ECN vs dealing desk: understanding what you're trading through
Most retail brokers fall into two broad camps: dealing desk or ECN. This isn't just terminology. A dealing desk broker becomes the one taking the opposite position. An ECN broker routes your order straight to liquidity providers — you get fills from genuine liquidity.
For most retail traders, the difference shows up in three places: whether spreads blow out at the wrong moment, how fast your orders go through, and order rejection rates. A proper ECN broker tends to deliver tighter pricing but add a commission per lot. DD brokers pad the spread instead. Both models work — it comes down to your strategy.
For scalpers and day traders, ECN execution is generally the better fit. The raw pricing makes up for paying commission on the major pairs.
Execution speed: what 37 milliseconds actually means for your trades
Every broker's website mentions fill times. Claims of under 40ms fills look good in marketing, but does it make a measurable difference for your trading? It depends entirely on what you're doing.
A trader who executing two or three swing trades a week, shaving off a few milliseconds is irrelevant. If you're scalping 1-2 pip moves working small price moves, every millisecond of delay translates to worse fill prices. Consistent execution at under 40ms with a no-requote policy gives you an actual advantage versus slower execution environments.
A few brokers put real money into proprietary execution technology to address this. Titan FX developed a Zero Point execution system that routes orders immediately to LPs without dealing desk intervention — the documented execution speed is under 37 milliseconds. There's a thorough analysis in this Titan FX broker review.
Commission-based vs spread-only accounts — which costs less?
Here's a question that comes up constantly when picking their trading account: should I choose a commission on raw spreads or a wider spread with no commission? The answer varies based on volume.
Here's a real comparison. The no-commission option might show EUR/USD at 1.1-1.3 pips. A raw spread account gives you the same pair at 0.0-0.3 pips but adds around $3.50-4.00 per standard lot round trip. On the spread-only option, the cost is baked into the spread on each position. At more than a few lots a week, ECN pricing works out cheaper.
Most brokers offer both as options so you can pick what suits your volume. Make sure you do the maths with your own numbers rather than relying on the broker's examples — they often favour one account type over the other.
500:1 leverage: the argument traders keep having
The leverage conversation polarises retail traders more than any other topic. Regulators restrict retail leverage at relatively low ratios for retail accounts. Platforms in places like Vanuatu or the Bahamas can still offer up to 500:1.
The standard argument against is simple: retail traders can't handle it. Fair enough — the data shows, most retail traders end up negative. The counterpoint is nuance: professional retail traders don't use the maximum ratio. What they do is use having access to more leverage to lower the capital sitting as margin in open trades — leaving more capital to deploy elsewhere.
Yes, 500:1 can blow an account. Nobody disputes that. The leverage itself isn't the issue — how you size your positions is. If your strategy needs reduced margin commitment, having 500:1 available frees up margin for other positions — and that's how most experienced traders actually use it.
VFSC, FSA, and tier-3 regulation: the trade-off explained
Broker regulation in forex falls into a spectrum. At the top is regulators like the FCA and ASIC. They cap leverage at 30:1, mandate investor compensation schemes, and generally restrict what brokers can offer retail clients. Further down you've got the VFSC in Vanuatu and Mauritius FSA. Lighter rules, but which translates to more flexibility in what they can offer.
What you're exchanging not subtle: going with an offshore-regulated broker means higher leverage, lower trading limitations, and usually more competitive pricing. In return, you get less safety net if the broker fails. No regulatory bailout like the FCA's FSCS.
If you're comfortable with the risk and pick execution quality and flexibility, tier-3 platforms work well. The key is looking at operating history, fund segregation, and reputation rather than just reading the licence number. A platform with a long track record and no withdrawal issues under an offshore licence may be more trustworthy in practice than a brand-new broker that got its licence last year.
Broker selection for scalping: the recommended reading non-negotiables
If you scalp is where broker choice has the biggest impact. When you're trading 1-5 pip moves and staying in trades open for very short periods. At that level, even small variations in execution speed translate directly to the difference between a winning and losing month.
The checklist is short: raw spreads from 0.0 pips, fills under 50 milliseconds, a no-requote policy, and explicit permission for scalping and high-frequency trading. Certain platforms claim to allow scalping but add latency to execution if you trade too frequently. Read the terms before funding your account.
Platforms built for scalping will say so loudly. They'll publish execution speed data somewhere prominent, and usually throw in VPS access for EAs that need low latency. If a broker doesn't mention fill times anywhere on their site, that's probably not a good sign for scalpers.
Copy trading and social platforms: what works and what doesn't
Copy trading took off over the past decade. The appeal is simple: identify traders who are making money, copy their trades automatically, and profit alongside them. In reality is messier than the platform promos make it sound.
The main problem is the gap between signal and fill. When a signal provider executes, the replicated trade goes through milliseconds to seconds later — during volatile conditions, those extra milliseconds might change a winning entry into a worse entry. The more narrow the strategy's edge, the worse the lag hurts.
Having said that, a few implementations work well enough for people who can't monitor charts all day. What works is transparency around audited performance history over a minimum of 12 months, rather than backtested curves. Metrics like Sharpe ratio and maximum drawdown are more useful than the total return number.
A few platforms build in-house social platforms integrated with their standard execution. This can minimise the execution lag compared to external copy trading providers that connect to MT4 or MT5. Look at whether the social trading is native before assuming the lead trader's performance will translate to your account.