10 Best ECN Forex Brokers in Nigeria – 2024 Unbiased Reviews

Are you looking for the best ECN brokers in Nigeria? If so, you’ve come to the right place. In this blog post, we’ll provide you with a list of the top ECN brokers in Nigeria, as well as some important information to keep in mind when choosing a broker. So without further ado, let’s get started!

Choosing a forex broker is hard and you never really know what you get. Some are great, like Exness, while others are plain crap. However, at least true ECN brokers are more honest than Dealing Desk Brokers, which have some iffy issues built in.

This list of the best ECN forex brokers in Nigeria is from the beginning the best choice a trader can make. We have chosen to publish the ECN brokers on this site based on our experience. To the best of our knowledge the brokers deserve their rating


Top 10 ECN Forex Brokers in Nigeria

Here’s a list of the 10 best ECN brokers in Nigeria:

  1. HFM
  2. Exness
  3. LiteFinance
  4. JustMarkets
  5. IC Markets
  6. Pepperstone Markets
  7. Octa
  8. FBS
  9. FXTM
  10. Alpari
is hfm an ecn broker in Nigeria
Editor Rating
HFM ECN Account Overview
💰 Min Deposit$0
📗 RegulationsASIC, CySEC,
💳 ECN Commission$6 (Round turn)
⚖️ Max Leverage1:2000
💻 PlatformsMT4, MT5, HFM App
👑 Crypto TradingYes
☪️ Islamic AccountsYes

Questions have been asked about whether HFM is an ECN broker and we’re here to provide the answers.

Yes, HFM (formerly known as HotForex) is one of the best ECN brokers in Nigeria. It’s actually the #1 forex broker in our list of ECN brokers that accept clients from Nigeria.

For starters, unlike many other ECN brokers that require a hefty minimum deposit for their ECN accounts, the HFM Zero Account does not have such a requirement. You can start trading on their Zero Spread Account with whichever amount of capital you have.

Additionally, HFM is one of the best forex brokers that accept mobile money. You can easily top up your account using DusuPay mobile. And to make it even nicer, you can choose to have your HFM ECN account denominated in Nigerian Naira, therefore saving some precious amount that would have gone into currency conversion

💰 HFM ECN Account Trading Fees: HFM charges $6 commission round turn per lot. What this means is that it’ll only cost you $6 to open and close trades worth $1000. This commission charge is among the lowest commissions for ECN accounts compared other forex brokers’ ECN charges.

🖥️ HFM ECN Account Platforms: The HFM Zero Spread account is available for MT4 and MT5 on all platforms including desktop, Android, and iOS devices.

And Overall, the HFM forex trading company is renowned for its transparency and the quality of information it provides to its customers. It is known to be an innovative company that provides an ECN trading account and an exceptional level of technical support.

One of the standout features of HotForex is its quick withdrawal of funds process, which is highly valued by its clients.

The reason why the HFM Zero Spread Account is better than the other ECN brokers in this list has to be because of the number of tradeable instruments allowed. You can trade forex, Metals, Energies, EFTs, indices, shares, commodities etc., all from this one account.

Also, at $6.00 round turn commission per lot, this broker has some of the lowest commissions on ECN accounts. The only other broker with lower commissions is OctaFx at $3 per lot.

HFM Pros
HFM Cons
Editor Rating
Exness ECN Account Overview
💰 Minimum Deposit$500
📱 Mobile Money AvailableYes
⚖️ RegulationsCMA, CySEC, FCA
🔥 Maximum Leverage2000:1
💵 Trading CostUSD 7 per lot
🖥️ Trading PlatformsMT4, MT5

Exness is an online CFD trading platform that offers better-than-market conditions on the world’s financial market. It provides a range of advantages for traders, including free VPS hosting, instant withdrawal of money 24/7, segregated accounts, narrow spreads, and multiple trading options

Exness has a very good reputation among the most successful forex traders in Nigeria, with many positive reviews on Trustpilot. The broker also has a strong security system in place to protect customer funds and data.

