The difference between ECN and market maker execution
A lot of the brokers you'll come across fall into two broad camps: dealing desk or ECN. This isn't just terminology. A dealing desk broker becomes your counterparty. A true ECN setup routes your order through to liquidity providers — you get fills from genuine liquidity.
Day to day, the difference shows up in a few ways: whether spreads blow out at the wrong moment, execution speed, and whether you get requoted. ECN brokers tends to give you tighter spreads but charge a commission per lot. Dealing desk brokers mark up the spread instead. Neither model is inherently bad — it depends on how you trade.
If you scalp or trade high frequency, ECN execution is generally the right choice. Tighter spreads makes up for the commission cost on the major pairs.
Why execution speed is more than a marketing number
Every broker's website mentions fill times. Figures like sub-50 milliseconds sound impressive, but how much does it matter when you're actually placing trades? It depends entirely on what you're doing.
For someone executing two or three swing trades a week, shaving off a few milliseconds is irrelevant. If you're scalping 1-2 pip moves working small price moves, execution lag can equal money left on the table. A broker averaging under 40ms with a no-requote policy provides an actual advantage compared to platforms with 150-200ms fills.
Certain platforms built proprietary execution technology specifically for speed. Titan FX, for example, built their Zero Point technology designed to route orders immediately to LPs without dealing desk intervention — they report averages of under 37 milliseconds. There's a thorough analysis in this Titan FX broker review.
Commission-based vs spread-only accounts — which costs less?
This is something nearly every trader asks when choosing a broker account: should I choose commission plus tight spreads or markup spreads with no fee per lot? It comes down to volume.
Take a typical example. A standard account might show EUR/USD at 1.1-1.3 pips. A commission-based account shows the same pair at 0.0-0.3 pips but charges roughly $3-4 per standard lot round trip. On the spread-only option, the broker takes their cut via every trade. Once you're trading moderate volume, the raw spread account is almost always cheaper.
A lot of platforms offer both side by side so you can pick what suits your volume. Make sure you calculate based on your actual trading volume rather than relying on marketing scenarios — they tend to make the case for whichever account the broker wants to push.
Understanding 500:1 leverage without the moralising
The leverage conversation splits retail traders more than almost anything else. The major regulatory bodies restrict retail leverage at 30:1 in most jurisdictions. Offshore brokers can still offer ratios of 500:1 and above.
Critics of high leverage is simple: retail traders can't handle it. Fair enough — statistically, most retail traders do lose. But the argument misses nuance: professional retail traders don't use full leverage. What they do is use the option of high leverage to minimise the capital sitting as margin in each position — leaving more margin for additional positions.
Obviously it carries risk. Nobody disputes that. The leverage itself isn't the issue — how you size your positions is. If your strategy benefits from lower margin requirements, access to 500:1 frees up margin for other positions — which is the whole point for anyone who knows what they're doing.
Offshore regulation: what traders actually need to understand
Broker regulation in forex falls into tiers. At the top is FCA, ASIC, CySEC. They cap leverage at 30:1, require negative balance protection, and generally restrict the trading conditions available to retail accounts. On the other end you've got places like Vanuatu (VFSC) and similar offshore regulators. Less oversight, but that also means higher leverage and fewer restrictions.
What you're exchanging not subtle: going with an offshore-regulated broker means more aggressive trading conditions, lower account restrictions, and typically cheaper trading costs. The flip side is, you sacrifice some regulatory protection if there's a dispute. You don't get a investor guarantee fund paying out up to GBP85k.
For traders who understand this trade-off and choose better conditions, offshore brokers work well. The key is checking the broker's track record rather than simply checking if they're regulated somewhere. A broker with a long track record and no withdrawal issues under tier-3 regulation is often a safer bet in practice than a newly licensed broker that got its licence last year.
Broker selection for scalping: the non-negotiables
Scalping is one area where broker choice matters most. When you're trading tiny price movements and holding positions for seconds to minutes. In that environment, even small variations in spread equal real money.
What to look for isn't long: true ECN spreads at actual market rates, order execution under 50 milliseconds, zero requotes, and no restrictions on scalping and high-frequency find out here trading. Some brokers claim to allow scalping but add latency to orders for high-frequency traders. Look at the execution policy before depositing.
ECN brokers that chase this type of trader usually put their execution specs front and centre. Look for execution speed data somewhere prominent, and usually throw in VPS access for running bots 24/5. If a broker avoids discussing execution specifications anywhere on the website, that's probably not a good sign for scalpers.
Social trading in forex: practical expectations
Copy trading has grown over the past decade. The pitch is obvious: pick traders who are making money, mirror their activity in your own account, and profit alongside them. In practice is more complicated than the platform promos suggest.
The biggest issue is time lag. When a signal provider opens a position, your copy fills milliseconds to seconds later — during volatile conditions, the delay can turn a winning entry into a bad one. The tighter the average trade size in pips, the worse this problem becomes.
Having said that, certain implementations deliver value for people who don't want to trade actively. The key is finding access to real track records over a minimum of 12 months, not just demo account performance. Metrics like Sharpe ratio and maximum drawdown matter more than raw return figures.
Certain brokers have built proprietary copy trading integrated with their main offering. This can minimise latency issues compared to standalone signal platforms that connect to the trading platform. Check how the copy system integrates before assuming the lead trader's performance can be replicated to your account.