FxOpen Review – A Swap Free Zero Spread ECN Broker

Electronic Communication Network (ECN) has become a popular form of technology that revolutionized the way of foreign exchange trading. It can be defined as an inner connection between small trading markets and tier-1 liquidity providers that takes place through an ECN broker. Its model enables traders to enter the interbank market and utilizes market execution. This means your order will be filled in the interbank market, but there may be a discrepancy between the execution price and the price you requested when placing your order.

Before You Read the Rest of This Article:
Submit your email to receive our eBook for FREE.
This eBook shows you the shortest way to achieve Success and Financial Freedom:

About FxOpen

According to FxOpen website, this brokerage is is an ECN broker that centers around a unique form of technology created especially for margin trading in Forex. Entities typically involved with ECN include private investors, large businesses who contribute their services to OTC Forex (over-the-counter) market, centralized exchanges, and banks. Clients of this brokerage can benefit from institutional liquidity and fast order execution that is error-free. Professional traders who engage in scalping as their major form of trading are allowed to become clients of FxOpen.

Those who participate in the ECN model:

  • Have equal rights when executing orders.
  • Make transactions in an environment that is completely transparent.
  • Can act as either liquidity receivers or liquidity providers.

Clients of FxOpen ECN are offered aggregated liquidity from numerous parties that participate in the Forex market, enabling them to easily and quickly execute orders of large volumes. FxOpen practices an updated approach to aggregating liquidity in the foreign exchange industry. With their premium technology, market participants are provided with:

  • ECN liquidity.
  • Tight spreads.
  • Fast execution that is free of errors.
  • Market depth display.
  • The ability to act as a liquidity provider.

Note: Most traders didn’t know what the difference of ECN and Market Maker brokers was. Therefore, brokers were not used to explain whether they were ECN or market maker. Now that most traders know about this topic and are interested in ECN accounts, most broker claim that they are ECN, whereas this is not true. Therefore, if you want to sign up for a live account with a broker, don’t trust them just because they say they are ECN. They have to prove it through handling your orders, the spread they offer, commission and… . Just test the water when you open a live account with a broker and if you see they have lied, withdraw your money and close your account. FxOpen is not an exception.

Read this: 6 Ways Forex Brokers Cheat You

Their Business Model

FxOpen aims to offer a variety of trading accounts to its clients such as STP, Micro, ECN along with demo accounts with no limits. Also, they intend to optimize the capabilities of traders who use Myfxbook and Zulutrade trading systems. By providing PAMM technology, novice traders can benefit from the same strategies that professional traders use. Islamic traders are also encouraged to trade as they can benefit from Forex trading and not violate the Sharia law, assuming they use SWAP free accounts.

Clients of this brokerage firm get real-time quotes from the industry’s biggest liquidity providers. Likewise, FxOpen promises ultimate customer support in addition to strict compliance with all trading terms and conditions. Also, state-of-the-art technology based dependability is another feature that FxOpen prides itself on.

Note: Swap free accounts, micro accounts and… are all signals indicating that a broker is not a true ECN/STP that routes the order to the real currency market liquidity providers. The reason is that there is no professional and strong liquidity provider that offers swap free positions and micro lots (0.01 lots).

FxOpen History In Brief

In 2003, FxOpen began as an educational center. In 2005, it became a Forex brokerage service, that has striven to make Forex trading more professional, secure, and easily accessible. Because this firm was created by a small group of traders, its main incentive is to focus on the interests of traders as a whole. Over the years, FxOpen has dramatically improved as an educational center and to this day, it continues to grow quickly.

As an educational center, FxOpen provided courses in financial markets and the field of technical analysis. After becoming a brokerage service, it progressed to meet the increasing needs of fair and transparent trading conditions in addition to superb customer service. In 2006, it became the first Forex broker to offer swap-free Sharia compliant accounts as well as micro accounts.

Note: Offering swap free account is possible only on a market maker system or through a market maker broker as a liquidity provider.

Three years later (2009), FxOpen added the MT4 trading platform combined with the 0.1 lot minimum and PAMM technology to its services. At that time, it earned the awards of Best Forex Broker of 2009 as well as Best Middle East and Asia Broker of 2009.

During 2010, FxOpen decreased the minimum spread on ECN accounts down to 0. It also launched its FxOpen Partnership Program along with the FxOpen Client Support System. The World Finance magazine listed this firm as one of the top 100 companies. That same year, it received the Falcon Award as The Best Trading Platform.

Note: A true ECN/STP broker cannot have any control on spread. They can add markups to the spread that increase the spread or cause price slippage, but they cannot lower the spread. It is only the market maker brokers who are able to offer even zero spread, because everything is under their control. They are the market.

