To ECN or not to ECN.....

[MisterAudio]

Alright...so it's like this...

I am trying to decide between an ECN or standard account. I was planning on start with $10000, but lets just assume the minimum of $1000 to put some stress on the accounts.

From the way everything is promoted, the ECN seems to be a better account all around for any reason. I trade fairly frequently. I do a mix of long-term, mid-term, short-term and scalping with my trades. I trade EURUSD, GBPUSD, AUDUSD, USDCAD, USDCHF, NZDUSD, EURGBP, EURCHF, GBPCHF. I have demo-ed both standard and ECN accounts to see the actual margins. I noticed on the ECN, for some of the pairs, the spread is much lower, and for some, it is noticeably higher (I consider anything over 6pip too wide for my taste). From what I can tell, the "commission cost" for trades in standard vs ECN seem to be about the same either way I go. i have not had any problems with requotes or rejected orders on either platform. And I have used EAs from time to time on both.

So...with all this information....is there any reason I should go with ECN, or any reason I should go with a standard account?
Far as I can tell, I am getting the same performance from both. Maybe I am just lucky, or good, or just not very risky....but I haven't been able to tell hardly any difference.

Thank you for any input!

[FXOjafar]

If you are going in with just $1000, I say stick to a standard account. $5000 is a better starting point for an ECN account. ECN offers better conditions than market maker accounts in many ways, but the best is the instant execution, transparency and the low spreads making technical trading more pleasurable.

[MisterAudio]

Thanks for the response. Well, the $5000 is well below the $10,000 point I plan to begin with, so that puts one point against the standard and one up for the ECN. I have not had any problems with getting orders filled so far, but I have seen several comments about others being quite impressed at the execution speed. So i am assuming that will be much more noticeable when the market is moving much faster. As I have figured the commission on the ECN platform, it generally equates to approximately one pip (little more or less depending on the pair traded). With that in mind, to over come the spread movement necessary to go in the money plus exceed the commission cost to be profitable on the trades, It ends up working out to be approximately the same either way....except in near break-even conditions. A trade would always need to be at least 2 pips in-the-money for it to safely overcome commission costs, which hopefully would never be an issue. For instance, earlier I saw a 0.7 spread on the EURUSD and have seen someone state in another post the com cost is about $9 for the EURUSD on 1 lot. So that equates to 0.9 pip. That gives me an equivalent spread of 1.6. but there have also been times I have seen the spread go up to 1.7, so that would equate to a spread of 2.6. so to be on the safe side, I would need to generally assume a 3 pip spread to cover the commission fee and actual spread to calculate profit from a EURUSD trade. Granted, very few of my trades have been fewer than 5 pips in-the-money, so this is not so much of a deal to me. It would be a matter of seeing how much the spread is higher or lower over time. A good for instance would be right now. It is the middle of the asian market time span. The EURUSD is staying consistently over 1 pip, and from what I remember of earlier in the US market, it was over 1 pip about 50% if the time. The market has had a low volume today though, so this is not a good indicator of the normal spread for the EURUSD. Anyway..enough on that....
The transparency I do like quite a lot. I have seen several time trading with other companies when I had orders in place and the market passed by them without getting filled, or having stops set well away from the current price levels only to see the market suddenly spike and stop out an order, with no actual overall price movement. I am very much against market accounts because of this. I am not saying that FXOpen is a company that does stop hunting. I am saying that I have experienced it with other companies. I do believe the market spikes every once in a while, but i find it hard to believe the market moves 25 points and returns to where it was previously, in a fraction of a second, while there is a high volume being traded. So I like ECN over market for that without a doubt.

So, overall, I am leaning more toward ECN. You mentioned that there are other ways the ECN is better than market. Would you mind explaining some of those? Maybe this might help some other potential clients decide on their accounts too. And thanks for the information.

