The difference between ECN and market maker execution
Most retail brokers fall into two execution models: market makers or ECN brokers. This isn't visit this just terminology. A dealing desk broker becomes the other side of your trade. ECN execution routes your order directly to the interbank market — your orders match with actual buy and sell interest.
For most retail traders, the difference matters most in three places: whether spreads blow out at the wrong moment, fill speed, and order rejection rates. A proper ECN broker tends to deliver tighter pricing but charge a commission per lot. Dealing desk brokers pad the spread instead. Neither model is inherently bad — it comes down to how you trade.
If you scalp or trade high frequency, a proper ECN broker is typically the right choice. Getting true market spreads makes up for the commission cost on most pairs.
Why execution speed is more than a marketing number
Every broker's website mentions fill times. Figures like sub-50 milliseconds sound impressive, but does it make a measurable difference for your trading? It depends entirely on what you're doing.
A trader who executing longer-term positions, the gap between 40ms and 80ms execution won't move the needle. If you're scalping 1-2 pip moves targeting tight ranges, every millisecond of delay means worse fill prices. If your broker fills at in the 30-40ms range with no requotes provides measurably better fills over one that averages 200ms.
Some brokers built proprietary execution technology that eliminates dealing desk intervention. Titan FX, for example, built their Zero Point execution system which sends orders immediately to LPs without dealing desk intervention — they report averages of under 37 milliseconds. For a full look at how this works in practice, see this Titan FX broker review.
Commission-based vs spread-only accounts — which costs less?
Here's the most common question when choosing a broker account: should I choose commission plus tight spreads or a wider spread with no commission? The maths depends on how much you trade.
Take a typical example. A spread-only account might offer EUR/USD at 1.1-1.3 pips. A commission-based account gives you 0.1-0.3 pips but adds roughly $3-4 per lot round-turn. On the spread-only option, the cost is baked into the markup. At 3-4+ lots per month, the commission model is almost always cheaper.
Most brokers offer both account types so you can see the difference for yourself. The key is to calculate based on your actual trading volume rather than trusting hypothetical comparisons — they usually favour whichever account the broker wants to push.
500:1 leverage: the argument traders keep having
Leverage polarises retail traders more than almost anything else. The major regulatory bodies limit leverage to relatively low ratios for retail accounts. Offshore brokers can still offer up to 500:1.
The usual case against 500:1 is simple: it blows accounts. This is legitimate — the data shows, most retail traders end up negative. The counterpoint is nuance: professional retail traders rarely trade at full leverage. What they do is use the option of more leverage to reduce the money tied up in open trades — freeing up margin to deploy elsewhere.
Yes, 500:1 can blow an account. No argument there. The leverage itself isn't the issue — how you size your positions is. When a strategy requires reduced margin commitment, the option of higher leverage means less money locked up as margin — and that's how most experienced traders actually use it.
Offshore regulation: what traders actually need to understand
The regulatory landscape in forex falls into a spectrum. At the top is regulators like the FCA and ASIC. They cap leverage at 30:1, mandate investor compensation schemes, and generally restrict what brokers can offer retail clients. Tier-3 you've got places like Vanuatu (VFSC) and similar offshore regulators. Lighter rules, but which translates to higher leverage and fewer restrictions.
What you're exchanging not subtle: tier-3 regulation offers more aggressive trading conditions, less trading limitations, and often more competitive pricing. In return, you have less investor protection if something goes wrong. You don't get a regulatory bailout like the FCA's FSCS.
Traders who accept this consciously and prefer execution quality and flexibility, offshore brokers can make sense. The important thing is checking the broker's track record rather than just checking if they're regulated somewhere. An offshore broker with a long track record and no withdrawal issues under VFSC oversight can be a safer bet in practice than a freshly regulated tier-1 broker.
Broker selection for scalping: the non-negotiables
If you scalp is the style where broker choice makes or breaks your results. You're working small ranges and staying in positions for seconds to minutes. With those margins, seemingly minor differences in spread translate directly to real money.
The checklist is short: 0.0 pip raw pricing from 0.0 pips, execution in the sub-50ms range, a no-requote policy, and no restrictions on scalping strategies. Certain platforms say they support scalping but slow down fills for high-frequency traders. Look at the execution policy before committing capital.
ECN brokers that chase this type of trader usually say so loudly. You'll see average fill times on the website, and they'll typically throw in VPS access for running bots 24/5. If a broker doesn't mention their execution speed anywhere on their marketing, that's probably not a good sign for scalpers.
Social trading in forex: practical expectations
Social trading has become popular over the past several years. The pitch is simple: identify traders who are making money, copy their trades without doing your own analysis, collect the profits. In practice is messier than the advertisements imply.
The biggest issue is execution delay. When the lead trader enters a trade, your copy goes through milliseconds to seconds later — and in fast markets, that lag can turn a profitable trade into a worse entry. The smaller the profit margins, the worse the lag hurts.
That said, certain implementations work well enough for people who don't want to develop their own strategies. Look for platforms that show audited track records over a minimum of a year, rather than demo account performance. Risk-adjusted metrics tell you more than the total return number.
Some brokers have built proprietary copy trading alongside their main offering. Integration helps lower the execution lag compared to standalone signal platforms that connect to the broker's platform. Research how the copy system integrates before expecting the results can be replicated to your account.