But since this account is about the best ECN brokers in Nigeria, let’s get down to that and see why Exness makes it on this list.

For starters, Exness offers 3 variations of their ECN accounts. This is to cater for scalpers, day traders, and Algotraders.

  • The Exness Raw Spread Account has the smallest spreads and a fixed commission of $7 per round turn. 
  • The Zero Account charges 0 spread on the top 30 assets
Exness ECN Account Minimum Deposit: The minimum deposit requirement for the Exness Raw Spread account is $500 (230,270.00 Nigerian Naira).

We understand that the minimum deposit requirement for the Exness ECN Accounts may seem high to some traders, especially those who are new to the Forex market or have limited capital. If you’re looking for an ECN broker with a relatively low minimum deposit, we recommend you check out HFM, which is the #1 ECN forex broker in Nigeria.
Trading Conditions: Exness allows Muslim traders who adhere to Sharia law to convert any of their live trading accounts to an Islamic account, which exempts them from earning/paying interest that their religion prohibits
Local Presence: Exness, acknowledging the importance of the Nigerian market, has made its presence felt locally. The broker hosts regular webinars, training sessions, and seminars tailored to the needs and interests of Nigerian traders.

Exness Pros

Exness Cons

Editor Rating
LiteFinance ECN Account Overview
💰 Min Deposit$50 / 20717 NGN
📗 RegulationsCySEC
💳 Trading Fees$7 round turn
⚖️ Max Leverage1:1000
💻 PlatformsCTrader, MT4, MT5, LiteFinance App
👑 Crypto TradingYes
☪️ Islamic AccountsYes
Recommended For:

We recommend the LiteFinance ECN account for beginner forex traders who might not be able to raise the high minimum deposits required by other ECN brokers in this list

Previously known as LiteForex, LiteFinance is, without a doubt, the one of the best ECN brokers in Nigeria. It’s specially suited for beginners who may not have a lot of money to start trading. 

The LiteFinance forex trading company has been in the industry for over 16 years and has maintained a reputation of being fair, transparent, and most of all affordable.

As an example, in order to open an ECN account with LiteFinance, you only need a minimum of 50 USD (23,027.00 Nigerian Naira). This is in contrast with most other ECN forex brokers who require at least $200 to open an ECN trading account.

💰 Make Money on Your Inactive Capital: A unique feature of the LiteFinance ECN account is that traders are able to earn an annual interest of up to 2.5% on their unused capital. If that’s not incentive enough to trade with this award-winning broker, I don’t know what is.

💲 Another unique feature of the LiteFinance ECN account is that the broker does not add any markup fee on the commissions charged. In other words, what you see is what you get.

LiteFinance charges a commission of $7 round turn on most assets. But this is only for forex traders using their cTrader platform. If you prefer to use MT4 or MT5, the commissions are a little bit exorbitant at $10 per round turn. This variance in pricing is supposed to encourage more traders to move to the cTrader platform, which is ostensibly better than both MT4 and MT5.

🛡️ LiteFinance Regulation: Although LiteFinance is regulated by a tier-one regulator (CySEC), forex traders from Nigeria will be onboarded using a branch of the company that's only regulated in St. Vincent & the Grenadines.
🔒 LiteFinance Minimum Deposit: The minimum deposit required to open an ECN account with LiteFinance is $50 USD or its equivalent in Nigerian Naira, which is currently 20,900 NGN
🛅 LiteFinance cTrader Platform: LiteFinance offers the cTrader platform for real-time Forex and CFDs trading. The cTrader platform supports STP (straight-through processing), ensuring full transparency and trading without delays.
LiteFinance Pros
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JustMarkets offers optimal trading conditions and good education for beginners from Nigeria. They offer various trading instruments, including forex, commodities, indices, and cryptocurrencies, along with competitive spreads and reliable customer support

The JustMarkets Raw Spread Account offers a compelling blend of affordability, variety, and trading power. It has something for everyone, whether you’re dipping your toes in the forex waters or are a seasoned trader looking for a robust platform. With its low minimum deposit, variety of trading assets, and exceptionally high leverage, it stands as an attractive option for forex traders in Nigeria.