[dennerle]

Thanks for the response. Well, the $5000 is well below the $10,000 point I plan to begin with, so that puts one point against the standard and one up for the ECN. I have not had any problems with getting orders filled so far, but I have seen several comments about others being quite impressed at the execution speed. So i am assuming that will be much more noticeable when the market is moving much faster. As I have figured the commission on the ECN platform, it generally equates to approximately one pip (little more or less depending on the pair traded). With that in mind, to over come the spread movement necessary to go in the money plus exceed the commission cost to be profitable on the trades, It ends up working out to be approximately the same either way....except in near break-even conditions. A trade would always need to be at least 2 pips in-the-money for it to safely overcome commission costs, which hopefully would never be an issue. For instance, earlier I saw a 0.7 spread on the EURUSD and have seen someone state in another post the com cost is about $9 for the EURUSD on 1 lot. So that equates to 0.9 pip. That gives me an equivalent spread of 1.6. but there have also been times I have seen the spread go up to 1.7, so that would equate to a spread of 2.6. so to be on the safe side, I would need to generally assume a 3 pip spread to cover the commission fee and actual spread to calculate profit from a EURUSD trade. Granted, very few of my trades have been fewer than 5 pips in-the-money, so this is not so much of a deal to me. It would be a matter of seeing how much the spread is higher or lower over time. A good for instance would be right now. It is the middle of the asian market time span. The EURUSD is staying consistently over 1 pip, and from what I remember of earlier in the US market, it was over 1 pip about 50% if the time. The market has had a low volume today though, so this is not a good indicator of the normal spread for the EURUSD. Anyway..enough on that....
The transparency I do like quite a lot. I have seen several time trading with other companies when I had orders in place and the market passed by them without getting filled, or having stops set well away from the current price levels only to see the market suddenly spike and stop out an order, with no actual overall price movement. I am very much against market accounts because of this. I am not saying that FXOpen is a company that does stop hunting. I am saying that I have experienced it with other companies. I do believe the market spikes every once in a while, but i find it hard to believe the market moves 25 points and returns to where it was previously, in a fraction of a second, while there is a high volume being traded. So I like ECN over market for that without a doubt.

So, overall, I am leaning more toward ECN. You mentioned that there are other ways the ECN is better than market. Would you mind explaining some of those? Maybe this might help some other potential clients decide on their accounts too. And thanks for the information.

FXOpen ECN Marketplace FXOpen Market Maker Details
CLIENT ANONYMITY YES NO When an order is sent to the ECN, there is no Account data passed along.
ORDER MATCHING YES NO ECN matches your orders with other clients, banks and any other ECN participants.
RE-QUOTES NO YES ECNs do not have re-quotes, a market order will receive the best price available; there is no set slippage that you can control.
DEPTH OF MARKET DISPLAY YES NO ECNs allow the client to view the market depth
PENDING ORDER LIMITATIONS NO YES ECNs allow limit orders to be placed within the spread limitations that Market Maker does not allow. (This comprises the market depth)
TRADING ECONOMIC RELEASES DEPENDENT ON PARTICIPANTS YES Although you may receive re-quotes during economic data when FXOpen is acting as the Market Maker, ECN relies on its participants to fill its book, illiquidity can occur during releases.
VOLUME AVAILABLE AT REQUESTED PRICE NO YES ECNs will have various available volume, at different prices, in its market depth; As a Market Maker, FXOpen, will almost always fill orders at requested prices contingent that the market is still trading at that price.

[MisterAudio]

Okay. So it pretty well sounds like any other ECN out there. I was hoping that FXOpen would have a greater liquidity pool than most other institutions. I have been trading through F.X.C.M. and they do seem to have an excellent liquidity pool available. I just despise the pricks in the NFA thinking that they need to go and change the way everything has been done for many years. So, I am finally fed-up with the NFA's imposition on US-based citizens. So, I have been looking for a good brokerage that the NFA cannot regulate. FXOpen looks to be a good choice so far. Just trying to get some more informative information than what is readily available.

[FXOpen Manager]

Okay. So it pretty well sounds like any other ECN out there. I was hoping that FXOpen would have a greater liquidity pool than most other institutions. I have been trading through F.X.C.M. and they do seem to have an excellent liquidity pool available. I just despise the pricks in the NFA thinking that they need to go and change the way everything has been done for many years. So, I am finally fed-up with the NFA's imposition on US-based citizens. So, I have been looking for a good brokerage that the NFA cannot regulate. FXOpen looks to be a good choice so far. Just trying to get some more informative information than what is readily available.

