Is Eightcap an ECN Broker
Eightcap operates using a hybrid model that includes STP and ECN (Account Raw) functions. This means that for some orders, the broker can use ECN, providing traders with direct access to interbank liquidity, lower spreads, high execution speed and maximum convenience of transactions.
In the world of online trading, there are many brokerage companies that provide traders with different order execution systems. And one of such intermediaries is Eightcap, which attracts investors with its competitive terms of cooperation.
In this article, TU experts give an answer: Is Eightcap an ECN broker? They also analyze what are the main advantages of ECN technology.
Which broker is best ECN or STP?
The choice between ECN and STP brokers depends on your trading style, preferences and needs. ECN brokers offer greater order execution speed and transparency, but charge higher commission fees.
STP brokers, on the other hand, have a higher risk of execution slippage as orders go through an additional layer before reaching the interbank market. But STP brokers generally offer favorable pricing. Some brokers may be hybrid, i.e. they offer both ECN and STP execution models.
What benefits does trading with an ECN broker offer?
The main advantages of working with an ECN broker: instant execution of orders, direct access to liquidity, lower spreads.
Is Eightcap a good broker for beginners?
Eightcap will be an excellent choice for beginners, as the broker offers several account options, including a demo account, a low minimum deposit of only $100, leverage up to 1:500, spreads from 0 pips, innovative analytical tools, etc.
What type of broker is Eightcap?
Eightcap offers traders a mixed model of order execution, which includes ECN and STP elements. This means that for some orders, the broker can use ECN (Electronic Communication Network), providing traders with direct access to interbank liquidity, lower spreads, high execution speed and maximum convenience of transactions. At the same time, for other orders, the intermediary offers the STP (Straight Through Processing) model.
This concept means that the broker sends all orders for external execution without interfering in the process, and all transactions are executed at maximum speed. The main advantage of STP is the absence of commission fees when concluding transactions, and the disadvantages are limited transparency compared to ECN.
The combination of these two types provides users with extended opportunities. The hybrid model can provide a more flexible and adaptive approach to order execution, allowing brokers to provide the best trading conditions for their clients in different market conditions.
Eightcap ECN account
Eightcap has developed the Raw account, which uses the ECN execution type. The minimum deposit size here is 100 dollars, and spreads start from 0 pips. The commission is 3.5 dollars per standard lot (each side). The minimum transaction size is 0.01 lots. Within the framework of this account, traders have access to more than 800 instruments, including contracts for price differences on currencies, stocks, indices, commodities and cryptocurrencies.
The Standard account, in turn, offers STP execution for commission-free trading, although spreads here start from 1 pip. Learn about Eightcap accounts and overview of Eightcap spreads.
Comparison of Eightcap ECN account with offers from other ECN brokers
In the table below we have compared Eightcap's offerings with those of two other brokers with ECN accounts.
FXTM started its operations in 2011 and now its activities are controlled by the regulators of Cyprus, South Africa, the UK and the Republic of Mauritius. It offers its clients a variety of financial instruments, no hidden commissions, access to MetaTrader 4 and MetaTrader 5 platforms, professional support and a large number of training materials.
Broker FP Markets, founded in 2005, promises investors more than 60 currency pairs, cryptocurrencies, bonds, commodities, indices and more than 2000 shares. Automated trading, scalping and hedging are also allowed here. FP Markets is a fully regulated broker that offers separation of client and bank accounts.
| FXTM | Eightcap | FP Markets | |
|---|---|---|---|
ECN account minimum deposit | $500 | $100 | $100 |
Leverage | Floating leverage up to 1:2000 | from 1:1 to 1:500 | Maximum leverage 1:500 |
Products Offered | Forex, Stocks, CFDs on stocks, indexes, Commodities, Metals | 800+ instruments including CFDs on currency pairs, cryptocurrencies, indices, stocks, commodities, precious metals | Currency pairs and CFDs on metals, indices, commodities, stocks, ETFs, bonds, and cryptocurrencies are available for trading |
Fee and Spread | Spreads from 0 pips. Simple, flat commission rate of $25 per million face value on FX, metals and CFDs | Spreads from 0 pips, commission 3.5 dollars per lot (per side) | Spreads from 0 pips and commissions of 3 dollars per lot (per side) |
Trading Platform | МТ4/МТ5 | MetaTrader 4, MetaTrader 5, TradingView | MT4/MT5 |
Regulation | CySEC (185/12), South African FSCA (46614), UK FCA (777911), FSC (C113012295) | ASIC, FSCA (South Africa), MISA, FSC (Mauritius), and FSA (Seychelles) |
How do ECN Brokers work?
The principles of work of ECN brokers are as follows:
ECN brokers receive actual quotes from various liquidity providers - large banks, financial institutions and other market participants.
Then they display the best buy and sell prices received from numerous sources, which allows traders to get access to the best quotes.
👍 ECN broker pros
•Liquidity. ECN brokers usually provide access to deep liquidity as they aggregate quotes from various sources.
•Fast execution. Due to constantly incoming quotes and their instant confirmation, traders' orders are executed instantly, which is especially important for those who engage in short-term trading.
• Low spreads. ECN brokers receive quotes directly from liquidity providers, which allows them to offer narrower spreads.
• No conflict of interest. Since ECN brokers are not the opposite party in a transaction, they have no interest in traders losing their money.
👎 ECN broker cons
• Commissions. They charge a commission for each transaction, which increases trading costs.
• Sometimes they impose high requirements for the initial deposit. However, Eightcap sets a loyal minimum deposit - from 100 US dollars.
• Variable spreads. Unlike brokers with fixed spreads, ECN-brokers have spreads that can vary depending on market conditions, which can also increase the cost of transactions during periods of high volatility.
Expert Opinion
Eightcap operates using a optimal scheme that combines aspects of ECN and STP technologies. The broker has implemented the ECN model in the Raw account, providing traders with spreads from 0 pips and commissions of $3.5 per lot. The standard account, in turn, offers users the STP execution style, which is expressed in spreads from 1 pip and zero commissions. Otherwise, the content of the accounts is identical - from the number of available financial products to the level of margin requirements. In my opinion, thanks to the low spreads, an ECN account on the Eightcap platform is especially beneficial for traders who make frequent trades or use scalping.
Conclusion
Eightcap operates on a hybrid execution model, combining the benefits of ECN and STP technologies to provide traders with the most favorable conditions. This includes access to deep liquidity and tight spreads through ECN, as well as no commission fees and minimal risk of requoting through STP.
Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Also, Andrey is a member of the National Union of Journalists of Ukraine (membership card No. 4574, international certificate UKR4492).
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).