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Forex traders in South Africa looking to minimise brokerage choose ECN brokers with a true ECN account having no dealing desk resulting in the lowest EUR/USD spreads, reduced slippage with faster STP execution speeds reduced conflict of interest from an ECN forex broker.
Compare the top ECN brokers in South Africa below.
By Justin Grossbard / Updated: Thursday, January 30th, 2020
evaluated the top 5 Best ECN Forex Brokers in South Africa 2020 with no dealing desk NDD intervention:
Pepperstone Best Forex Trading Platforms
IC Markets The Lowest EUR/USD Spreads
FXTM The Highest ECN Trading Leverage
IG Markets The Largest ECN Foreign Exchange Broker
No Commission Account Spreads From (EUR/USD):
The overall rating is based on review by our experts
IC Markets is atrue ECN brokeroffering the lowest EUR/USD spreads that can go as low as 0.0 pips. Retail traders in South Africa can benefit from the lowest spreads in the world only if they opt for the IC Markets Raw Spread trading account types. At the same time, our team of industry experts found that the average EUR/USD spread is 0.1 pips.
ECN forex brokers use an execution model that can provide several advantages, including:
On average, 62% of the time IC Markets offers EUR/USD spread equal to 0.0 pips (data compiled from 01 January 2019 to 08 August 2019)
IC Markets process your orders in 36.5 milliseconds
There is no conflict of interest between SA retail traders and IC Markets
Our devoted team of investing professionals hand-checked all forex brokers in South Africa that offers ECN trading accounts. Throughout a meticulous examination, we found that IC Markets advantages are superior. Below were going to list the advantages that come with an ECN account.
To compare the spread among the top forex brokers in South Africa, read our full review here:Low Spread Forex Brokers in South Africa.
IC Markets offer institutional grade ECN trading from the worlds leading institutions. The ECN pricings are derived from a diverse pool of 25 liquidity providers you can trade on. The institutional grade liquidity offered by ECN brokers can offer the following advantages:
IC Markets can offer the best forex quotes because its data feed servers and order machine engines are co-located in the worlds largest financial data centres:
The combination of the worlds major financial centres located in New York and London allows IC Markets to process over half a million orders per day. The secure fibre optic cable that connects IC Markets price matching engine with the ECN Liquidity Providers LP translates into the following advantages:
(trade size up to 200 standard lots or 25 million base currency)
(High-Frequency Trading HFT accounts for 60% of all IC Markets trades)
IC Markets is also equipped with the latest technologies in terms of the trading tools offered to its clients. The most advanced trading tools offered by IC Markets are listed below:
(Depth of Market DoM shows several levels of bids and offers volume)
(Allows retail traders to place orders inside the spread, which is good for scalping)
IC Markets intermediates transactions between retail clients and the interbank market that is worth over $15 billion daily. Additionally, this online Forex CFD provider is regulated by the most important Forex regulatory bodies, including the ASIC, CySEC and the FSA. Forex traders can trade with no restrictions and with the peace of mind that they are using one of the best ECN forex brokers. Click the button below to claim your FREE demo account.
To compare the spread among the top forex brokers in South Africa, read our full review here:Low Spread Forex Brokers in South Africa.
Our best-in-industry methodology of ranking the best online platform revealed that FXPro offers the best WebTrader platform. FxPro is authorized and regulated through a total of 33 well-established financial watchdogs, including the FSCA, CySEC and FCA. South African traders can choose between a wide range of desktop, web-based, tablet and mobile trading platforms, including:
FxPro offers the option to trade from your browser for both PC and MAC. The browser-based trading platform allows SA traders to trade 7 different CFD asset classes with no dealing desk execution, including:
Our team of industry experts will outline below the advantages that come with the FxPro price execution model. Our team examined the key features of the FxPro ECN model including the:
Not many ECN brokers can boost an average order execution speed of 11.06 milliseconds. FxPro advanced trading technology is able to execute up to 7,000 client orders per second. In its best day, FxPro managed to fill 199,397 of client orders.
FXPro has industry recognition for its impeccable trading conditions and its no-dealing desk NDD model. FxPro won over 70 international awards since 2006 when it started providing financial services to retail clients. The most prestigious awards include:
Best FX Execution Global in 2016, 2017 Awards)
Best Execution Broker Global in 2017 (Global Brands Magazine)
Best FX Provider in 2019 (Online Personal Wealth Awards)
The secret behind FxPro ECN (Electronic Communication Network) execution model relies on its deep network of liquidity providers. The deep liquidity provides SA traders with tight bid and ask spreads.
FxPro order-matching technology is able to achieve superior trading conditions for South African residents. We assessed all aspects of their execution engine and found the following advantages:
65% of client orders are executed at the requested price
81% of client orders received positive slippage
53% of client orders received negative slippage
Trading forex through ECN forex brokers it also means reduced requotes. FxPro only rejected a small portion of their client orders. Around 1.40% of orders received a requotes among which 0.72% of orders received improved prices. Overall, 98.60% of the orders received no requote.
Please note that while FxPro isnt the counterparty of your trades, client orders are matched internally against other market participants. This is the reason why FxPro cant be classified among true ECN brokers. At the same time, FxPro cant be classified among market maker brokers either because they act as an intermediary between forex traders and liquidity providers.