💲 The minimum deposit for the JustMarkets Raw Spread Account is $100. This makes it extremely accessible, allowing you to venture into the world of forex trading without burning a hole in your pocket. The low-entry barrier is particularly beneficial for beginner traders who are apprehensive about making substantial financial commitments.

🛡️ JustMarkets Maximum Leverage: The JustMarkets Raw Spread Account offers an astonishing leverage of up to 1:3000. This means that for every dollar in your account, you can control a trade worth $3,000. While leverage can be a double-edged sword, if used wisely and conservatively, it can significantly boost your trading capabilities.
🔒 JustMarkets Trading Assets: The range of trading assets available on the JustMarkets Raw Spread Account is nothing short of impressive. You get to trade in 61 Forex pairs, 7 metals, 13 indices, 3 energies, 14 cryptocurrency pairs, and 165 shares. This wide variety ensures that you'll never be short of opportunities.
🛅 JustMarkerts Regulation: Justmarkets is regulated by the Seychelles Financial Services Authority (FSA) under a Securities Dealer License number SD088.

While the Seychelles FSA is not a Tier 1 regulator like the UK's FCA or Australia's ASIC, it does provide a level of oversight that should offer some assurance to forex traders in Nigeria. However, be aware that it may not offer as robust investor protections as top-tier regulatory bodies.
JustMarkets Pros
JustMarkets Cons
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IC Markets is one of the top ECN forex brokers that is accessible to traders in Nigeria and supports multiple funding methods, including wire transfers, credit cards, and various e-wallets.

The ECN account at IC Markets is known for its tight spreads, sometimes going as low as 0 pips on major currency pairs like EUR/USD. However, they do charge a commission per lot traded, which is fairly standard for ECN accounts.

✅  If you prefer trading on the MetaTrader 4 platform, IC Markets charges a commission of $7 round turn for its ECN account.

✅ On the other hand, the IC Markets cTrader platform has a slightly lower commission charge of $6 round turn. cTrader is often praised for its intuitive design, sophisticated charting tools, and greater transparency. If you’re looking for an alternative to MT4, this could be a strong choice.

💰 IC Markets ECN Account Minimum Deposit: The minimum deposit for an ECN account with IC Markets is $200. This is relatively affordable, making it accessible for many Nigerian traders who may not have a large amount of capital to start with.
🔰 IC Markets Regulation: While IC Markets is multi-regulated with strong oversight from institutions like the Australian Securities and Investments Commission (ASIC), traders in Nigeria should be aware that they are likely to be onboarded through the branch regulated by the Seychelles Financial Services Authority (FSA).
🏦 IC Markets Funding and Withdrawal: IC Markets offers a wide range of funding and withdrawal options for traders in Nigeria, including credit cards, bank transfers, and e-wallets. However, this forex trading company does not offer local funding options, which is one of the reasons that we place it lower in our list of the best ECN brokers in Nigeria
IC Markets Pros
IC Markets Cons
Top 10 best ecn brokers in nigeria with MT4
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Pepperstone is a well-known forex and CFD broker that provides an ECN trading environment for traders around the world, including Nigeria.

Pepperstone’s ECN account offers a robust trading environment with tight spreads, a range of trading platforms, and the backing of strong regulatory bodies. It’s an excellent option for Nigerian traders who are looking for a more professional trading environment.

If you are in Nigeria and considering diving into Forex trading, Pepperstone’s ECN account is definitely worth considering.

