ECN execution explained without the marketing spin
The majority of forex brokers fall into two execution models: those that take the other side of your trade and those that pass it through. The difference is more than semantics. A dealing desk broker is essentially the one taking the opposite position. A true ECN setup routes your order directly to liquidity providers — you're trading against actual buy and sell interest.
In practice, the difference shows up in three places: whether spreads blow out at the wrong moment, fill speed, and whether you get requoted. Genuine ECN execution will typically offer raw spreads from 0.0 pips but charge a commission per lot. Dealing desk brokers widen the spread instead. Both models work — it comes down to your strategy.
If you scalp or trade high frequency, a proper ECN broker is typically the better fit. The raw pricing more than offsets the per-lot fee on the major pairs.
Execution speed: what 37 milliseconds actually means for your trades
You'll see brokers advertise execution speed. Figures like "lightning-fast execution" sound impressive, but does it make a measurable difference when you're actually placing trades? It depends entirely on what you're doing.
A trader who making a handful of trades per month, a 20-millisecond difference is irrelevant. But for scalpers trading quick entries and exits, execution lag can equal money left on the table. A broker averaging under 40ms with a no-requote policy offers measurably better fills over one that averages 200ms.
A few brokers put real money into proprietary execution technology specifically for speed. Titan FX developed a Zero Point execution system designed to route orders immediately to LPs without dealing desk intervention — their published average is under 37 milliseconds. There's a thorough analysis in this Titan FX broker review.
Raw spread accounts vs standard: doing the maths
Here's a question that comes up constantly when picking their trading account: should I choose commission plus tight spreads or zero commission but wider spreads? The maths depends on your monthly lot count.
Let's run the numbers. A spread-only account might show EUR/USD at around 1.2 pips. A raw spread account gives you the same pair at 0.0-0.3 pips but applies around $3.50-4.00 per lot round-turn. For the standard account, you're paying through every trade. At moderate volume, the raw spread account works out cheaper.
Many ECN brokers offer both side by side so you can pick what suits your volume. Make sure you work it out using your real monthly lot count rather than going off hypothetical comparisons — broker examples often be designed to sell the higher-margin product.
500:1 leverage: the argument traders keep having
Leverage splits forex traders more than any other topic. Tier-1 regulators like ASIC and FCA limit retail leverage at 30:1 or 50:1 depending on the asset class. Brokers regulated outside tier-1 jurisdictions can still offer up to 500:1.
The usual case against 500:1 is simple: it blows accounts. Fair enough — statistically, the majority of retail accounts lose money. But the argument misses something important: traders who know what they're doing rarely website trade at the maximum ratio. What they do is use the option of more leverage to reduce the money tied up in open trades — leaving more funds to deploy elsewhere.
Yes, 500:1 can blow an account. No argument there. But blaming the leverage is like blaming the car for a speeding ticket. If what you trade benefits from reduced margin commitment, having 500:1 available means less money locked up as margin — and that's how most experienced traders actually use it.
Choosing a broker outside FCA and ASIC jurisdiction
Regulation in forex operates across a spectrum. The strictest tier is FCA (UK) and ASIC (Australia). You get 30:1 leverage limits, mandate investor compensation schemes, and generally restrict the trading conditions available to retail accounts. Tier-3 you've got places like Vanuatu (VFSC) and Mauritius FSA. Less oversight, but that also means higher leverage and fewer restrictions.
What you're exchanging straightforward: going with an offshore-regulated broker offers higher leverage, fewer compliance hurdles, and usually more competitive pricing. The flip side is, you sacrifice some safety net if something goes wrong. There's no compensation scheme paying out up to GBP85k.
If you're comfortable with the risk and choose performance over protection, offshore brokers are a valid choice. The important thing is doing your due diligence rather than simply checking if they're regulated somewhere. A broker with a decade of operating history under VFSC oversight may be more reliable in practice than a brand-new FCA-regulated startup.
Broker selection for scalping: the non-negotiables
If you scalp is one area where broker choice has the biggest impact. Targeting 1-5 pip moves and holding for less than a few minutes at a time. At that level, seemingly minor variations in execution speed become real money.
What to look for is short: raw spreads from 0.0 pips, fills consistently below 50ms, a no-requote policy, and explicit permission for scalping and high-frequency trading. Some brokers claim to allow scalping but add latency to orders when they detect scalping patterns. Look at the execution policy before depositing.
Platforms built for scalping tend to make it obvious. They'll publish execution speed data somewhere prominent, and they'll typically throw in VPS access for automated strategies. If the broker you're looking at is vague about 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 few years. The pitch is simple: identify someone with a good track record, copy their trades without doing your own analysis, collect the profits. In practice is messier than the advertisements make it sound.
The main problem is the gap between signal and fill. When the trader you're copying executes, your copy goes through with some lag — when prices are moving quickly, that lag transforms a profitable trade into a losing one. The more narrow the profit margins, the worse this problem becomes.
Having said that, certain copy trading setups are worth exploring for people who can't develop their own strategies. The key is finding platforms that show verified performance history over no less than a year, rather than demo account performance. Risk-adjusted metrics are more useful than headline profit percentages.
Some brokers have built proprietary copy trading integrated with their standard execution. This can minimise latency issues compared to external copy trading providers that connect to MT4 or MT5. Look at whether the social trading is native before assuming the results will carry over to your account.