In 2013 and 2014, FxOpen added several more features to its services as:

  • One-click trading and level2 plugin giving the MT4 platform better order management. Speedy orders can be process, especially when the markets are volatile, all with a single mouse click. Because the market is five levels deep, you can readily determine the volume of liquidity for any currency pair.
  • The opening of the London office and its website: www.fxopen.co.uk.
  • Ticketing via the Customer Support portal.
  • STP accounts with ECN liquidity, requiring an initial deposit at $100 minimum.
  • Verifications, confirmations, and notifications via SMS.
  • As a mutual effort, FxOpen and ForexCup create the regional Forex trading championships as China Championship, Asia Championship, and Russia Championship.
  • More payment options including withdrawals to credit and debit cards, local bank transfers, Yandex Dengi, OneCard, Dengi Online, Netbanx Asia, and Neteller.
  • Crypto accounts that enable retail and corporate B2B clients to obtain price feed.
  • Two factor authentication between Google Authentication in MyFxOpen Trader’s Personal Area and SMS.

Demo Account

Many new traders are novices or perhaps, beginners. If you’re trading for the first time and are leery of putting your own hard earned cash at risk, you may want to consider a demo account through FxOpen. Trading via a demo account mimics real live trading, except your money is not at stake. As you do, you can experiment with new and different trading styles and strategies. FxOpen regards demo accounts as part of their educational resources.

Opening one is fast and easy and takes less than a minute. Best of all, no sensitive financial information or special documents are required. Simply fill out a brief registration form and you’re on your way.

Platforms FxOpen Uses

MetaTrader4 – More than 90% of all Forex trades are executed via MT4. However, in 2009, FxOpen was the very first brokerage firm to offer it to its traders while granting them direct access to interbank liquidity in addition to use of the MT4 terminal. This platform’s regular capabilities have been expanded through FxOpen’s proprietary revolutionary solution also termed as Liquidity Aggregator. Hence, FxOpen ECN claims to offer instant order execution that is purely error-free. Best of all, its transactions are processed at the lowest prices from over ten banks and other liquidity providers.

Note: These are what FxOpen claims. We are not confirming them.

Keep in mind, if you prefer to use STP and Micro accounts, you will need a different version of MT4: one other than that used for ECN accounts. Hence, it is crucial that you download the correct version to ensure compatibility with your type of trading.

Platforms offered by FxOpen include:

Mobile platforms – You can take complete control via trading with a smartphone, tablet PC, iOS, WinMobile, or Android. This ensures that no matter where you are, you can depend on these apps being available on the go.

With the mobile Forex trading apps, you can:

  • Utilize charts that are interactive.
  • Analyze trends on the market via technical indicators.
  • Put through market and pending orders.
  • Obtain push notifications as relevant events happen.
  • Review detailed accounts and statements of your account balance and open trades you placed.

FxOpen Trading Tools

Naturally, an in-depth comprehension of the Forex market is imperative. Likewise, successful trades necessitate precision, promptness, and transparency, along with a competent level of risk management. Also, margin, pip value, SWAPs, and ECN commission calculated accurately will ensure optimal planning of your trades, anticipated profits, and optimized lot sizes. Supposedly, you’ll have more time to concentrate on market analysis while routine calculations are done for you. This includes the one-click trading and level-2 plugin as mentioned earlier.

With the margin and pip calculation tool, you can simply calculate margin and pip value prior to opening a trade. Likewise, it will help you determine the optimal leverage for your trades. As a result, you can minimize your likelihood of encountering a loss and stop out. Calculations are made according to real time quotes as well as your account’s leverage and equity. If any of your parameters change, you can automatically make recalculations within seconds.

By using the Currency Rates and Conversions Calculator, you can obtain exact conversion rates with FxOpen’s multi-currency accounts. This is essential when switching between several accounts, each with different base currencies. Likewise, you can look up historical rates based on a date you choose.

Additionally, you can utilize their user-friendly Commission Calculator to obtain fast and accurate ECN commissions. It enables you to find half-turn or round-turn calculations for any currency pair or metal along with any lot size.

Other Extras

FxOpen offers additional perks as:

  • Cryptocurrency trading via using Peercoin, Namecoin, Litecoin, or Bitcoin.
  • A variety of trading accounts that are appropriate for traders of all experience levels and investments such as Micro, Crypto, ECN, and STP.
  • Maximum leverage as high as 1:500.
  • Account statements generated daily and monthly.
  • The most up-to-date economic news, Forex calendar, and expert market analyses.
  • Numerous quick and dependable payment options.
  • FxOpen help
  • A large network of representatives and offices.
Loading

How Do You Rate FxOpen?

Thank you for voting
You have already voted on this poll!
Please select an option!

Published by

LuckScout Team

"Whether you think you can, or you think you cannot, you are right." - Henry Ford

47 comments:

  1. Hi

    From your comments, it sounds like open are market makers rather a true ecn/STP brokerage.