✅ Pepperstone is a legitimate and safe ECN forex broker for Nigerians to use. The account opening process is fast and fully digital, and customer service is great, providing lightning-fast and relevant answers. Deposit and withdrawal are a breeze, with no fees charged in most cases

✅ The commission for the Pepperstone Razor Account starts at AU$7 each round turn, or the cash equivalent in the trader’s base account currency

💰 Pepperstone Razor Account Minimum Deposit: there is no minimum deposit amount required to register a Pepperstone live trading account, including the Razor Account. However, the recommended minimum deposit for the Razor Account is $200.
🔰 Pepperstone Regulation: Pepperstone is regulated by the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC) in Australia, the Cyprus Securities and Exchange Commission (CySEC), the Dubai Financial Services Authority (DFSA), the Federal Financial Supervisory Authority (BaFin) in Germany, the Capital Markets Authority (CMA) in Kenya, and the Securities Commission of The Bahamas (SCB).
🏦 Pepperstone Markets Funding and Withdrawal: Pepperstone does not charge deposit fees and withdrawal fees when Nigerian traders fund the trading account or withdraw funds from it. However, other broker fees that are charged include inactivity fees and administration fees on the Islamic Account.
IC Markets Pros
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OctaFx is one of the newer ECN forex trading platforms. Founded in 2011 it has been steadily growing due to low spreads and a complete offer on many levels.

OctaFx is basically an STP forex broker that offers ECN accounts.

Normally we are not terribly keen on these brokers but since Octafx has such a great offering to Nigerian traders, they deserve their place in our ratings.

In addition to Currencies, OctaFx also offers gold and silver, a common proposal from many Forex brokers these days.

The great thing with this broker is the completeness of the liquidity partners. Not only do they provide the standard Currenex but also Integral, which makes the liquidity on hand much more complete. The minimum deposit is as low as it gets at $100, so even complete beginners with capital constraints can start trading with a pro ECN broker in Nigeria.

The spreads are very competitive, not as good as FXTM, but still one of the best. The slippage is also below 1 pip which is a must if you are a Scalper or High Frequency Trader.

Commissions are also low and gets lower as your trading volume increases. This broker is not regulated but regulation is overrated, anyway, especially in the light of recent scandals like Refco and MF Global

OctaFX Pros
OctaFX Cons
Editor Rating

FBS is the best ECN broker for forex traders who want to trade with the lowest cost but do not mind a higher minimum deposit.

FBS, also known as Financial Brokerage Services, is a global online forex and CFD (Contract for Difference) broker that was founded in 2009. FBS offers its services to clients in over 190 countries, providing them access to trade a wide range of financial instruments, including currency pairs, stocks, commodities, and indices.

Why We Like the FBS ECN Account: FBS offers some of the most competitive trading conditions on its ECN account. Among all the ECN forex brokers that we’ve reviewed, only FBS offers a negative spread, starting at -0.1 pips. Commissions for trading on the FBS ECN account are also low, staring at $6.00 round turn per lot.

The ECN account offers 25 tradeable instruments including all the major and minor currency pairs. It’s sad that FBS does not offer more assets on its ECN account. Traders looking to trade other asset types such as indices, metals, and commodities should look elsewhere.

Another major drawback with the FBS ECN account is the high minimum deposit ($1000) required to open an account. Also, the lowest position size you can open is 0.1 lots.

FBS Pros
FBS Cons
Editor Rating

Number 9 on our list of the best ECN brokers in Nigeria is FXTM (also known as ForexTime). This forex broker has a very huge presence in Nigeria and even offers trading accounts in the Naira currency.

However, the main attraction of the FXTM ECN account has to be its leverage which stands at a maximum of 1:2000. This is a rarity with most ECN forex brokers who offer leverage of only 1:500. Hight leverage offers traders increased buying power: With high leverage, you have access more funds to trade, allowing you to potentially increase their profits.

The minimum deposit for the FXTM ECN account is $500, which is at the same level as most other ECN forex brokers in Nigeria.

If you’re to choose between the two platforms, we recommend that you go with the MT4. It has much more features compared to MT5.

Using MetaTrader4, you can, for instance, connect your ECN account to FXTM Invest, a proprietary copy trading system by FXTM. Additionally, trading on MT4 with this broker does not attract swap when you leave your trades running overnight.

And to cap it up, commissions on the MT4 platform are floating. What this means is that the higher your capital and the higher your trading volumes, the lower commissions you’ll pay. You can see the commission structure on this page.

What we like most about the FXTM ECN accounts is that commissions start from as low as $4.00. Additionally, the minimum deposit for the ECN account for traders in Nigeria stands at only $500.


