Account types

Hello, Forex traders!

Im a newbie on this forum and almost total noob on Forex market. Ive already learned everything from the School of Pipsology and also traded on demo a bit. Now, Im thinking about creating mu first live account and have some problems with it. There are too many brokers and a lot of account types. I want to scalp. I read, that ECN accounts with low spreads are the best for it. But I dont really understand why.
What`s the difference between Classic, ECN and NDD? Which is the best for newbie?
Please, help me to figure it out.
I will be grateful for any advice.

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Hello!
Long story short… In ECN, your orders are transferred to the interbank (to the liquidity providers of your broker). In Classic, your broker executes the whole transaction. NDD is something like an intermediary.

ECN have low spreads, but there are commissions too, so pay attention to them. I think that this option would be optimal for a pro, and beginners сan pay more attention to cent or micro accounts. Not all brokers have them, but search and you’ll find.

If you don’t want to work with cent account, deposit some little sum just to try trading live. Don’t be in a hurry, cause you’ll get a great loss instead of big win. 99% of ambitious newbies prove it every day.

How long have you been trading on demo? What was your profit? And what about losses? Does your strategy work correctly?
Answers to these questions will help you to make a final decision regarding an account type. If you don’t have exact answers to them, I advice you to practice more on demo or at least open a little cent account. You won’t lose much if you do.

Anyway, I want to wish you profitable trading and inspiration!

So, actually only ecn accounts provide real trading on Forex market? Am I right?
Still don`t understand which account type is better for scalping.

Ive been trading for about a month on demo. Sometimes I win, sometimes I lose, but my profits are bigger, than losses. So Id like to try live. Maybe, youre right and its better to start with cent account. But anyway, I want to learn more about account types. Because there`re is a mess in my head.

What about cent accounts? Does it also classified into ecn, ndd and classic?

I also can`t realize how to identify which account is ecn, which is classic. Sometimes brokers write it in contract specification, sometimes not.

Complete confusion!

I understand your thoughts :smiley: cause I had similar thoughts at the start
I can’t say exactly about all brokers, but… cent accounts are not ecn usually, cause there is no sense for brokers to transfer such small amounts of money to the interbank

As for scalping… there can be slippages on ECN as transferring deals to liquidity providers through the servers takes more time. If you choose classic, the execution may be faster, cause a broker does everything within their own funds.
Have you heard about “market makers”? classic and cent accounts are about them actually. It is not so scary as people say, but you should be careful, of course, and not to trust any market maker on the market. at least choose one that works for a long time and has a license.

I think that practicing on a cent one is ideal for you, but when you become more experienced, try all of them (maybe with small deposits), and choose what you like the most.

As for account types in general, sometimes brokers name them in other way, but they are classic in fact. Maybe you’ve met such types already.

Anyway, I advise you to look at commissions, currency pairs and other conditions before opening an account.
Sorry, it’s hard to me to distinguish some exact and correct answer to your questions as I don’t know what do you know already, and what you don’t. Of course, finding the difference between ndd and ecn may seem difficult for a novice, even for one who has attended the Babypips school :slight_smile: But it’s not so complicated.

How much are you going to invest , if it’s not a secret?

I was thinking about $50 at first. But if I choose cent account, maybe Ill start with smaller amount. I heard, that therere is no sense to start trading with less than $500, what do you think about it?

I heard about it. But I still don`t understand why should I avoid it :slight_smile:

So, some brokers dont have ecn accounts at all? Does it mean, that its not reliable ones? Or it`s ok?

alextrader79,
and what about you? What account type do you prefer?

Jusuf, I advice you to read the course once more and then read investopedia, forex factory and other forums. read also the conditions for any account. If you have difficulties with understanding what account is better for you, take a peace of paper, write the details of different accounts. You will see the difference clearly
look at simple numbers.
spread from 0 pips would be better for you than spread from 1 pips. 0 dollars commission on classic would be better for you as a newbie than 2$ commission on ecn
and so on , and so on…
it will take you a couple of hours to do a research.

I agree with Alex about market makers. they can be dangerous, and you can lose money with some of them, still, not everyone are cheaters, so you should invest your time in this research either.

