ECN brokers list | ECN/STP Forex brokers




ECN Forex Brokers

(No Dealing Desk + STP + ECN)

ADM Derivatives Inc
Alpari UK
ATC Brokers (institutional)
ATG Marketplex
Broco (Broco Investor and Strategy Runner platforms)

Capital Forex (division of LCG)
CFH Markets
Deltastock (Level 2)
Divisa Capital (DCFX)
Dorman FX
Dukascopy
FastBrokersFX (FastFX Integral ECN)
FinOdds
FXCBS (institutional accounts)
FXCM (Active Trader)
FXDD (Power Trader Platform)
FXOpen (Level 2)
Hotspot FXi (institutional accounts)
Ikon Global Markets (Ikon Viking platform)
Interactive Brokers
London Capital Group
Masterforex (Level 2)
MB Trading
MBCFX (institutional accounts)
Moneycorp Markets
NordMarkets
One Financial (One DMA FX)
PFGBEST
PronetFX
Real-Forex (Finocorp Ltd)
The Traders Guide
TradersChoiceFX
TradersVoiceFX

ECN / Prime Brokerage :
ODL Prime
GFT Prime
IG Markets (UK) Level 2 Dealer

ECN For High Volume Traders :
ICAP or EBS
vCap FX (institutional)

STP Forex brokers

(No Dealing Desk + STP)

ACM
ActivTrades (Interbank account)
Advanced Markets
Atlantic FX
Autobahn FX (Deutsche Bank AG)
AVS Carter
BARX (Barclays Capital) (Institutional)
E-Global Trade & Finance Group
Exto Capital
Forex4you
Forex FS
ForInvest Group
FX Financial Group
FXCBS (standard accounts)
FXCM - Forex Capital Markets
FXLite
Gallant FX
Spot Trader FX
GNI touch
Go Markets
GTL Trading
IamFX
IBFX (STP+MM)
InvestTechFX
JadeFX
LatitudeFX
Loyal Forex
Masterforex
MF Global FX
Nord FX
OneCorpFX - OCFX
SmartTradeFX
TADAWUL FX
The Collective FX
TradersChoiceFX
Tradeview Forex (Currenex)
UWC - United World Capital
Vantage FX
Varengold Bank FX
vCap FX (retail)
WH SelfInvest
WSD Direct
1pipfix


Click here for MT4 ECN Forex Brokers List


Do you know another NDD/STP/ECN Forex broker? Please suggest by adding a comment below.

Forex brokers: ECN vs STP vs NDD vs DD

Dealing desk versus No dealing desk order processing

DD — Dealing Desk — Forex brokers that operate (route orders) through the Dealing Desk and quote fixed spreads. A dealing desk broker makes money via spreads and by trading against its clients. A Dealing Desk Forex broker is called a Market Maker - they literally "make the market" for traders: when traders want to sell, they buy from them, when traders want to buy, they sell to them, e.g. they will always take the opposite side of the trade and in this way "create the market". A trader doesn't see the real market quotes, which allows Dealing Desk brokers (Market Makers) manipulate with their quotes where they need to in order to fill the client.

NDD — No Dealing Desk — NDD Forex brokers provide access to the interbank market without passing orders trough the dealing desk. With true No Dealing Desk brokers there are no re-quotes on orders and no additional pausing during order confirmation. This, in particular, allows trading during news times with no restrictions on trading.
An NDD broker can either charge commission for trading or choose to increase the spread and make Forex trading commission free.
No Dealing Desk brokers are either STP or ECN+STP.

STP — Straight Through Processing — STP Forex brokers send orders directly from clients to the liquidity providers - banks, which trade on the Intebank. Sometimes STP brokers have just one liquidity provider, other times several. The more there are banks and liquidity in the system, the better the fills for the clients.
The fact that traders have access to the true market and can execute trades immediately without dealer intervention is what makes the platform STP.

ECN — Electronic Communications Network — ECN Forex brokers additionally allow clients' orders to interact with other clients' orders. ECN Forex broker provides a marketplace where all its participants (banks, market makers and individual traders) trade against each other by sending competing bids and offers into the system. Participants interact inside the system and get the best offers for their trades available at that time. All trading orders are matched between counter parties in real time. A small trading fee - commission - is always applied.
Sometimes STP brokers are discussed as if they were ECN brokers. To be a true ECN, a broker must display the Depth of the Market (DOM) in a data window, let clients show their own order size in the system and allow other clients to hit those orders. With ECN broker traders can see where the liquidity is and execute trades.

Broker types and revenues: fixed vs variable spreads vs commission

ECN Forex brokers always have variable spreads. Only ECN brokers charge commission for trading Forex. Commission is the only revenue/profit an ECN broker receives. ECN brokers are not making money on bid/ask (spread) difference.

An STP Forex broker is compensated through the spread (spread markups - to be explained in details below).

STP brokers have a choice of offering variable or fixed spreads. STP brokers route all trading orders to the liquidity providers - banks. These brokers, as intermediaries between their clients and banks, receive prices (spreads) posted by the banks on the Interbank market. Most banks, in fact, offer fixed spreads and are market makers.
An STP broker therefore has 2 options:
1. Let spreads be fixed.
2. Leave the spread at 0 and let the system take the best bid and ask from the number of banks (the more the better) and in this way provide variable spreads.
How an STP broker earns its money? Since STP brokers (as well as ECN) don't trade against their clients, they add own small markups to the spread quote. This is done by adding a pip (or half a pip, or any other amount) to the best bid and subtracting a pip at the best ask of its liquidity provider. All client orders are directly routed to the liquidity providers at original spread quoted by those providers while an STP broker earns its money from own markups.