10. Alpari – Best High-Leverage ECN Broker

Editor Rating

Alpari have been around for quite a long time as a Forex Broker. Was probably one of the first to start dealing with this business in 1998. Since they have been around for so long they are also present on many different markets, like US Europe and Asia with regulated corporations.

Alpari Nigeria is primarily a Market maker and not an ECN broker, which is not ideal.

However, one thing that sets Alpari apart from the competition is the use of MetaTrader 5 as the platform for the ECN accounts. That’s pretty rare and definitely interesting, especially if you want the latest technology for your trading.

The commissions are average, at least for the volumes that ordinary traders can turn over in a month. For high volume traders the commissions are very attractive at $4.00 round turn. However the variable spreads are nothing special at all and the slippage is a little high.

All in all an ECN broker that has some interesting features but doesn’t really cut it. We recommend you stay away and find a broker that offers better trading conditions.

Alpari Pros
Alpari Cons

Best ECN Brokers in Nigeria
🏛️ Forex Broker💰 Min Deposit⚖️ Max Leverage💻 Trading Platforms🛑 Margin Call/Stop Out
XM$51000:1MT4, MT5, WebTrader, Mobile Apps100% / 50%
Exness$52000:1MT4, МТ5, Mobile Apps30% /0 %
IC Markets$200500:1MT4, MT5, cTrader100% / 50%
LiteFinance$501000:1MT4, MT5100% / 20%
HF Markets$200500:1MT4, MT5, MultiTerminal, Mobile Apps50% / 20%
OctaFx$100500:1MT4, MT525% / 15%
FBS$1001:3000MT4, MT5, Mobile App40% / 20%
Pepperstone$200500:1MT4, MT5, cTrader, TradingView90% / 50%
RoboForex$10500:1MT4, MT%, cTrader100% / 40%

What is An ECN Account in Forex?

ECN means Electronic Communication Network and it is a common way of trading the Forex Market. Actually ECN creates a bridge between tier-1 liquidity providers (Banks) and smaller market participants (retail forex traders). This bridge is created through an ECN Forex Broker who charges trading commissions instead of spreads for offering his services.

We recently interviewed 7 of the most successful forex traders in Nigeria, and one thing was quite persistent among all of them. From Uche Paragon to Blessing Ezeako, they all prefer to trade using brokers who offer ECN accounts.

The key takeaway: If you want to trade forex and climb the ladder of Nigerians who’ve become rich from it, your best bet would be to trade with an ECN Forex broker.

Advantages of ECN Accounts in Forex

Even if you are a novice trader and not trading very frequently, an ECN broker is still your best choice for many reasons. Who wants to leave money on the table? Certainly it is better to keep as much as possible of the profits in your account.

There are many incredible advantages of trading forex with an ECN account. Here are some of the advantages:

  • Total Transparency – With an ECN broker, your order is passed straight to liquidity providers, leaving your broker no room for trade manipulation. The liquidity providers in this case include banks, companies, and other financial institutions.
  • Almost Zero Spreads – ECN Accounts have the lowest spreads, and this will ensure quicker profits for you
  • No requotes – The price you set for your orders is the price you get when you trade with an ECN Forex broker. If your broker is requoting your orders, you’re probably dealing with a market maker broker.

The only real disadvantage of ECN brokers in Nigeria is that they require larger initial deposits than your conventional STP or market maker brokers.

For instance, the minimum deposit at HotForex, which is our #1 recommended ECN broker in Nigeria lies at $200. This may seem very high compared to other brokers who offer minimum deposits as low as $10. However, if you have the money, you’re better off starting trading with an ECN broker.

We researched over 17 forex brokers and finally settled on 5 that we felt had the best offers for forex traders in Nigeria. Here’s the list of the top 5 ECN brokers in Nigeria:

How to Choose the Best ECN Brokers in Nigeria

How to Choose the best ecn brokers in Nigeria

The list we have given above only covers 5 ECN forex brokers who are quite popular in Nigeria. However, there are many other brokers who purport to operate ECN accounts, but they are not among the best.

