Best ECN Brokers in South Africa for 2021! The best ECN brokers for South Africans are regulated by FSCA, FCA or ASIC. An ECN broker South Africa has the lowest trading costs on the financial market, however, some brokers charge depending on the financial volume managed and have a low spread.
You may not know and do not know how to open an ECN brokerage account, so this text is special for you. We separate the most well-known and trusted brokers on the market. In this guide, you will learn more about the best ECN Brokers South Africa.
Best ECN Brokers in South Africa
|Forex Broker||Review||Minimum Deposit||Visit Site|
|CM Trading||Read Review||$250||Visit Broker
|Plus500||Read Review||R1500||Visit Broker
|HYCM Markets||Read Review||$100||Visit Broker
|Markets.com||Read Review||R1000||Visit Broker|
|FXGM South Africa||Read Review||$200||Visit Broker
|AvaTrade||Read Review||$100||Visit Broker|
|easyMarkets||Read Review||$100||Visit Broker|
|XM||Read Review||$5||Visit Broker
Best ECN brokers in South Africa for 2021
- Tickmill – Best FSCA Regulated ECN Broker
- IC Markets – Best ECN Broker South Africa
- Hotforex – Best STP Broker Regulated by FSCA
- FXTM – FSCA Regulated with ECN Accounts
- FxPro – 100% NDD broker
- FP Markets – ASIC Regulated ECN broker
What does ECN mean?
An ECN broker stands for Electronic Communication Network (ECN). An ECN broker is responsible for connecting the investor to an electronic communications network. Therefore, users of ECN brokers can execute orders immediately on the financial market.
What is ECN foreign exchange trading?
ECN currency trading are specialized brokers on the foreign exchange market. As I said, ECN is an electronic communications network for the broker’s client to have direct access to the financial market.
In the case of ECN currency trading, the broker consolidates the price of several players in the market and offers his client a spread offer / demand, this spread ratio must be lower than it would normally be.
Some well-known ECN brokers offer a spread of 0.0 pips, but the spread is not limited, it can increase. The lower the relationship between the purchase price and the sale, the lower the profit margin that the broker will take from your order, this makes the difference in operations and analysis.
How does an ECN broker work?
ECN brokers in South Africa participate in the over-the-counter market, do not send orders and orders to market makers. In other words, the broker trades only among the participants and promotes the liquidity of the transaction, this happens electronically and in this way a combination appears between each transaction sent to the market.
To avoid manipulation in the market, the broker cannot place or combine orders, so that his client loses. It is important to emphasize this, as many market players claim that brokerage firms trade against their orders. So it is important to look for accredited and reliable ECN brokers, we have separated a list of the most reliable brokers, keep reading to find out!
The ECN broker does not have a fixed limit for orders, a fixed commission is usually charged to investors, over time you will notice that orders at ECN brokers have lower costs and trading time may be longer.
Electronic communications network
The electronic communications network is a system for collecting orders from buyers and sellers who want to trade. This network has been designed so that orders are similar to those on the stock exchange, but when orders fail to gather available information, they always reflect the highest price at the time or the lowest free market offer.
In this way, by collecting information from buy and sell orders, the system provides “price markers” or market price. Prices are executable by clicking on Bid or Ask, when you buy it builds a virtual order at the brokerage, just like the stock exchange.
Why go to an ECN broker?
One of the main advantages of ECN brokers is the ability to trade outside conventional trading hours, investors who do not have time to trade during normal hours can trade more flexibly.
Spread is one of the reasons why people choose an ECN broker, there is no big difference between spreads, this allows the broker’s fees and commissions to be lower than normal.
Interestingly, this type of broker offers the possibility of anonymity, so they are safer and more attractive to investors who want to trade with more aggressive orders and large financial volumes.
Is an ECN broker reliable?
ECN brokers must have a transparent policy with their investors, mainly regarding the financial information that must be transmitted in real time to the investor.
The customer must have access to:
- Order history
- Current asset prices
- Previous price history (via charts)
Analysis of the previous price scenario allows the trader to know whether or not there is manipulation in that broker, it is difficult for a broker who has a history of orders to manage information, even several ECN brokers that have a short spread.
