ECN Brokers and News Trading

Top ECN Brokers and News Trading

ECN Brokers and News Trading
Online BrokerMinimum FX SpreadFX CommissionMinimum DepositMT4MT5cTtraderJForex
0.0
Minimum FX Spread
$3.5
Commission
$200
Minimum Deposit
MT4
MT5
cTrader
JForex
0.1
Minimum FX Spread
$3.5
Commission
$100
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$3.0
Commission
$500
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$4.0
Commission
$50
Minimum Deposit
MT4
MT5
cTrader
JForex
0.3 (Typical)
Minimum FX Spread
$10
Commission
$300
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$5.0
Commission
$300
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$2.0
Commission
$500
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$3.5
Commission
$200
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$6.75
Commission
$500
Minimum Deposit
MT4
MT5
cTrader
JForex
0.1
Minimum FX Spread
$4.0
Commission
$3000
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$2.0
Commission
$10
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$2.0
Commission
$100
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$3.5
Commission
$200
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$3.5
Commission
$500
Minimum Deposit
MT4
MT5
cTrader
JForex
1.2
Minimum FX Spread
$0
Commission
$100
Minimum Deposit
MT4
MT5
cTrader
JForex
0.0
Minimum FX Spread
$3.5
Commission
$100
Minimum Deposit
MT4
MT5
cTrader
JForex

News Trading, Spreads and ECN Brokers

It is possible to trade the news on a dealing desk broker. The time around a major news release can be time of amplified volatility in the markets, however. So brokers, even with fixed spreads, may widen spreads considerably around release. This can make trading into the news problematic, as it means that the trader can potentially start with a large deficit to make up, if the order goes through.

Spreads and news trading

Some brokers do not change their fixed spreads, but here problems may emerge for those who trade into the news, if the broker does not support this type of trading. However there is always the time before release and after, but again, spreads can widen at these times as well.

One possibility is to use a broker which does not have any restrictions on trading styles, and in particular one which bypasses the dealing desk and looks for the best prices, such as an ECN broker. It should be noted that even though ECN spreads can be very low, there is normally a fixed commission charged, and spreads can also widen to some extent especially around news events.

The commissions above are per lot per side and at some broker can vary depending on volume traded. The minimum deposit is for the ECN account types at the broker (there may be different minimum deposits for other account types at some brokers).

ECN and news trading

Ideally a news trade should be executed fast at the best possible price. When trading with a dealing desk broker, the trade may not be fast enough, there may be liquidity issues in placing an order and in all events the order has to clear the dealing desk, creating potential hurdles for some kinds of news trading. An ECN broker on the other hand, can in theory process orders fast, at the best possible price, from the increased set of prices it receives, without dealing desk intervention.

Some ECN brokers aim to provide rapid order processing by locating their trading servers in data centres and using technology such as fibre optical cables. To actually make the news trade, the trader can use the online trading platform provided, and the table above lists the platforms offered by each broker, all of which can be used by news traders.

Before, during and after release

This article has mentioned that there can be different phases to trading the news (typically this news is economic data related to the currency pair, in the case of Forex). Trading the news is based around trading on a known factor (that the data will be released at a certain time) but with a range of unknown factors, such as what the value of the data will be and how the market will respond. The trader can speculate on what the data will be and the way the market will respond, with the caveat that these speculations can be wrong. However the market may show different types of behavior to news releases, if the market is considered before and after news release, as well as at release.

Before the release of the potentially market moving news is a relatively flexible time frame, as major news releases can see 'pricing in' action for an extended period up to release. This can produce trends. However as the release approaches, then increased volatility may be seen. The more immediate time frame before release can be quite volatile, but still with trends perhaps visible on shorter time frames. Closer to release, there may be a quiet time, but there can also be very strong volatility.

The time of release can see the actual data being digested by the market very rapidly. Thus a very strong move may be seen up or down, especially if there has been a significant deviation from the expected value of the data and the real value of the data. However this move can rapidly change and oscillate in a very short time frame. Even if there has been a deviation, oscillation can happen, as the market deals rapidly with broader consequences of the data. Sometimes the result has been priced in to the extent that the market does not react that strongly (for example if there has not been a significant deviation from the expected and real value).

The time after release is also flexible time frame, as it can cover the more immediate time after release, which may show moves counter to original move at release or continuation of the direction of the move, and the next sessions where the market may show renewed reactions to the data.

Best ECN Broker For News Trading

The news trader may be interested in a pick on this site of 'Best Broker' and the pick is between Pepperstone and Dukascopy, both of which allow news trading (with the caveat that other brokers may suit different traders). This is because they offer cTrader (in the case of Pepperstone) and JForex (in the case of Dukascopy). Both of these platforms are relatively user friendly and optimised for ECN trading. When news trading, the trader may want a platform which is user friendly and fast, as they attempt to narrow down a choice of when to trade and how to trade. Both brokers also offer MT4, which the trader may prefer using and in the case of Pepperstone, the successor to MT4, MT5, which is a platform with a number of enhancements on MT4, including more optimised performance for ECN based trading.

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