So, how did we come up with this list of the best ECN brokers, and how can you also ensure that you’re only trading with the best.

Here are a few factors to consider when choosing an ECN forex broker:

      1. Low minimum initial deposit (the industry standard is $200)

      1. Low commission on trades (the industry standard is between $7-$10 on popular forex pairs)

      1. Excellent customer support (Preferably with offices in the country and supporting Naira accounts)

    Choosing a Forex Broker in general and an ECN Broker in particular takes time and effort. However, this site was created for the sole purpose of making this choice so much easier.

    In general most aspiring forex traders in Nigeria take too little time to really research the subject. Simply put, finding a great broker takes a lot of time, even with all the help that is now available on the internet.

    If you have time to spend say 2 hours a day researching Forex ECN brokers, it will take weeks to reach a decent conclusion.

    First of all you have to set up some good criteria for a ECN broker. You will never get all of them exactly as you want, but at least most of them should be right on the money or close enough. A decent set of criteria would be the following:

        • True ECN

        • Typical spread

        • Commission

        • Typical slippage

        • Broker regulation

      As you will see some brokers are not true ECN brokers, but rather NDD, STP or perhaps DMA. There is quite a big difference and ECN is the best choice, because it’s the only kind of broker that makes money only through commissions and not the spread. All others have the opportunity to fiddle with the spread and make an extra buck there, not to mention other tricks they can use.

      Most brokers will give you an idea of the average or typical spreads. However, if you have made some comparisons of real data and the spreads that the ECN broker have published you would quickly determine that the broker always is a bit more ‘optimistic’ than reality suggests. Relying on the brokers values regarding the spread can be costly.

      The commissions between ECN brokers in Nigeria vary a lot. Some brokers start at less than $4 round turn while others would charge you over $10. That’s a big difference if you do frequent trades as it will eat up your profit. Especially scalpers must be very careful when choosing an ECN broker. A slightly inflated commission schedule will erase all profits.

      Slippage can be difficult to measure especially with new brokers. However some sites do publish slippage and help you find out how the broker handles this. Some brokers are notorious in adding slippage to orders.

      Of course sometimes it not due to the broker, for example in a fast market the slippage can run away fast due to market conditions alone. But then again a broker with already high slippage numbers will not help you in a fast market, rather the opposite. Slippage mostly depends on your internet connection and the latency between the broker server and market.

      Another important thing to be aware about of when choosing an ECN broker in Nigeria is broker regulation.

      Even though the past years have been tough for many ECN brokers in that many countries have less tolerance towards lax brokers, there are still many ECN brokers out there without any or very little regulation.

      Take a well known broker (offering ECN accounts) like 4XP which doesn’t have any regulation to speak about. Such brokers are definitely more prone to create trouble for you than a regulated broker. Unregulated brokers can get away with a lot of things without ever being charged or reviewed.

      How to Get Started with ECN Brokers in Nigeria

      Trading ECN forex can be a truly great way to experience the real forex markets. If you have been trading with a market maker broker previously or if you are entirely new to forex, ECN forex trading will definitely provide you the flexibility, freedom, anonymity and transparency.

      The forex ECN trading model offers traders a transparent trading model where you don’t have to worry about re-quotes, paying the spread but in fact you can trade, fully certain that there is only a certain “commission” that you pay when you are trading ECN forex.

      Choose the Trading Platform Carefully

      The ECN model has a few variations of forex trading platforms. These include Currenex, MT4 and cTrader. Traditionally, Currenex trading platform was the most ideal trading platform for institutional traders due to the advantages it offers. However as ecn forex started gaining popularity with retail forex traders, all the three trading platforms hold their own forte.

      It is critical that you pay careful attention to the type of trading platform you choose to trade with. In fact to draw a parallel, it is very much like buying a car. So when choosing a trading platform for ecn, be sure that you test the platforms before you decide to stick to one.

      Selecting your account type

      Most ECN Brokers offer different variations of the ecn account types. For a full list of brokers click here and read on the reviews for the account types to gain better insights.

