ECN vs dealing desk: understanding what you're trading through
Most retail brokers fall into one of two categories: market makers or ECN brokers. This isn't just terminology. A dealing desk broker acts as the one taking the opposite position. An ECN broker routes your order directly to banks and institutional LPs — you're trading against genuine liquidity.
For most retail traders, the difference matters most in how your trades get filled: how tight and stable your spreads are, how fast your orders go through, and whether you get requoted. ECN brokers tends to offer raw spreads from 0.0 pips but apply a commission per lot. DD brokers pad the spread instead. Both models work — it comes down to how you trade.
If your strategy depends on tight entries and fast fills, ECN execution is generally the right choice. The raw pricing compensates for paying commission on the major pairs.
Fast execution — separating broker hype from reality
You'll see brokers advertise how fast they execute orders. Claims of sub-50 milliseconds look good in marketing, but does it make a measurable difference when you're actually placing trades? It depends entirely on what you're doing.
A trader who making two or three swing trades a week, the gap between 40ms and 80ms execution won't move the needle. But for scalpers targeting tight ranges, slow fills means slippage. Consistent execution at in the 30-40ms range with zero requotes gives you measurably better fills over one that averages 200ms.
A few brokers built proprietary execution technology that eliminates dealing desk intervention. Titan FX developed a Zero Point execution system that routes orders directly to LPs without dealing desk intervention — their published average is under 37 milliseconds. For a full look at how this works in practice, see this Titan FX broker review.
Commission-based vs spread-only accounts — which costs less?
Here's a question that comes up constantly when setting up their trading account: is it better to have the raw spread with commission or zero commission but wider spreads? The maths varies based on how much you trade.
Here's a real comparison. A spread-only account might show EUR/USD at around 1.2 pips. The ECN option shows the same pair at 0.0-0.3 pips but adds roughly $3-4 per lot round-turn. With the wider spread, you're paying through every trade. At more than a few lots a week, the commission model works out cheaper.
A lot of platforms offer both as options so you can pick what suits your volume. Make sure you work it out using your real monthly lot count rather than trusting marketing scenarios — they usually be designed to sell whichever account the broker wants to push.
500:1 leverage: the argument traders keep having
Leverage splits the trading community more than almost anything else. Regulators restrict leverage to 30:1 or 50:1 depending on the asset class. Brokers regulated outside additional resources tier-1 jurisdictions continue to offer 500:1 or higher.
The usual case against 500:1 is that it blows accounts. This is legitimate — the data shows, most retail traders lose money. But the argument misses something important: professional retail traders rarely trade at 500:1 on every trade. What they do is use the option of high leverage to reduce the margin sitting as margin in any single trade — freeing up funds for additional positions.
Yes, 500:1 can blow an account. That part is true. But blaming the leverage is like blaming the car for a speeding ticket. If your strategy needs less capital per position, having 500:1 available frees up margin for other positions — which is the whole point for anyone who knows what they're doing.
Offshore regulation: what traders actually need to understand
Regulation in forex operates across tiers. At the top is FCA, ASIC, CySEC. You get 30:1 leverage limits, require negative balance protection, and put guardrails on how aggressively brokers can operate. Further down you've got places like Vanuatu (VFSC) and Mauritius (FSA). Lighter rules, but that also means more flexibility in what they can offer.
What you're exchanging straightforward: tier-3 regulation gives you more aggressive trading conditions, lower compliance hurdles, and usually cheaper trading costs. In return, you get less safety net if something goes wrong. No compensation scheme paying out up to GBP85k.
If you're comfortable with the risk and pick better conditions, tier-3 platforms work well. What matters is checking the broker's track record rather than just trusting a licence badge on a website. A platform with a long track record and no withdrawal issues under tier-3 regulation is often a safer bet in practice than a freshly regulated FCA-regulated startup.
What scalpers should look for in a broker
For scalping strategies is the style where broker choice has the biggest impact. When you're trading 1-5 pip moves and holding positions for seconds to minutes. At that level, even small differences in fill quality become profit or loss.
Non-negotiables for scalpers comes down to a few things: raw spreads from 0.0 pips, execution in the sub-50ms range, zero requotes, and no restrictions on scalping strategies. Some brokers say they support scalping but slow down orders when they detect scalping patterns. Check the fine print before funding your account.
Brokers that actually want scalpers will say so loudly. Look for execution speed data somewhere prominent, and usually throw in VPS access for EAs that need low latency. If a broker is vague about their execution speed anywhere on their marketing, that's probably not a good sign for scalpers.
Following other traders — the reality of copy trading platforms
Social trading has grown over the past several years. The concept is simple: find someone with a good track record, copy their trades in your own account, and profit alongside them. In practice is messier than the advertisements imply.
What most people miss is execution delay. When the lead trader executes, the replicated trade goes through with some lag — when prices are moving quickly, the delay transforms a winning entry into a bad one. The more narrow the average trade size in pips, the worse this problem becomes.
Having said that, a few copy trading setups deliver value for traders who don't want to trade actively. Look for transparency around real track records over a minimum of a year, instead of demo account performance. Metrics like Sharpe ratio and maximum drawdown are more useful than the total return number.
Some brokers build proprietary copy trading alongside their regular trading platform. This tends to reduce latency issues compared to external copy trading providers that bolt onto the trading platform. Check how the copy system integrates before expecting the results will translate with the same precision.