I want to note that I started with classic account due to the best conditions that I found during my research. bot i have different opened accounts: demo, classic and ecn. brokers alloow that

And what about spreads? What is better - floating or fixed spreads?

if you scalp, floating, of course
They will be smaller than fixed spreads. moreover, note that it also depends on the certain accounts, very often classic have fixed spreads while real ecn can have ONLY floating spreads (beware of those brokers who say that their ecns have fixed spreads!!)
as for Classic accounts, one can figure out his possible profits more accurately.

oh, almost forgot! All spreads (fixed as well) can widen during news, so better don’t trade in this time…

and one moment more. scalping… there can be more slippages on ecn , but spreads are smaller.

Hm… not very big sum, it’s ideal for a cent account. I fully agree with that statement and speaking of classic accounts, at least 200-300 dollars is nice. Some brokers have a certain min deposit for ECN-s, for example, $500.
If you have $50, try trading them on Cent, but not classic account, that is what I would do.

Marker makers now. Some companies use the scheme to cheat traders and to win from their losses. That’s why a term ‘MM’ has become a synonym to ‘scammer’. There are some exclusions from this rule, but be careful if you choose a market maker. Check if ecn accounts are REAL , that is what @hafizmohd81 said, as many mm’s pretend to have ECN-s, but it will be a Classic, not more

If a company doesn’t have ECN account, it’s likely a market maker, I would think twice before depositing there…

I work on ECN when I trade medium term, there is a real market execution and Level II
I also use a Classic account for scalping and risky trades sometimes



Here is how my ecn transaction looks like. I use it when I want to get real market quotes

PS hope the pic is opening? Can’t get how to insert it here in another way

Actually, you should`t focus on the name of account, just look at the trading terms. Sometimes, brokers name the accounts not according the logic, just to confuse you.
There some tips how to find out if the ECN account is real or not:

  1. The execution method MUST be Market Execution.
  2. Broker always take commission from ECN.
  3. ECN always have floating spreads.
  4. Five-figure quotation.
  5. Account should contain market depth.
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No, I can`t open the image, but thank you anyway. I understand.

Thanks so much, very useful information.
Thats why I had such a mess in my head, every broker has its own account types.

It`s quite easy to understand Alpari and JustForex account types and its trading conditions. By the way, they both have ecn accounts. Are they true ecn, how do you think?

And the trading terms of some brokers, for example, Exness and Octafx I just don`t understand. Are there ecn accounts?

Alapri and JustForex offer ECN style accounts, as do 95% of all other retail brokers - very different from [B][U]true ECN Accounts.
[/U][/B]
Trust me when I say there is no way for any less than perhaps $25,000 you will be opening an account with direct market access. Retail brokers offer retail accounts for retail traders - you are never ever buying or selling anything with a retail broker, you are simply placing a bet with your broker which is based on real market data. The broker offsets all there clients long and short positions in-house, any remaining risk is then typically placed into the real underlying money markets.

There is nothing wrong with retail brokers offering ECN style accounts, but try not to get confused between the two.

Hi! I also has a question - does it any matter the amount of instruments of account?
If we consider this brokers - Alpari has 48 currency pairs, Justforex - 88 pairs, Octa - 35, and Exness - no information… So, what is better?)) :rolleyes:

In fact they are all similar, just names differ. It is done for marketing…
All these companies work as market makers, some of them just have an option of trading on ECN through liquidity providers (if we look through the websites, well see this info)
It seems to me that Justforex and Octa DO have ECN-s. I am not sure about Alpari, I am sure it’s a market maker, but can’t see if their ECN is ECN indeed, honestly saying, I haven’t worked with them
Exness offers only Classic and Mini (it is similar to Cent accounts), and I don’t see any ECN-s there.

So, if you want to choose from this list you have made, look at ECN-s of the first two. But also read more about conditions before depositing and remember that it’s always better to start with a cent account. It is less risky for a newbie. you won’t regret much no matter what happens - blowing a $20 account is not the same thing to losing a $500 one.

Wow, $25,000 is too much.
If youre wright, there are no brokers with real ECN account, Ive never seen a broker with $25,000 minimal deposit.
A lot of people say, that they trade on ECN accounts with smaller deposits. So, all of them are confused?

I think, wide variety of instrument is good, you always have to choose from.
On the other hand, most of traders trade with majors and other instruments are not so popular.

So, I`ll not get an access to the real market, but the trading will be completely the same as if I traded on market directly. Did I understand you correctly?