      The account type from one broker to another can vary a lot with differences such as leverage, minimum deposit amounts, margins and spreads. Choose an ECN account type that is best suited to your requirements and pay attention to all the factors mentioned above.

      Commission. Commission. Commission

      Different ecn brokers charge different fees when it comes to trading lots. While you shouldn’t blindly choose an ecn broker that offers the cheapest or lowest commissions finding a balance or a compromise between the other factors mentioned above should help you identify the right ecn broker. In other words, do not base your judgement solely based on the commissions charged but look into all other aspects as well.

      Spreads & Pricing

      The prices that are displayed by an ECN broker can vary based on the liquidity pools and the number of participants in the network. A good way to see if the pricing provided to you is the most ideal is to visit the ecn broker’s website which usually displays a pricing widget. While the spreads displayed there may or may not be entirely accurate, it should be able to give you a basic idea on the spreads and the pricing.

      Scalping/Hedging – Check your strategy

      While most ecn brokers allow scalping and some even allow hedging it is always best to learn the do’s and don’t before hand. Reading the ecn broker reviews will help you gain insights into the ecn broker and will provide you with the information needed in order to choose the right ecn broker.

      The above pointers, while seeming very basic actually plays an important role. Given the fact that with most ecn brokers the minimum investment requirement is usually higher than market maker brokers, it pays to conduct due diligence before you decide upon the ecn broker you want to sign up and start trading with.

      Difference Between ECN and Market Maker Forex Brokers

      The two main types of Forex brokers are the Market Maker and the Electronic Clearing Network or ECN broker.

      At one time, market maker brokers had a reputation for engaging in several or more unscrupulous practices, and most experts would advise steering clear of this type.

      Regulation and trader awareness have had positive influence in reducing and eliminating bad practices. Today, it is entirely conceivable to find a dependable market maker broker in Nigeria.

      The critically important factor to consider is this: A market maker acts as the counterparty to you in your currency pair transactions.

      This is an obvious conflict of interest. If the market maker you are considering is legitimate, they will disclose this clearly and unequivocally and ask you to sign documents acknowledging your understanding and acceptance of this.

      What makes this scenario acceptable is that the broker will have other traders that want to take the opposite position from you. Chances are good that unless you are trading such large orders as to threaten the broker’s market equity, they will deal fairly with you.

      This brings to light another aspect to examine when considering a market maker: They should be willing to reveal the total amount of their market capitalization.

      One advantage market makers offer, albeit not all that significant given the volume of the Forex markets, is that in almost 100% of instances, orders get filled instantly. Slippage – the term for describing what occurs when there is a significant lapse of time between when an order is placed and when it is filled, along with what that implies with regard to prices changing in the interim – is essentially nonexistent.

      The chief advantages market makers offer are small minimum initial deposits to fund the account and small minimum trade sizes. This makes them ideal for someone who wants to try their hand at Forex trading with minimal risk.

      Some market makers will process an account application for as little as one dollar and have no minimum trade size. Realistically, in order to leave yourself room to maneuver and ride out drawdowns, figure a minimum of $300 to start out with.

      There are more considerations to make when choosing a broker and more than several ways to go about it. Some of these will follow after the ECN broker is examined.

      The ECN broker differs from the market maker primarily in that, rather than take the opposite side against you in a trade, they simply exist to match your trade with that of another trader or traders who want to take the opposite position to yours.

      Many traders feel more comfortable for this reason.

      Spreads – which is the difference between the purchasing and selling price of a currency pair and represents the amount the broker charges you for granting access to the markets, are generally lower and fixed, rather than variable as is often true of market makers.

      The other advantage the ECN offers is they have no incentive to manipulate price data, harvest stops or balloon spreads, practices that can unfairly tilt the trading results in favor of the broker.

      One slight disadvantage of the ECN is that liquidity could be lower and slippage a potential if for some reason you should want to trade exotic pairs.

      Major pairs will still fill just as quickly as with the market maker, any difference measured in nanoseconds.

