How to avoid ECN Fees: a guide to ECN Trading

If you are looking for a great ECN broker or other types with very low fees, there is no better starting point than our best forex brokers in the world listing.

With that in mind, opening an account with an ECN broker, one of the first things you may be curious about is any fees.

So, you may want to know how to avoid ECN fees. This is a point we will look at as well as how to reduce the fees you are paying and ultimately find the best ECN broker for you.

Let’s get started.

Is it possible to avoid ecn fees?

Avoiding ECN fees with an ECN broker entirely is not possible. This is because these brokers use ECN fees to keep their business going. Without these fees, an ECN broker cannot survive.

What is possible though is to lower the fees. This can be done by choosing the best ECN broker with the lowest fees in place. In that way, you are avoiding high ECN fees.

How to avoid high ECN Fees

Here is a closer look at exactly how you can avoid high ECN fees with some of our tips below.

1. Choose the right broker

The very first step as mentioned above is to choose the best broker you can. The best ECN brokers often also have the best liquidity providers. With these top liquidity providers, they can provide even better prices and fees.

2. Do not keep the trades open overnight

This cost can add up when you are trading CFDs. Rollover or overnight fees can be charged on leveraged positions that are kept open overnight. To reduce these you should try to close your positions when the market closes, or at least try not to leave several positions open for a long time.

3. Look for transparent pricing

This is a key point. Some brokers may claim to be ECN brokers but at the same time charge very high spreads and fees while providing a general lack of information. It is always best to go with the most transparent choice, particularly when it comes to costs and fees.

4. Pick a free trading platform

There are many great trading platforms that you do not have to pay to use. These include the likes of cTrader that is specifically designed with ECN trading in mind and offered by many top ECN brokers. These should take priority over any paid platforms.

5. Keep an eye on promotions

Quite often, brokers may have promotions ongoing. Of course, this depends on your broker and regulatory area, but you should look to take advantage of any additional features or benefits you can. An example here is the rebates and free VPS offered by the Pepperstone Professional Account.

What are the ECN Fees?

Here are some of the most common fees you may encounter when trading at an ECN broker.

Bid-Ask Spreads

The spread is a mark-up on the asset and a way for the broker to make money from the trade. You will find that most of the best ECN brokers start spreads from 0 pips though there will usually be a small spread of at least 0.2 pips on any major forex pair. To put it in context, 1 pip on $100,000 is around $10.

Commission per lot

Since the spreads are often most competitive with ECN brokers, you will often find them replaced by small fixed commissions per lot traded. 1 lot is $100,000 and while the commission will vary based on the pair, you can expect around $6 per lot.

Overnight Fee

The overnight fee is charged by almost all CFD brokers. This fee is charged on leveraged or CFD positions left open overnight after market closing time. It is typically minimal but can be a consideration if positions are left open for a long time.

Trading Platforms

While most of the top trading platforms like cTrader are free to use, there may be some used by certain brokers that are not free to use or that offer additional features at extra costs.

VPS Fees

Some brokers will provide the use of a VPS free of charge depending on your trading volume. In most cases though, there will be an extra cost involved.