Forex market maker - a broker with a dealing desk earns money on bid/ask difference as well as when a client loses a trade, since market makers are trading against their clients by hedging - entering in an opposite trade.

Conclusion:

ECN brokers are the purest breed among all Forex dealers. They don't profit on spread difference. Their only profit comes from commission. ECN brokers are interested in their clients to be winning, otherwise there will be no commission to earn.

STP brokers make money on spreads, thus even though they do not have a physical dealing desk to monitor and counter-trade client orders, they are still able to set their own price - the spread markup - for routing trading orders to liquidity providers and providing their clients with advanced trading services, lower account deposits, faster execution and anonymous trading environment with no dealing desk. STP brokers are also interested to see their clients trading profitable, so that a broker can continue earning on spreads.

Market makers make money on spreads and by hedging against their clients. However, if a client becomes "too" profitable, it can directly "upset" the broker. While this may be tolerated and professionally managed by a larger reputable market maker, with a smaller dealer such client will be soon asked to leave.

Benefits of trading with No Dealing Desk brokers

Among the main reason why traders look for NDD brokers is transparency, better and faster fills and anonymity.

Transparency means that a trader enters a true market instead of the market being artificially created for him.
Better fills are a result of the direct and competitive market bids and offers.

Anonymity means that there is no Dealing Desk watching who has come to the market and is asking for an order to be filled, instead client orders are executed automatically, immediately through the market network and totally anonymously.

On the opposite side is a Dealing Desk broker, who is able to profile their clients. In the worst case scenario, such broker can split clients into groups and put less successful ones on auto-execution and trade against them because on average they will lose, while clients that show signs of successful trading will be put on "slow-down" mode and can be provided with frequent re-quotes, slippage and/or slower execution especially during fast moving markets while a broker tries to offset own risks. The transparency of a Dealing Desk broker depends on the rules inside the company.

Forex Brokers aren't bad on general, whether a Dealing or Non-Dealing Desk, they aren't there to be against any particular trader. They look to make business, not just work for traders in terms of cooperation in the market environment. Many large Forex brokers who have lots of clients tend to try to help their clients become profitable as much as they can, but once a trading order is placed, its everyone for themselves.

Copyright © 100forexbrokers.com | All Rights Reserved



Broker discussion area

Aburenad

December 9, 2008

This is the first time I see a simple and clear information on DD, NDD, STP and ECN. I thought before that there are no differences between STP and ECN brokers. I even chatted with some brokers where they did not know about it (mostly those are DD brokers. Perhaps they claim that they do not know about it).

Thanks for your effort on this article

Best of luck

Aburenad


trader

December 17, 2008

This turned out to be a very helpful article. Thank you very much!


trader

December 17, 2008

Tradeview Forex and Thinkorswim are STP/ECN,
CHECK them out to confirm.


BrokerGuru

December 18, 2008

Thank you.
We've checked. It turned out that:

Tradeview Forex has a dealing desk: most of their risk is passed through to the banks, but they may take risks on smaller positions which banks wont accept.

Thinkorswim is an introducing broker for Penson Fincancial - a dealing desk broker which Thinkorswim routes their orders to.


trader

December 19, 2008

There has been some question as to MBTrading being an ecn? Anybody have any knowledge or experience? How can one verify the claims of a broker? Wouldn't they all claim to be stp or ndd since that is what it appears most forex traders are looking for?
tks


BrokerGuru

December 24, 2008

Alright, the results and answers are in:
We asked several ECN brokers to explain "How one can verify the claims of a broker being an STP/ECN."

MB Trading replied:
"MB Trading Futures maintains orders anonymously using STP/ECN technology. The technology itself is modeled after the securities industry and facilitates best execution for you and generates price competition, which means traders can "skip the middle man" and save money, rather then using other traditional FCM’s using deal desk models. The firm accomplishes this by routing orders to banks and pools of liquidity to create a true “non-dealing” desk platform. Traders have the ability to route orders via fifteen order types to qualified destinations through our STP (Straight Through Processing) platform.

Since there is no central marketplace for forex, there is no website/regulatory group similar to that of securities for you to verify. The only thing I can suggest is to perhaps try out our demo so you can experience the ECN technology yourself to see the differences between deal desk methodologies and our model."

Taurus Global Markets replied:
"On trader/client side there is no way of knowing whether a company is an ECN or NOT. There are also company's that may be ECN part-time, 50%, 90% or Full-time. We on this matter are full-time ECN, as we (support) are more technicians managing TradeFLO® that connects from MT4 to Banks, etc."


BrokerGuru

December 27, 2008

On top of everything said before, there are two simple rules to follow:
1. ECN brokers don't have fixed spreads, instead their spreads are variable. If a broker quotes fixed spreads - this is not an ECN broker.
2. ECN brokers charge commission for trading Forex. If a broker claims to charge no commission, it is not an ECN.


trader

January 2, 2009

what about GFT? Where do they belong? STP, NDD, market maker... etc The broker was not mentioned in your list


BrokerGuru

January 3, 2009

GFT is a market maker.


trader

January 13, 2009

What about GFS Forex and Futures,


BrokerGuru

January 14, 2009

They are STP.

We have listed all known ECN, STP Forex brokers. If a broker is not on the list, it means (in 99% of the cases) they belong to market makers group. The remaining 1% is mostly for new companies.


trader

January 14, 2009

Are they /GFS/ trustworthy? Would you open an account with them?



Write your comment or a review!