ECN Forex Brokers
About ECN Brokers
Forex brokers that charge a spread and commission are often termed ECN brokers. This means they have no dealing desk with a goal of not making a profit from the spread but rather a flat commission rate based on volume. Any remaining spread is determined by the market.
Most experienced Forex traders will choose an ECN forex broker as their overall fees are lower. They also have superior execution speeds with traders having direct access to other financial instructions and liquidity pools.
No Commission Brokers
About Non-Commission Brokers
Often termed as ‘standard accounts’ these brokers (or accounts) have no commissions. Instead, the forex broker makes its money primarily from the spread (the difference between the buy and sell price). These spreads will differ based on the currency pair and the time of the day. Generally, the more major traded pairs such as the EUR/USD will have lower spreads than more exotic pairings.
Non-Commission brokers are normally the performance of beginner forex traders due to the simplicity of pricing. This can make it easier to calculate the profit/losses of trades. The downside is the overall fees may be higher compared to an ECN trading account.
Forex Broker For Beginners
Best Forex Brokers For Beginners
Unlike ECN or Non-Commission accounts, the best forex broker for beginners are fixed spread accounts that don’t have floating spreads. This means that traders know the fees a broker will charge over time adding certainty when training. Often fixed spread brokers also will have other risk management tools included such as guaranteed stop losses.
Fixed spread forex brokers have the highest fees so most experienced or algorithmic traders won’t consider this option. They also have the poorest execution speeds of the three broker sets. They are still the best forex broker for beginners as risk management tools can limit losses and their training facilities are the best for novice traders.