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The Best ECN Brokers for South African Traders

There is a group of Forex brokers called the ECN brokers. This group of brokers deals with your orders in a rather unique way.

Many Forex traders prefer to register with an ECN broker and this is why many Forex brokers, who do not offer ECN service, like that they do. This is why you need to properly investigate each of these Forex brokers before you partner with any of them.

Best Forex Brokers in South Africa for 2020

exness

Min.Deposit

R 1500

Regulated.
In SA

Get Bonus
eaglefx online trading

Min.Deposit
R 2000
Regulated.
In SA

Open Account

fusion

Min.Deposit
R 1500

Regulated.
In SA

Open Account

lmfx

Min.Deposit
R 1800

Regulated.
In SA

Open Account

Forex brokers can be broadly classified into two and the classification is based on how the brokers process orders. The two classes of Forex brokers are:

  • NDD brokers (Non-Dealing Desk)
  • Market Makers, which are also called Dealing Desk

NDD Brokers are further classified into the following:

  • An STP broker and
  • An ECN broker

Market makers

A market maker is involved in creating a virtual market for the Forex trader and also plays the role of a counter party to help fill your order by taking the opposite side of the trade. This is why many traders prefer partnering with ECN Brokers in South Africa than market makers.

The No Dealing Desks, on the other hand, do not work like the market makers; they, therefore, do not take the opposite side of your order. Rather, they connect the trader with other participants in the market. They can charge the trader a commission on each of the trades or they can apply a mark-up on the spread.

Which ECN broker is best for South African traders?

The following are the best ECN brokers you can register within South Africa

  • IC Markets
  • Hotforex
  • Tickmill
  • FXTM
  • FxPro

The Forex brokers listed above are regulated by the FSCA, FCA and ASIC. This in itself is a sign of reliability. The services provided here is transparent and reliable.

Best of the 5 Brokers offering ECN in South Africa

IC Markets

Features:

  • It is considered as the best of all the ECN Brokers in South Africa
  • It charges $7 commission per standard lot.
  • The pip spread starts from 0 pips also
  • The minimum deposit is $200
  • It is regulated by ASIC and CySEC
  • Also, you can access leverage as high as 1:500 on the platform

IC Market originates from Australia and it is also a reliable ECN broker. If you are looking for ECN Brokers here in South Africa, you should not consider any other broker aside from this.

Pros:

  • It is regulated by a top-tier regulator, which is ASIC
  • The trader can access Raw spread accounts and the trading fee is from 0 pip spread
  • The trader will have to pay $7 commission also with Raw Spread accounts
  • It is a reliable ECN broker
  • The trader will not be charged any non-trading fees also
  • There is no fee on withdrawal or deposit ad there is no inactivity fee

Cons:

  • FSCA is yet to regulate this broker
  • The trader can end up losing more than the total money deposited to his account because the broker does not offer negative balance protection

Hotforex

Features

  • The commission for major currencies on this platform is $6 per lot with Zero Account
  • The pip spread can go as low as 0 pips also
  • The minimum deposit is $200
  • Additionally, the broker is regulated by the CySEC, FCA and FSCA
  • The trader can have access to 100% deposit bonus if it is a new account with a minimum deposit of $250

This broker is an STP broker by a 100%. It is regulated by the FSCA and this makes it a reliable Forex broker to consider when searching for ECN Brokers operating in South Africa.

Pros:

  • The platform is regulated by the FSCA and this makes it safe for South African Forex traders
  • The fees are very low on the Zero Account. It can be as low as 0 pips
  • Commission on major pairs is $6, while commission on minor pairs is $8
  • Order execution is always very fast
  • New traders can access 100% deposit bonus also
  • Deposit and withdrawal will attract no fee at all

Cons:

  • The $6 commission charged per trade on Zero Account is somewhat higher than what obtains with many other ECN brokers in South Africa
  • South African customers cannot contact the customer care agents via phone call
  • However, the South African trader can access live chat or request for a call back

Tickmill

Features:

  • The commission per lot round is relatively low with Pro Account
  • The pip spread states from 0 pips
  • Also, the minimum deposit is just $100
  • Regulation of the broker occurs with FSCA, CySEC and FCA
  • Additionally, the broker offers MT4 trading platform for Webtrader, mobile and desktop

This broker is considered as a great all-round broker for those looking for ECN Brokers.

Pros:

  • The broker is regulated by FSCA and FCA and this makes it safe for South African Forex traders.
  • It offers highly competitive trading fees with Pro account, which is 0.2 pips.
  • It also charges $4 on EUR/USD standard lot.
  • There is no requite of order execution, which is very fast.
  • The trader can also access negative balance protection on the platform.
  • Furthermore, the minimum deposit is $100nand there is no funding fee at all.

Cons:

  • The trader can only access limited trading instruments.
  • Only MT4 is available, there is no MT5 or cTrader platform.

Helpful guide for a Forex trading beginner searching for ECN Brokers in South Africa

What is an ECN Broker?

An ECN Broker or an STP Broker is one that processes order directly in the market. Such a broker is also labeled as the NDD Broker, with NDD being an acronym for No Dealing Desk. The brokers do not trade against you as it is the case with market makers.

An ECN broker is known to offer low fees on each trade and they do not trade against the trader.

Check below for the distinguishing features between an STP broker and an ECN broker.

  • STP Broker: STP stands for Straight Through Processing. It is a special technology that requires no dealing desk. An STP broker will connect the trader with a liquidity provider having access to interbank network.
  • ECN Broker: ECN stands for Electronic Communication Network. The broker will permit the trader to trade with one another and this distinguishes it from an STP broker who place order with liquidity providers.

Why an ECN broker is better than a market maker

An ECN broker can be trusted for more transparency and they also charge lower fees.

Many market maker brokers are accused of trading malpractices since they take the opposite side of the traders’ calls. They are equally accused of manipulating fees and pip spreads. As a result, they put their registered traders at risk of losing money.

An ECN Broker makes use of advanced technology that removes the middleman from the trading equation. As a result, the trader is in the real market and not manipulated. Access to the real market also means that the trader can access better quotes.

You can easily come by brokers that offer a hybrid of market maker and ECN/STP. Before you register with any Forex broker, you should first find out if the broker is a pure ECN broker or a hybrid.

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