Guide · 6 min read
ECN vs market maker brokers
Every forex broker makes money either from the spread, from a commission or by taking the other side of your trade. Understanding which model you are using helps you pick the cheaper account.
Market makers
A market maker quotes its own bid and ask prices and may take the opposite side of client trades, hedging the net exposure. Accounts are usually commission-free, with the broker’s fee built into a wider spread. Market makers can offer fixed spreads, guaranteed stops and very small trade sizes. Plus500, eToro and the standard accounts of XM and AvaTrade work this way.
ECN and raw-spread accounts
ECN-style or raw-spread accounts pass through prices from a pool of liquidity providers with little or no markup and charge a fixed commission per lot instead. Spreads on EUR/USD often average 0.0 to 0.2 pips, plus around $6 to $7 per round-turn lot. IC Markets, Pepperstone, FP Markets and Vantage are typical examples.
STP and hybrid models
Most retail brokers are hybrids. They internalise some flow and route the rest to liquidity providers (straight-through processing). The label on the account matters less than the all-in cost and the quality of fills you actually get.
Which is cheaper?
| Account | EUR/USD spread | Commission | Cost per lot |
|---|---|---|---|
| Typical standard | 1.2 pips | $0 | $12 |
| Typical raw / ECN | 0.1 pips | $7 | $8 |
For anyone trading more than occasionally, raw accounts are usually cheaper. Commission-free accounts can make sense for very small trades or if you value simplicity. Compare real numbers with our cost calculator or see the lowest spread brokers.
Is a market maker trading against me?
Potentially, which is why regulation matters. Tier-1 regulators require best execution, fair pricing and conflict-of-interest policies. A well-regulated market maker is not inherently worse than an ECN broker.
Frequently asked questions
Is an ECN broker better than a market maker?
For active traders, ECN-style accounts are usually cheaper. For beginners trading small sizes, a well-regulated market maker can be simpler.
Do ECN brokers have requotes?
No. ECN-style accounts use market execution, so orders fill at the best available price, which can include slippage.
Risk warning: CFDs and leveraged forex are complex instruments and come with a high risk of losing money rapidly. Between roughly 60% and 89% of retail investor accounts lose money when trading CFDs, depending on the provider. Consider whether you understand how they work and can afford to lose your money. Read the full risk warning.