      The other disadvantage, the main one, presented by selecting an ECN broker in Nigeria, is that initial margin deposits are considerably higher than those for the market maker. Most ECNs will not set up an account for anything less than $2500 and some larger brokers are looking for $100,000 or more.

      Minimum trade sizes are much larger, also.

      For people who are accustomed to having a steady, positive stream of income from salaries and wages, the psychological impact of seeing a trade work against them and money that took weeks, months or years to accumulate evaporating in minutes, hours or days might be too severe.

      The decision between the two types of brokers is ultimately a personal one. There are reputable, honest, transparent brokers among both market makers and ECNs.

      What follows are some tips and information sources that will lend assistance to the process.

      Simulated accounts allow for a “test drive” of a broker. All brokers offer these. Trading can be practiced with pretend money, allowing the broker’s trading platform, price data stream, Internet connection stability, customer service and other elements to be evaluated risk free.

      If you like the broker and everything else involved during these trials, your experience after going live should be similar.

      Don’t fall into the trap of thinking that a broker will treat you better if you open a live account.

      If the broker is slow to return e-mails, if it consistently takes a long time for an agent to respond to a chat request, the trading platform crashes a lot or you receive vague answers to questions, that broker deserves a check in the minus column.

      Something desirable, but not mandatory in this regard is to choose a broker that permits a simulated trading account to be available even after the live account has been set up.

      The other thing that is necessary in determining the choice of a broker is research.

      Retail Forex trading, being a product of the Internet, presents a plethora of websites existing solely for the purpose of providing traders with a forum to evaluate and express opinions regarding brokers.

      When visiting these sites, keep in mind that people generally do not post comments unless they want to vent. Observe the language, spelling and grammar being used. If the poster seems barely coherent, it is very unlikely that they possess the ability to comprehend the lawyer imposed legalese mumbo-jumbo that is part and parcel of the disclosure and agreement documents that all brokers use. With further regard to these, a broker that explains these documents in plain language should get a check in the plus column.

      Likewise, be wary of extremely positive reviews, especially those touting phenomenal profits and astronomical winning streaks and percentages. It’s very likely that these were posted by shills – people compensated in some manner by the reviewed broker.

      Other good sources of broker evaluations are books, periodicals and trade journals. These offer a longer-term perspective. If a broker received good reviews in a book or other publication several years ago, and current website reviews seem to support those opinions, then a good potential broker candidate has been discovered.

      Of course, the best sources of information are personal acquaintances, if any, that trade Forex.

      Choosing your first Forex broker should receive diligent attention. Do not rush this process. Find between three and 10 brokers that look good on first examination and move on to look at these more closely.

      Keep in mind, also, that it is perfectly acceptable to have multiple brokers, whether simulated or live. This permits them to be evaluated under actual trading conditions along with the valuable benefit of allowing price data streams to be compared simultaneously.

      How to Choose an ECN Broker in Nigeria

      We are on record as having stated that choosing a Forex broker is, in terms of time and effort and results, the most crucial decision involved in the process of starting up a retail Forex trading in Nigeria.

      Brokers, due to regulatory requirements and a natural desire to avoid legal snafus with clients, require new customers to agree to the terms and conditions that govern the broker/client relationship and to have clients’ acknowledgement that they understand and accept the high degree of the risk of losing money that is an absolute reality of online Forex trading.

      The documents can be confusing in the extreme, filled with unfamiliar jargon and terminology and seem to be deliberately designed to confuse and baffle the average person’s comprehension.

      Before doing any actual trading, take as much time as needed to get a totally clear understanding of your potential broker’s account documents.

      We admit that we’re as guilty as everyone when it comes to accepting computer software license agreements without reading them completely, but failing to understand a Forex broker’s documents fully will cost you money, which is the exact opposite from your reason for trading in the first place.

      Here are some tough questions to ask a broker. Insist on clear answers. If you are still uncertain about anything, ask again, as many times as it takes. This is also an excellent way to gauge a broker’s level of service.

      If the answers you receive are vague, seem outright evasive or deceptive or if you simply get the feeling that the broker can’t be bothered with helping you, find another broker. There are plenty.

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