10 Best ECN Forex Brokers in Nigeria – 2024 Unbiased Reviews

What is An ECN Account in Forex?

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:

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

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

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

1. 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.