Hello MisterAudio,
We are increasing our list of liquidity providers which will make spreads more tight and execution better. Also, I am pretty sure that our company providing one of the best MT4 based ECN services on the market.

[MisterAudio]

Alright, this has taken quite a lot of research, but I have found my deal breaker answer. ECN is better. This is a generalized statement of course. This is based on the way the industry operates as a whole. When using market maker dealing, sometimes the brokers will take up opposing positions, and when you lose (and you are insane if you expect that you won't) they make more money of of you. Now, not all brokers do this, and even the ones who do are not going to do it on every trade. With ECN, if it is true ECN, they can't do this because they would need to manipulate the spread. They make money by the side commission, which means they don't need to care at all whether or not you win or lose. They win always.

So....ECN is better always. There are lots of times when the effective spread (actual spread + commission) is higher in ECN than market maker, but the extra .5 or so pips is basically your insurance policy that the broker will never be working against you and you will be making them happy with a guaranteed income. Which in-turn makes everyone happy.

[mynor5535101]

I have just open an ECN account but i cannot login...The status is no connection...Then i try to log in using Investor Pasword but the status is no Conection....Then I simply put a wrong password...But the status is no conecction...My ECN Demo account can log IN...so what is the problem..?

[nonamer]

I have just open an ECN account but i cannot login...The status is no connection...Then i try to log in using Investor Pasword but the status is no Conection....Then I simply put a wrong password...But the status is no conecction...My ECN Demo account can log IN...so what is the problem..?

Hi,

The possible reason here why you get no connection, because you internet connection are not stable to reach our server even you can connect to our demo account. Each account are using different server.
I suggest try use another internet connection or you can mention by message me you account number with investor password to let me try to login from here.
Try using command prompt to trace out where you have lost connection to ecn live server. . tracert ecn.fxopen.com
Where you connected the internet now ? Home or offices ?

thanks

[mynor5535101]

Hi,

The possible reason here why you get no connection, because you internet connection are not stable to reach our server even you can connect to our demo account. Each account are using different server.
I suggest try use another internet connection or you can mention by message me you account number with investor password to let me try to login from here.
Try using command prompt to trace out where you have lost connection to ecn live server. . tracert ecn.fxopen.com
Where you connected the internet now ? Home or offices ?

thanks

Hi
Tracing route to ecn.fxopen.com 173.193.249.235 over the maximum of 30 hops

1) 219.93.218.177
2)Requset time out
.
.
.
.
.
.
30)Request time out

Trace complete

[nonamer]

Hi
Tracing route to ecn.fxopen.com 173.193.249.235 over the maximum of 30 hops

1) 219.93.218.177
2)Requset time out
.
.
.
.
.
.
30)Request time out

Trace complete

Hi,

It seem you internet connection are not stable to reach our server, i suggest please try login you account using other internet connection. I dont see any problem to login ECN demo or ECN live account. If you get no connection then our main server are in good condition/dont have problem that mean the problem are on your side.
The best way, try use another laptop to login you trading account and also make a test with other internet connection.

Thanks

[mynor5535101]

Hi,

It seem you internet connection are not stable to reach our server, i suggest please try login you account using other internet connection. I dont see any problem to login ECN demo or ECN live account. If you get no connection then our main server are in good condition/dont have problem that mean the problem are on your side.
The best way, try use another laptop to login you trading account and also make a test with other internet connection.

Thanks

I have sent you a private msg...Can you do me a favour.....can you ask your IT deparment to check my problem.

[nonamer]

I have sent you a private msg...Can you do me a favour.....can you ask your IT deparment to check my problem.

Hi

i already make a test,
with winxp i can login without problem.
with win7 i also get same result as you get- no connection.
so the solution please use this ip address type on the server name -->
173.193.249.235

Its working for me ..hope can work with you too


Thanks

[mynor5535101]

Hi

i already make a test,
with winxp i can login without problem.
with win7 i also get same result as you get- no connection.
so the solution please use this ip address type on the server name -->
173.193.249.235

Its working for me ..hope can work with you too


Thanks

Yesss .... Problem solve by typing server name 173.193.249.235

[pppfund]

ECN for the win!

I've been using them for months and it's definitely way cheaper than the spread of standard account.