ECN vs dealing desk: understanding what you're trading through
A lot of the brokers you'll come across fall into one of two categories: dealing desk or ECN. The difference is more than semantics. A dealing desk broker becomes the one taking the opposite position. An ECN broker routes your order through to banks and institutional LPs — you get fills from genuine liquidity.
Day to day, the difference shows up in a few ways: whether spreads blow out at the wrong moment, how fast your orders go through, and order rejection rates. ECN brokers will typically deliver tighter pricing but apply a commission per lot. Dealing desk brokers pad the spread instead. Both models work — it hinges on what you need.
If your strategy depends on tight entries and fast fills, ECN execution is generally worth the commission. Getting true market spreads makes up for paying commission on the major pairs.
Fast execution — separating broker hype from reality
Every broker's website mentions execution speed. Numbers like under 40ms fills sound impressive, but what does it actually mean when you're actually placing trades? Quite a lot, depending on your strategy.
A trader who making longer-term positions, the gap between 40ms and 80ms execution is irrelevant. If you're scalping 1-2 pip moves working small price moves, every millisecond of delay can equal worse fill prices. Consistent execution at 35-40 milliseconds with no requotes provides an actual advantage versus slower execution environments.
Some brokers put real money into proprietary execution technology that eliminates dealing desk intervention. One example is Titan FX's Zero Point technology which sends orders straight to LPs without dealing desk intervention — the documented execution speed is under 37 milliseconds. For a full look at how this works in practice, see this Titan FX review.
Commission-based vs spread-only accounts — which costs less?
This is something nearly every trader asks when setting up an account type: is it better to have the raw spread with commission or zero commission but wider spreads? The maths depends on how much you trade.
Take a typical example. The no-commission option might have EUR/USD at 1.0-1.5 pips. A raw spread account shows true market pricing but adds around $3.50-4.00 per standard lot round trip. For the standard account, you're paying through every trade. Once you're trading moderate volume, the raw spread account is almost always cheaper.
Many ECN brokers offer both account types so you can see the difference for yourself. Make sure you do the maths with your own numbers rather than trusting marketing scenarios — broker examples usually favour one account type over the other.
500:1 leverage: the argument traders keep having
The leverage conversation polarises forex traders more than any other topic. Regulators restrict retail leverage at 30:1 or 50:1 depending on the asset class. Brokers regulated outside tier-1 jurisdictions can still offer 500:1 or higher.
Critics of high leverage is that it blows accounts. This is legitimate — the numbers support this, most retail traders lose money. But the argument misses something important: traders who know what they're doing rarely trade at full leverage. What they do is use the availability high leverage to minimise the capital locked up in open trades — which frees capital for additional positions.
Yes, 500:1 can blow an account. Nobody disputes that. The leverage itself isn't the issue — how you size your positions is. If your strategy benefits from lower margin requirements, having 500:1 available means less money locked up as margin — which is the whole point for anyone who knows what they're doing.
Offshore regulation: what traders actually need to understand
Broker regulation in forex exists on tiers. Tier-1 is regulators like the FCA and ASIC. You get 30:1 leverage limits, mandate investor compensation schemes, and put guardrails on the trading conditions available to retail accounts. Tier-3 you've got places like Vanuatu (VFSC) and Mauritius (FSA). Fewer requirements, but that also means higher leverage and fewer restrictions.
The trade-off is not subtle: tier-3 regulation gives you higher leverage, fewer account restrictions, and usually lower fees. But, you have less safety net if the broker fails. There's no investor guarantee fund equivalent to FSCS.
For traders who understand this trade-off and pick execution quality and flexibility, tier-3 platforms work well. The important thing is looking at operating history, fund segregation, and reputation rather than just checking if they're regulated somewhere. A broker with a decade of operating history under VFSC oversight can be more trustworthy in practice than a newly licensed FCA-regulated startup.
What scalpers take a look should look for in a broker
Scalping is where broker choice has the biggest impact. You're working tiny price movements and holding positions for seconds to minutes. At that level, tiny gaps in execution speed become profit or loss.
What to look for isn't long: raw spreads at actual market rates, execution consistently below 50ms, zero requotes, and no restrictions on scalping strategies. Some brokers claim to allow scalping but slow down fills for high-frequency traders. Look at the execution policy before funding your account.
Platforms built for scalping tend to say so loudly. You'll see execution speed data somewhere prominent, and often throw in VPS access for running bots 24/5. If the broker you're looking at doesn't mention execution specifications anywhere on their site, that's probably not a good sign for scalpers.
Social trading in forex: practical expectations
The idea of copying other traders has become popular over the past few years. The appeal is obvious: identify traders who are making money, mirror their activity without doing your own analysis, and profit alongside them. How it actually works is messier than the marketing make it sound.
The biggest issue is the gap between signal and fill. When a signal provider enters a trade, your mirrored order fills with some lag — when prices are moving quickly, that lag can turn a winning entry into a losing one. The more narrow the strategy's edge, the bigger this problem becomes.
Despite this, some copy trading setups are worth exploring for those who can't develop their own strategies. Look for transparency around audited trading results over a minimum of several months of live trading, rather than backtested curves. Looking at drawdown and consistency are more useful than the total return number.
Certain brokers build in-house social platforms alongside their main offering. This tends to reduce the execution lag compared to standalone signal platforms that bolt onto the trading platform. Research how the copy system integrates before assuming the lead trader's performance can be replicated to your account.