable.

Regulations: AvaTrade complies with CIRO rules and regulations and is regulated in Canada under the Friedberg Mercantile Group Limited.

Trading Fees: AvaTrade does not charge commission fees for any trade you execute. However, it does spreads with an average of 0.6 pips for majors like EURUSD and swap fees on overnight positions that are open.

Mind you, these fees change over time, so you need to check with the platform often.

Available Platforms: AvaTrade integrates with some of the best trading platforms you know. Some of them include; MetaTrader 4, MetaTrader 5, and AvaTrade’s proprietary WebTrader. Also, you have the AvaTradeGo- an excellent mobile trading app with advanced features built by AvaTrade and AvaSocial for copy-trading.

Funding/Withdrawals: AvaTrade lets you fund your account in two ways; via bank transfer (takes up to 10 business days) or credit/debit card (instantly reflects in your trading account). No rigorous process is involved. You can deposit funds and start executing trades with just a few clicks.

Funds withdrawal is quite similar. It takes a few minutes to 24 hours for AvaTrade to process your withdrawal request, after which the funds will land in your account 5-10 days later, depending on the county in which your bank is situated.

Customer Support: AvaTrade offers excellent customer service to end-users. The award-winning team works 24/7 from Sunday to Friday. You can also reach out to the support team on holidays.

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 STP Broker— 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.

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 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.

How to verify CIRO Regulation on your ECN Broker

If you are not sure if your ECN broker is CIRO regulated, you can find out by visiting your ECN broker’s homepage. Scroll down to the bottom of the page and check out for any regulatory body it may belong to.

You would see something like this: This (ECN Broker) is a member of the Canadian Investment Regulatory Organisation (CIRO) and a member of the Canadian Investor Protector Fund.

To confirm this, open the IIROC website (www.iiroc.ca) and search for your ECN broker name in the search button or go to the Dealer Member or Advisor Report section.

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.

FAQs on Best ECN Brokers Canada