I'm new to this forum and to trading. I am looking into a comparison between an ECN brokers and other forex brokers available now.
I wonder who has more advantage when it comes to the trading itself.
I appreciate your suggestions.
I've traded with normal brokers for some years with no problems, but now I've used ECN brokers I will never go back.
Especially if your strategy or EA is going for some pips and your trades are short term, the ECN broker commission model fits you perfectly.
For instance if you are going for 8 pips profit on a trade on a normal broker, you will need to touch 10 pips (8 plus 2 for average spread) in order to close that trade in your desired profit.
The same trade with a ECN broker, it will close at 8 pips profit and you will be charged a commission on that profit, you won't need to go for the 2 more pips in order to cover the spread cost.
This difference alone can cause you some lost trades, so the ECN advantage is clear.
Also a true ECN broker is passing your trades directly to large liquidity providers and doesn't act competitively with you. That's another ECN advantage.
ECN account have some disadvantages too, that Sergey has highlighted very well here:
Forum on trading, automated trading systems and testing trading strategies
True ECN Broker vs Not True ECN Broker
Sergey Golubev, 2016.07.13 21:53
ECN accounts offer tight spreads but they charge little commission, STP accounts offer a little bit higher spreads with no commission. Account choice depends on your trading style. If you are chasing up to 100 pips per trade, ECN works for you.
STP works for long term traders. By the way don't worry about account types, just try to make more pips :)
STP works for long term traders. By the way, don't worry about account types, just try to make more pips :)