FBS Account Types: A Simple Guide for Beginners

An STP system can select from multiple sources within its liquidity pool to execute trades; conversely, an ECN acts as a hub that interconnects banks, hedge funds, and other big-time market players. Thus, it is no surprise that the ECN has become one of the most crucial sources of liquidity for traders in the Forex markets. By using an STP broker, the company serves as a quiet connection between traders and the market rather than acting as a dealing desk. One of the advantages of working with an STP Broker is ‘DMA’, or Direct Market Access. This means that orders are routed directly to their liquidity pool so clients can get access to fill them at the best prices, plus any small markup spread by brokers. Fundamentally, the real ECN account matches and executes orders without placing premiums on the raw spread.

Your order is matched using an electronic computer network, or ECN. Consider the ECN as a liquid market where buy and sell orders are matched with partners. Your request is scanned via the extensive database and is quickly matched. Through their dealing desk operation, your NDD broker doesn’t tamper with your order. Your orders won’t be delayed, grouped, or otherwise manipulated to boost their bottom line profitability. Rates, terms, products and services on third-party websites are subject to change without notice.

Forex Standard Account vs ECN Account

Transparency, fairness, speed of execution, and the lower cost of each trade are just some advantages. Choose an account type that meets your needs by weighing all your options. The most competitive spread is used for marketing purposes but spreads will vary between currency pairs. Higher limits will probably be necessary if you want to open a specialty account that provides you access to retirement products, margin trading, or managed portfolios.

This however comes with a major catch and that is that you need to have equity of over $500,000 in your account and be trading volumes of 150 or 250 million. Without meeting these condition, you are better to select a broker with tight spreads and commission cost that don’t rely on the amount of equity or volume you trade. We feel the big weakness with FXTM is the lack of transparency with their spreads, it would be good if we could compare them with other brokers who do advertise their spreads.

Which account should new traders use?

Most STP brokers have access to internal liquidity pools comprised of different liquidity providers who compete against each other for better spreads on broker orders. The main advantage of an ECN account is that it provides traders with direct access to the interbank market, which can result in tighter spreads and more transparent pricing. Additionally, ECN accounts typically offer faster trade execution times and greater transparency, as trades are executed directly between market participants rather than through a middleman.

Only by introducing new clients to FBS according to certain procedures, traders can earn extra income. Overall, the FBS micro account is quite similar to the cent account with the major differences coming in the available leverage, type of spread, and minimum deposit. ECN pricing includes a lower spread, but a commission is charged on all trades and transactions.

ECN vs. Standard Account

True ECN stands for Electronic Communication Network and it means that commuters are connected. It may seem like it is quite a broad term but when it comes to Forex trading, it seems quite ecn account vs standard advantageous. In trading, there are various bids and networks available out there. You can see that purchasing, as well as selling, can be done at the same price but with a commission.

• On the other hand, cent accounts have even smaller contract sizes, usually 1 cent lot equaling 100 units of the base currency.
• If you’re worried about the type of broker, the only time you should really care is if you’re a reseller.
• This format can coexist as a hybrid with the ECN execution model, with which it is often confused.
• CTrader tends to be more specialised in forex, so if you are looking to trade a variety of CFDs then MT5 could be your best option.
• With IC markets you can use the following methods to fund your accounts, and the transfer will almost always be instant.

Since there is no limit set by the regulator that the broker can offer, leverage is significantly higher than in the UK and Europe. Instead of set leverage for each financial instrument, you trade, FXTM uses scaled leverage which means the bigger your position, the lower the leverage you can use. MetaTrader 5 is an upgrade on MT4, it offers all the features MT4 offers and more. However, it is interesting to note that while MT5 is capable of offering a wider range of markets for trading than MT4, FXTM actually allows trading with more products when using MT4 than MT5.

The Difference between an ECN and a Standard Account

This information helps clients know they have quick trade execution even with the additional step of using liquidity providers to fill trades. When I trade with a Dealing Desk broker, the broker decides the price and spread, meaning I trade the broker’s specific prices. This leads some traders to believe there is a greater chance of price manipulation by the broker and potentially less fair market conditions.

This makes it easier to place traders with a Dealing Desk broker, but traders miss out on some very small price fluctuations they may want to trade. It appears highly interactive, incredibly user-friendly, and quite easy to set up. I’ve done extensive research on them because they’ve been gaining a lot of attention lately. Honestly, it seems like this broker has all the essential elements for traders to create the perfect trading environment for themselves. Considering the overall number of account types of the broker this guide is definitely a helpful thing for newbies. I was very curious about what to choose in fbs and finally I have found something that is as useful as it can get.

MetaTrader 4 (MT

To conclude, the main thing as a trader is to define your trading goals clearly as this will make it easier for you to choose which account types will suit you best. Dealing desk or DD brokers represent legitimate brokers who make money through spreads, provide liquidity, and have “money makers” licenses. These brokers (the majority of brokers) usually can take the opposite side of traders’ trades. They can offer artificial quotes and orders that are filled on a discretionary basis. As IC Markets have no dealing desk, no requotes and do not hedge your position, the spreads passed onto you are ‘raw’. In other words, IC Markets are providing you with the very best spreads liquidity providers are willing to offer.