ECN vs dealing desk: understanding what you're trading through
Most retail brokers fall into one of two categories: dealing desk or ECN. This isn't just terminology. A dealing desk broker becomes your counterparty. An ECN broker routes your order through to banks and institutional LPs — you get fills from real market depth.
In practice, the difference shows up in how your trades get filled: how tight and stable your spreads are, execution speed, and order rejection rates. ECN brokers will typically deliver tighter pricing but apply a commission per lot. Market makers pad the spread instead. Both models work — it comes down to what you need.
If your strategy depends on tight entries and fast fills, ECN execution is generally worth the commission. The raw pricing makes up for the commission cost on most pairs.
Fast execution — separating broker hype from reality
Every broker's website mentions fill times. Claims of 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 placing a handful of trades per month, shaving off a few milliseconds is irrelevant. But for scalpers working tight ranges, every millisecond of delay translates to slippage. Consistent execution at in the 30-40ms range with no requotes offers noticeably better entries versus slower execution environments.
A few brokers built proprietary execution technology that eliminates dealing desk intervention. Titan FX developed a Zero Point execution system which sends orders immediately to LPs without dealing desk intervention — their published average is under 37 milliseconds. You can read a detailed breakdown in this Titan FX review.
Commission-based vs spread-only accounts — which costs less?
This is a question that comes up constantly when setting up a broker account: do I pay a commission on raw spreads or view details zero commission but wider spreads? The maths varies based on your monthly lot count.
Let's run the numbers. A standard account might offer EUR/USD at 1.1-1.3 pips. A raw spread account shows true market pricing but charges a commission of about $7 per lot traded both ways. On the spread-only option, the cost is baked into the spread on each position. At moderate volume, the raw spread account saves you money mathematically.
A lot of platforms offer both side by side 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 be designed to sell the higher-margin product.
500:1 leverage: the argument traders keep having
High leverage splits retail traders more than almost anything else. Regulators limit retail leverage at 30:1 in most jurisdictions. Offshore brokers still provide ratios of 500:1 and above.
Critics of high leverage is simple: inexperienced traders wipe out faster. This is legitimate — the numbers support this, the majority of retail accounts end up negative. But the argument misses a key point: experienced traders rarely trade at the maximum ratio. What they do is use the option of more leverage to reduce the margin sitting as margin in any single trade — leaving more margin for additional positions.
Sure, it can wreck you. No argument there. The leverage itself isn't the issue — how you size your positions is. When a strategy requires reduced margin commitment, access to 500:1 frees up margin for other positions — which is the whole point for anyone who knows what they're doing.
Choosing a broker outside FCA and ASIC jurisdiction
Regulation in forex falls into different levels. Tier-1 is regulators like the FCA and ASIC. Leverage is capped at 30:1, mandate investor compensation schemes, and put guardrails on the trading conditions available to retail accounts. On the other end you've got jurisdictions like Vanuatu and Mauritius and Mauritius (FSA). Fewer requirements, but the flip side is more flexibility in what they can offer.
The trade-off is real and worth understanding: going with an offshore-regulated broker offers 500:1 leverage, fewer compliance hurdles, and usually cheaper trading costs. The flip side is, you sacrifice some investor protection if there's a dispute. There's no investor guarantee fund equivalent to FSCS.
Traders who accept this consciously and pick better conditions, offshore brokers can make sense. What matters is doing your due diligence rather than only trusting a licence badge on a website. A broker with a decade of operating history under VFSC oversight is often a safer bet in practice than a freshly regulated tier-1 broker.
Broker selection for scalping: the non-negotiables
Scalping is the style where broker choice has the biggest impact. When you're trading small ranges and holding trades open for very short periods. At that level, even small gaps in fill quality become profit or loss.
Non-negotiables for scalpers isn't long: 0.0 pip raw pricing from 0.0 pips, fills under 50 milliseconds, zero requotes, and the broker allowing scalping and high-frequency trading. A few brokers claim to allow scalping but add latency to execution for high-frequency traders. Check the fine print before depositing.
ECN brokers that chase this type of trader tend to say so loudly. Look for execution speed data somewhere prominent, and they'll typically include virtual private servers for automated strategies. If the broker you're looking at doesn't mention their execution speed anywhere on the website, that's probably not a good sign for scalpers.
Social trading in forex: practical expectations
The idea of copying other traders has grown over the past decade. The pitch is straightforward: find traders who are making money, replicate their positions in your own account, benefit from their skill. How it actually works is less straightforward than the advertisements imply.
What most people miss is the gap between signal and fill. When the trader you're copying opens a position, your mirrored order goes through after a delay — and in fast markets, those extra milliseconds transforms a winning entry into a losing one. The tighter the profit margins, the bigger the lag hurts.
That said, some copy trading setups work well enough for those who don't want to monitor charts all day. What works is transparency around verified trading results over no less than 12 months, instead of demo account performance. Looking at drawdown and consistency are more useful than raw return figures.
Certain brokers have built in-house social platforms alongside their standard execution. Integration helps lower latency issues compared to third-party copy services that bolt onto the broker's platform. Look at whether the social trading is native before assuming the results can be replicated in your experience.