    I have a demo and live account with them, but have never traded live with the account.

    The money deposit system is a bit complex. In order to put money into the account to have create another account with a site called skrill. They go through a secondary versification process of your identity before you can make a deposit. After this you are set up with an e-wallet for your deposits.

    Regards

    Honto

  2. I do not think that United States Citizens can use this company. But it sure sounds like a great place to trade.

  3. Great review. I try to avoid them.
    Other brokers you could perhaps write about: LMAX, MB Trading, Interactive Brokers

  4. Hi, Thanks again for this insightfull article, much appreciated. Due to previous articles, I searched the web for ECN brokers, found several lists, just to establish that brokers mentioned on these lists are in fact not ECN brokers. Do you perhaps have a link where I can find reputable ECN brokers? PLEASE, regards, Paul

  5. I’m waiting review brokers from Australia based: Axitrader, IC Markets, Vantage.
    They are features almost same.

  6. Hi,

    Whey the poll is named “How Do You Rate IB?” although the article is about FxOpen?

  7. I have a demo account with PFD NZ. When I asked them how they made their money they said:

    “PFD’s trading income generally is the difference between the first best quote it uses for clearing or hedging trades with and the second best quote it offers to clients for trading.
    Therefore we are able to offer commission free trading in PFDTrader (MT4).
    We have PFDPro (MT4) in which we offer original spreads as we receive from LPs to clients and therefore charge US$1 per side as commission for Trading.
    PFD is not a market maker and it is a NDD broker.”

    So they use 2 systems.

    When the USDCHF tsunami happened in mid January they had an enormous down-wick 0.41083 low compared to CM 0.19204. when I inquired if they suspended trading their reply was:

    “On that day, we recall a window of time when the market became illiquid as the LPs we are FIX connected stopped streaming data.”

    Still not sure if I’m being boggled by science…….!

  8. Hi,

    I found a broker with true ECN/STP specifications (they also claimed to be one):
    1. Minimum margin is $200
    2. Spread is floating (possibly 0)
    3. Commission is $5-$11 per 1 lot
    4. Leverage is 1:100
    5. Stop out level is 100% from the margin calls
    6. Swap type is without requoting
    7. Trailing stop is allowed min 15 points
    8. Offer low spreads (for examples eurusd average spread is 0.5 pip and gbpjpy average spread is below 2.0 pips)
    9. They mentioned on their site “At the same time all orders for selling and buying are available and displayed to the trade participants in the so-called “open book”, besides the participants can also see the accessible volumes for each financial instrument

    The negative point is this broker isn’t a popular broker so I’m not sure if it is a true ecn/stp broker, also I don’t quite get what #9 implies.. Do you think it’s a true ecn/stp broker? Thanks a lot in advance

    1. Hi,

      The minimum is 0.1 lot.

      Oh also, does “min margin $200” mean I should trade $200 for at least 1 position (for example eurusd 0.1 lot with SL 200 pips)? Thank you!

    2. To trade one standard lot EUR/USD, a $1049.50 margin is needed. Therefore, to have a minimum of $200 margin, you have to trade 0.2 lot at least:

      $1049.50 / $200 = 5.2

      1 lot / 5.2 = 0.19 lot

    3. Hi,

      Thanks for your explanation! I got it.

      Anyway, what do you think about the broker specifications that I mentioned before..?

  9. Maria who is this broker, i would like to take a look. Thanks!! Im still looking for Q true ecn broker

  10. Hi,

    I found something about A book and B book business model which broker use.
    If I understand correctly A book model is take losses during the Swiss tsunami event but B book brokers didn’t because orders are not proceeded to Liquidity Provider.

    Can you please explain what that mean, if you find that this is relevant to add.. If not, just forget and dont submit my comment, I will understand..

    Here are the links

    http://leaprate.com/2015/02/discussion-panel-is-the-a-book-here-to-stay-post-swiss-franc-event/

    https://www.youtube.com/watch?v=griddN61NCA

    Best Regards

    Goran

    1. Yes, they increase the spread dramatically to make more negative positions hit the stop loss, and also accounts with too many negative positions reach the stop out level easier.

  11. Hi, thanks again for this wonderful and insightful article, much appreciated. I am looking a true ECN/STP BROKER. Open are they A true ECN BROKERS? because:- Islamic traders are use SWAP free accounts and the ZERO spread? a bit confuse me.
    thanks

  12. hi I sent a question about FxOpen broker yesterday ,I could not see your answer even my question I don’t why?

    1. Hi Berket,

      There is no way to find out whether they are ECN or market maker, unless I had a live account with them. We can ask those who already had a live account with this broker. Hope LuckScout users answer this.