For a full comparison of the best forex trading platforms for South African traders please read our unbiased review here:Best Forex Broker for Each FX Platform.
FXTM is another ECN regulated broker offering SA residents access to the forex market with unbeatable leverage of 1000:1. If you want to find an ECN broker with high leverage, then ForexTime FXTM can satisfy your trading needs. Leverage is a critical component when trying to trade on the small price changes in the foreign exchange market. With so many ECN forex brokers to choose from, its important to consider the regulatory status and the safety of your funds. FXTM is given permission to provide financial services by the following regulatory bodies:
Financial Sector Conduct Authority (FSCA) of South Africa, with FSP No. 46614.
International Financial Services Commission (IFSC) of Belize with License numbers IFSC/60/345/TS
Financial Conduct Authority (FCA) of the UK under FCA licence no. 777911
Cyprus Securities and Exchange Commission (CySEC) of Cyprus under license number 185/12
Note* for our ECN forex brokers review, our team of industry experts only rated regulated brokers. See the complete list of the bestFSCA regulated forex brokers in South Africa.
The advantages of an ECN trading account are significant. FXTM offers 3 different ECN-style account types:
ECN Zero Account (zero-commission trading, but mark-ups the spread)
ECN Account (low commission trading from $4 per side)
FXTM Pro Account (ultra-tight spreads starting from 0.0 pips, No-last look policy)
All of the FXTM ECN accounts come with high flexible leverage, a swap-free option available, scalpers friendly, no requotes and fast order execution of 53 milliseconds. The following leverage comparison table highlights the highest ECN trading leverage offered by forex brokers in South Africa.
FXTM range of ECN trading accounts offers South African residents the flexibility to choose a trading environment that suits best their trading style. Additionally, FXTM has made a good impression in our proprietary scoring system for ranking online forex brokers due to the following features:
IG Group is the worlds number one CFD provider that is FSCA regulated. Additionally, the ECN trading environment offered by IG is also supervised by regulatory entities from the UK, Australia and even the USA. IG has provided financial services to retail clients and professional traders since 1974. As of today, over 178.000 clients from across five continents are trading with IG across 16,000 different financial instruments, including:
Our team of forex industry experts will give you a quick overview of the forex direct market access (DMA) that IG offers to its clients.
The DMA trading account gives South African traders direct access to the interbank market without the need for a middleman. The forex DMA advantages include:
Dealing directly with other market participants
FX prices derived from a large liquidity pool that is connected to multiple tier one banks
IG doesnt charge you the spread, but SA traders would need to pay a commission. IG commission is based on the volume traded in the last month. If South African traders are doing less than 100 million in volume the commission charged is $6 per standard lot or $60 per million traded. The round-turn commission would be $120 per million traded. In the chart below, you can review the different levels of the commission charged by IG.
IG offers retail traders a trusted ECN account style with an extensive list of financial instruments, competitive spreads and modern trading platform solution. The L2 Dealer platform is IGs proprietary trading platform that has no dealer intervention and prices directly from the interbank market. South African residents can trade with IG Forex Direct with a minimum deposit of Rand 4,000. Click below to view the complete list ofTop 5 Forex Brokers with ZAR Accounts.
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A true ECN (Electronic Communications Network) broker is a type of forex broker that connects its clients directly to the interbank market through its liquidity providers. A true ECN broker operates under the No Dealing Desk NDD execution model without manual intervention from a dealer.
Pepperstone is a true ECN broker because it connects its clients to over 22 different liquidity providers via its own proprietary aggregation engine. Pepperstone acts as the middleman between its retail clients and the interbank market. Pepperstone is fully transparent about its ECN trading model and its total devotion to using No Dealing Desk NDD intervention.
Unlike a market maker which charges a spread to make money, the ECN broker charges a commission. The advantage of paying a commission is that there is no dealers marked-up spread. Retail traders will receive the interbank spread without mark-ups.
There are various types of brokerage houses in the world, but broadly speaking, there are only two forex broker types:
A dealing desk broker is also known as a market maker or in the Forex jargon is also known as a bucket shop. As the name suggests, a dealing desk broker acts as a market maker and feeds you the forex quotes retail traders trade on. With the DD execution model, the broker will act as the counterpart of all your trades. This implies a conflict of interest as the forex broker will make a profit each time you lose on your trades.
The no dealing desk execution model is the solution to avoid trading against your broker. The ECN brokers are a type of no dealing desk brokers that will give retail traders direct access to the foreign exchange market. With the ECN execution model, your orders will be forwarded automatically to the interbank market. All forex orders are matched against various liquidity providers LP, eliminating the conflict of interest between the broker and the trader.
Our team of industry experts will reveal the top 3 advantages of a true ECN broker:
No spread manipulation (no markups or markdown)
Reduced slippage (due to a wide network of liquidity providers)
No requotes (you will often get the most favourable price available)
Risk Warning: Additionally to the inherent high risk that comes to Forex trading, the total costs that come with an ECN account can be high. Make sure you choose an ECN broker with competitive fees and commissions.
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