Another point to note and which guarantees the reliability of this type of broker is that orders cannot be manipulated because they have no interruptions, this is a correct way not to manipulate market prices. If you are suspicious and notice interruptions in your orders, be suspicious!
Do ECN brokers charge a commission?
One of the biggest disadvantages of ECN brokers is the fixed rates, i.e. you have to pay to use the ECN system. For some traders, fees may be limited, but for others, depending on the choice of brokers, the commission can significantly affect the profit of each operation.
How to find the best ECN broker in South Africa?
Unfortunately, many currency brokers pretend to be ECNs . To find a real ECN broker, you just need to identify these points:
- They have 0.0 pips spread
- Put a profit margin on swaps
- Do not change the spread size so that you quickly reach stop loss
- Do not redirect the order to the market or block
- Do not allow escape operations. This is because the broker does not want to place more orders on the market, because this way it is difficult to control.
- Orders cannot be traded with the broker, because the broker will always win, i.e. the broker wins when you lose and when you win (commission). This is a classic conflict of interest.
- Trading margins cannot change depending on market position and weekend.
These are the main signs to identify a fraudulent ECN broker for you.
Top ECN Forex Brokers South Africa
The best ECN forex brokers based on spread, trading platform and commission will be listed below.
It is important to note that everyone is registered with the Financial Conduct Authority, which ensures that you place your orders safely on the market.
To choose the best broker it is important to compare each platform and even test the trading system. For example, many brokers now offer the ability to create an unlimited account to operate and test the service for free.
Reliable ECN brokers in South Africa
Always look for regulated platforms in the market, look for customers and regulators. It is important for an ECN broker to have direct transactions without commissions, strong supervision by regulators and transparency towards its clients.
Always beware of brokers that do not provide all customer data and keep account information separate. Negotiations must be real-time and the order history must be provided.
Another point to consider in all ECN brokers is the small difference and ease of opening an investment counter. Beware of sites that bureaucratize the opening of an account on the market and be careful if someone asks you for your bank account number and password.
ECN broker benefits
For beginners or experienced day trading traders , the ideal is to look for an ECN broker, because the limit is lower, orders are sent faster and the rate is low for each order. At the end of the operation, you will find that a low cost helps your profitability.
The trader can have a precise trading scenario in the ECN environment, although some suppliers may use intermediaries or trading offices, the orders are placed directly with the supplier.
What is an ECN / STP broker?
An STP / ECN broker is able to bring together a processor and an electronic communications network. In this case, the broker chooses the trading profile of the trader and which method is the most interesting to execute the order: STP or ECN.
Preferably, when the market has more liquidity, the broker chooses an STP execution , but for immediate liquidity within the ECN network is the most used method.
Is there stability in ECN brokers South Africa?
Although there are several aspects for ECN brokers in South Africa to be stable, mainly due to the low spread, the biggest danger is price slippage. Price slippage occurs when the market is volatile, i.e. when volatility is high. Slippage usually occurs when there is a political conflict or the disclosure of macroeconomic data.
Another risk of a South African ECN broker is not sending the client’s order at the price and quantity sent, when this happens there is a serious violation of the stop loss, the trader can lose considerable amounts due to the error of that broker.
However, these are the two main dangers, we hope you found out about the ECN broker, choose the most modern option on the market and do not forget to look for the regulation of this broker, although the negotiation is attractive, it is important to look for a reliable broker.
ECN brokers FAQs
Are active traders ECN?
Active traders say that it has a hybrid model, it is ECN and Market Maker at the same time, this is a different format for routing orders, but all are captured by an automated trading desk, nothing passes through people’s hands.
Is XM ECN brokerage?
Yes, XM is an ECN broker, has ECN execution, 30: 1 leverage and variable spread.
Which is the best ECN forex broker in South Africa?
FXTM is the best ECN Forex broker in South Africa.
What regulation does the ECN broker need?
The most important regulations for ECN brokers are: FSCA, ASIC, CySEC and FCA. If your broker does not have this seal on the site, be careful!! Some brokers have dubious regulations, such as the Cayman Seal, São Vicente and Bermuda, these regulatory agencies are not reliable in the market.
ECN Reddit: Is it worth getting advice on the site?
Investors exchange a lot of information about ECN on Reddit. Despite the fact that you have various information, always be careful when following investment tips posted on these types of sites.