  13. HI. I am slowly researching for ECN broker. The one I spoke to seems real as they offer leverage 1:100 only rather than 1:400, the minimum deposit is 2000$. There is a commission swap as well and very tight spreads. They listed in Nyse as they say. The only question mark is that you can trade 1k lot which is not professional, but maybe its become a common practice, to offer micro accounts just to get more clients, what do you think? Thanks!

    1. Marek,

      If they have been able to attract your attention, then open a small account with them and trade for a while to see how they deal with a profitable trader.

  14. Is it not one of the main tasks of the regulaors of financial markets to secure an appropriate degree of protection for consumers. So all this cheating should not be possible.

  15. Dear,

    Thank you for your Open review.

    As we feel that some information provided by you is misleading and we would like to provide more information on some points.

    Your theory that Open is not an ECN broker is based on the following points:
    – Open offers swap-free accounts
    – Open offers micro accounts
    – Open allows to trade 0.01 lots on ECN

    We would like to clarify several points:
    – Open Markets Limited does offer swap-free accounts for Muslim traders. Additional commission applies in case of overnight positions and is charged at the rollover.
    Open Ltd (FCA regulated) and Open AU Pty Ltd (ASIC regulated) do not offer swap-free accounts.
    – Open Markets Limited do offer micro accounts. Our micro account business is fully separated from our ECN/STP business. Moreover, our micro accounts are run on a different technology which we have never claimed to be ECN/STP.
    – 0.01 lots on ECN were introduced two weeks ago. You are right, previously it was very difficult to find a liquidity provider who would accept 0.01 lots. As of today, retails trading volumes play an important part in the whole industry, which caused almost all liquidity providers to accept 0.01 lot tickets.

    Another thing that you mentioned is that “Offering swap free account is possible only on a market maker system or through a market maker broker as a liquidity provider”.
    We would like to draw your attention that each trade needs a counterparty to be executed. Therefore, there is always someone (a bank, a broker or a proprietary market maker) down the liquidity provision chain who takes the opposite side of the trade. If a broker had only A-book liquidity providers who in their turn had only A-book liquidity providers and so on, the trade would never get executed because of the lack of the counterparty who would take the opposite side of the trade.

    And the most important 0 pips spread question:
    You are right, an ECN broker cannot influence spreads received from liquidity providers. Most ECN brokers offer raw spreads further to their clients.
    Most liquidity providers feed raw spreads to their partners – ECN brokers . And if broker’s liquidity provider base is well-diversified (e.g. banks, other brokers, HFT funds, algo-traders), it is not that rare to see that the spread is actually negative and the arbitrage opportunity presents itself.
    However, technical restrictions of the MT4 platform do not allow to show the spread that is lower than 0 pips.
    Our clients who use our Tick Trader platform have the possibility to see and trade on negative spreads.

    Please feel free to post here or to get in touch with us directly at [email protected] for more information.

    Best regards,
    Open

    1. Teo,

      Thank you for your feedback.

      We are not here to sabotage any company credit. In contrast, we love to see that all traders are happy with their brokers and the brokers are offering their services properly. This makes novice traders hopeful to have a brilliant future after they learn how to trade.

      Glad to hear that FxOpen is an ECN/STP broker. This is much better for traders, although I have never said that it is bad or illegal to be a market maker broker. I strongly believe that it is possible to be a good market maker broker too:
      https://www.luckscout.com/market-maker-brokers/

      I have also warned people against the true ECN/STP brokers that make money through the illegitimate ways like adding markups to the orders.

      If a broker, either market maker or ECN/STP, deals with the clients fairly, and clarifies everything for them, then there will be nothing to be worried about, and there will be no complaint.

      Thank you and good luck 🙂

    2. you offer 500:1 leverage.
      How do you handle your 500:1 clients`s orders?
      500:1 leverage on true ecn model,
      It is really possible?

    3. you offer 500:1 leverage.
      How do you handle your 500:1 clients`s orders?
      500:1 leverage on true ecn model,
      It is really possible?
      and
      your full slippage control,
      How can you it on the ecn environment?

  16. Hi,

    Can we therefore assume that Open has met with your approval?

    Not that I’m saying you are endorsing it (for legal reasons, of course)

    But do you approve? We are really tired! Give us a bone.

  17. Dear Open,

    Could you also say something about your practice of increasing the leverage on weekends ( and I think at off-peak time during the week) by over 200% i.e. from 1:100 to 1:30. Why do you do this? Is it in the interest of your clients? Or don’t you know that it is detrimental to your clients?

    Thank you,
    Mahalaleel

  18. Dear Mahalaleel,
    Open has no practice of increasing the leverage either on weekends or on week days. You must confuse us with another broker. Please provide proofs or sources on the ground of which you make such claims.
    Best regards,
    Open

  19. Hi,
    What is the benefit of high leverage? (such as 1:3000)
    What is the benefit of zero spread account?

Comments are closed.