The difference between ECN and market maker execution
The majority of forex brokers fall into one of two categories: dealing desk or ECN. This isn't just terminology. A dealing desk broker is essentially your counterparty. ECN execution routes your order straight to the interbank market — you get fills from genuine liquidity.
For most retail traders, the difference matters most in three places: whether spreads blow out at the wrong moment, execution speed, and whether you get requoted. Genuine ECN execution will typically offer raw spreads from 0.0 pips but add a commission per lot. Market makers pad the spread instead. There's no universally better option — it hinges on what you need.
If you scalp or trade high frequency, ECN execution is generally worth the commission. The raw pricing compensates for paying commission on high-volume currency pairs.
Fast execution — separating broker hype from reality
Every broker's website mentions fill times. Numbers like "lightning-fast execution" sound impressive, but does it make a measurable difference in practice? More than you'd think.
For someone executing longer-term positions, the gap between 40ms and 80ms execution won't move the needle. If you're scalping 1-2 pip moves working quick entries and exits, execution lag can equal worse fill prices. Consistent execution at 35-40 milliseconds with zero requotes offers noticeably better entries versus slower execution environments.
Some brokers built proprietary execution technology specifically for speed. One example is Titan FX's Zero Point technology designed to route orders directly to LPs without dealing desk intervention — they report averages of under 37 milliseconds. There's a thorough analysis in this review of Titan FX.
Raw spread accounts vs standard: doing the maths
This ends up being something nearly every trader asks when setting up their trading account: is it better to have a commission on raw spreads or markup spreads with no fee per lot? It varies based on how much you trade.
Here's a real comparison. A standard account might offer EUR/USD at 1.0-1.5 pips. A commission-based account gives you true market pricing but charges a commission of about $7 per standard lot round trip. For the standard account, you're paying through the spread on each position. At moderate volume, ECN pricing is almost always cheaper.
Many ECN brokers offer both as options so you can pick what suits your volume. What matters is to calculate based on your actual trading volume rather than going off the broker's examples — those often be designed to sell the higher-margin product.
500:1 leverage: the argument traders keep having
The leverage conversation polarises forex traders more than most other subjects. Regulators limit leverage to relatively low ratios for retail accounts. Brokers regulated outside tier-1 jurisdictions continue to offer up to 500:1.
The standard argument against is simple: inexperienced traders wipe out faster. Fair enough — statistically, traders using maximum leverage do lose. But the argument misses a key point: professional retail traders rarely trade at the maximum ratio. They use the option of high leverage to minimise the margin locked up in open trades — freeing up margin for additional positions.
Obviously it carries risk. Nobody disputes that. But that's a risk management problem, not a leverage problem. If what you trade needs reduced margin commitment, having 500:1 available frees up margin for other positions — which is the whole point for anyone who knows what they're doing.
VFSC, FSA, and tier-3 regulation: the trade-off explained
Regulation in forex operates across different levels. At the top is FCA, ASIC, CySEC. Leverage is capped at 30:1, mandate investor compensation schemes, and put guardrails on how aggressively brokers can operate. On the other end you've got the VFSC in Vanuatu and Mauritius (FSA). Fewer requirements, but the flip side is higher leverage and fewer restrictions.
The trade-off is real and worth understanding: tier-3 regulation offers 500:1 leverage, fewer account restrictions, and usually cheaper trading costs. The flip side is, you get less investor protection if the broker fails. You don't get a compensation scheme equivalent to FSCS.
For traders who understand this trade-off and prefer performance over protection, tier-3 platforms are a valid choice. The key is doing your due diligence rather than simply reading the licence number. A platform with a long track record and no withdrawal issues under tier-3 regulation can be more trustworthy in practice than a freshly regulated broker that got its licence last year.
Broker selection for scalping: the non-negotiables
Scalping is the style where broker choice matters most. When you're trading small ranges and keeping positions for seconds to minutes. In that environment, even small gaps in execution speed equal the difference between a winning and losing month.
What to look for comes down to a few things: raw spreads from 0.0 pips, execution in the sub-50ms range, zero requotes, and the broker allowing scalping strategies. A few brokers say they support scalping but slow down orders if you trade too frequently. Look at the execution policy before depositing.
ECN brokers that chase this type of trader will make it obvious. Look for their speed stats disclosed publicly, and usually offer VPS hosting for EAs that need low latency. If a broker avoids discussing their execution speed anywhere on their site, that tells you something.
Copy trading and social platforms: what works and what doesn't
Copy trading has become popular over the past few years. The concept is straightforward: identify traders who are making money, replicate their positions in your own account, collect the profits. In reality is less straightforward than the marketing make it sound.
The biggest issue is execution delay. When the trader you're copying enters a trade, your copy executes after a delay — when prices are moving quickly, those extra milliseconds transforms a profitable trade into a worse entry. The tighter the strategy's edge, the more the lag hurts.
Despite this, a few implementations work well enough for traders who don't want to monitor charts all day. Look for transparency around real performance history over at least a year, instead helpful hints of simulated results. Looking at drawdown and consistency tell you more than headline profit percentages.
Certain brokers have built in-house social platforms within their standard execution. This can minimise latency issues compared to standalone signal platforms that bolt onto MT4 or MT5. Research the technical setup before trusting that historical returns can be replicated in your experience.