ECN vs dealing desk: understanding what you're trading through
The majority of forex brokers fall into two broad camps: those that take the other side of your trade and those that pass it through. The difference is more than semantics. A dealing desk broker acts as the other side of your trade. A true ECN setup routes your order directly to the interbank market — you get fills from actual buy and sell interest.
Day to day, the difference matters most in a few ways: whether spreads blow out at the wrong moment, execution speed, and order rejection rates. Genuine ECN execution will typically give you tighter spreads but add a commission per lot. DD brokers mark up the spread instead. Neither model is inherently bad — it comes down to how you trade.
If your strategy depends on tight entries and fast fills, ECN is almost always worth the commission. Getting true market spreads makes up for the commission cost on most pairs.
Fast execution — separating broker hype from reality
Every broker's website mentions how fast they execute orders. Claims of "lightning-fast execution" look good in marketing, but how much does it matter for your trading? Quite a lot, depending on your strategy.
A trader who placing a handful of trades per month, a 20-millisecond difference doesn't matter. But for scalpers working tight ranges, execution lag translates to money left on the table. If your broker fills at 35-40 milliseconds with a no-requote policy offers noticeably better entries compared to platforms with 150-200ms fills.
Some brokers have invested proprietary execution technology that eliminates dealing desk intervention. One example is Titan FX's Zero Point execution system designed to route orders straight 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 review of Titan FX.
Commission-based vs spread-only accounts — which costs less?
This get the facts is the most common question when setting up a broker account: is it better to have commission plus tight spreads or a wider spread with no commission? The maths varies based on how much you trade.
Here's a real comparison. A spread-only account might have EUR/USD at 1.1-1.3 pips. The ECN option offers true market pricing but adds roughly $3-4 per standard lot round trip. With the wider spread, the cost is baked into the markup. At 3-4+ lots per month, ECN pricing is almost always cheaper.
A lot of platforms offer both as options so you can pick what suits your volume. The key is to calculate based on your actual trading volume rather than trusting the broker's examples — those usually make the case for the higher-margin product.
Understanding 500:1 leverage without the moralising
High leverage polarises forex traders more than most other subjects. Regulators limit retail leverage at relatively low ratios for retail accounts. Brokers regulated outside tier-1 jurisdictions can still offer 500:1 or higher.
The standard argument against is that retail traders can't handle it. Fair enough — the numbers support this, the majority of retail accounts lose money. But the argument misses a key point: professional retail traders never actually deploy the maximum ratio. They use having access to high leverage to lower the margin sitting as margin in any single trade — freeing up margin to deploy elsewhere.
Obviously it carries risk. That part is true. But that's a risk management problem, not a leverage problem. If your strategy benefits from less capital per position, the option of higher leverage means less money locked up as margin — most experienced traders use it that way.
Choosing a broker outside FCA and ASIC jurisdiction
Regulation in forex operates across tiers. At the top is FCA (UK) and ASIC (Australia). You get 30:1 leverage limits, enforce client fund segregation, and limit the trading conditions available to retail accounts. Further down you've got jurisdictions like Vanuatu and Mauritius and Mauritius FSA. Fewer requirements, but the flip side is better trading conditions for the trader.
The compromise is straightforward: going with an offshore-regulated broker offers higher leverage, fewer account restrictions, and usually lower fees. The flip side is, you sacrifice some regulatory protection if something goes wrong. There's no investor guarantee fund paying out up to GBP85k.
Traders who accept this consciously and prefer performance over protection, regulated offshore brokers can make sense. The key is checking the broker's track record rather than just reading the licence number. A broker with 10+ years of clean operation under an offshore licence can be more reliable in practice than a newly licensed broker that got its licence last year.
Broker selection for scalping: the non-negotiables
Scalping is one area where broker choice makes or breaks your results. Targeting 1-5 pip moves and keeping positions for seconds to minutes. With those margins, even small differences in spread translate directly to the difference between a winning and losing month.
The checklist comes down to a few things: true ECN spreads at actual market rates, order execution in the sub-50ms range, a no-requote policy, and no restrictions on scalping strategies. Some brokers say they support scalping but throttle fills if you trade too frequently. Look at the execution policy before depositing.
Platforms built for scalping tend to make it obvious. Look for average fill times on the website, and usually throw in VPS access for running bots 24/5. If a broker is vague about execution specifications anywhere on the website, take it as a signal.
Copy trading and social platforms: what works and what doesn't
Social trading has become popular over the past several years. The pitch is simple: identify profitable traders, mirror their activity without doing your own analysis, collect the profits. In reality is less straightforward than the advertisements make it sound.
The main problem is execution delay. When the trader you're copying opens a position, your mirrored order executes milliseconds to seconds later — during volatile conditions, those extra milliseconds might change a profitable trade into a losing one. The more narrow the average trade size in pips, the more the impact of delay.
That said, a few social trading platforms are worth exploring for people who don't want to trade actively. What works is access to real track records over at least a year, instead of simulated results. Metrics like Sharpe ratio and maximum drawdown matter more than headline profit percentages.
A few platforms offer proprietary copy trading integrated with their standard execution. This can minimise the delay problem compared to third-party copy services that connect to the trading platform. Research the technical setup before assuming the lead trader's performance will translate with the same precision.