Raw spreads and fast execution: what traders need to know in 2026

ECN vs dealing desk: understanding what you're trading through

The majority of forex brokers fall into two broad camps: those that take the other side of your trade and those that pass it through. The difference is more than semantics. A dealing desk broker is essentially the other side of your trade. An ECN broker routes your order additional reading through to banks and institutional LPs — you're trading against genuine liquidity.

In practice, the difference matters most in a few ways: whether spreads blow out at the wrong moment, execution speed, and order rejection rates. A proper ECN broker tends to give you tighter spreads but apply a commission per lot. Market makers mark up the spread instead. Both models work — it hinges on how you trade.

If your strategy depends on tight entries and fast fills, ECN execution is generally the better fit. Tighter spreads makes up for the per-lot fee on most 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 what does it actually mean when you're actually placing trades? Quite a lot, depending on your strategy.

For someone placing longer-term positions, a 20-millisecond difference won't move the needle. For high-frequency strategies trading quick entries and exits, slow fills means slippage. A broker averaging in the 30-40ms range with a no-requote policy offers measurably better fills compared to platforms with 150-200ms fills.

Some brokers have invested proprietary execution technology that eliminates dealing desk intervention. Titan FX, for example, built their Zero Point technology that routes orders straight to LPs without dealing desk intervention — they report averages of under 37 milliseconds. For a full look at how this works in practice, see this review of Titan FX.

Commission-based vs spread-only accounts — which costs less?

This ends up being the most common question when choosing a broker account: do I pay the raw spread with commission or a wider spread with no commission? It depends on your monthly lot count.

Here's a real comparison. The no-commission option might offer EUR/USD at 1.0-1.5 pips. A commission-based account offers true market pricing but adds around $3.50-4.00 per standard lot round trip. On the spread-only option, you're paying through every trade. Once you're trading 3-4+ lots per month, ECN pricing saves you money mathematically.

A lot of platforms offer both as options so you can pick what suits your volume. What matters is to do the maths with your own numbers rather than going off the broker's examples — they usually make the case for whichever account the broker wants to push.

Understanding 500:1 leverage without the moralising

Leverage polarises retail traders more than almost anything else. Regulators limit leverage to 30:1 or 50:1 depending on the asset class. Platforms in places like Vanuatu or the Bahamas can still offer 500:1 or higher.

Critics of high leverage is simple: retail traders can't handle it. This is legitimate — the data shows, the majority of retail accounts lose money. But the argument misses a key point: traders who know what they're doing rarely trade at full leverage. What they do is use the option of high leverage to reduce the capital sitting as margin in any single trade — leaving more capital to deploy elsewhere.

Sure, it can wreck you. No argument there. The leverage itself isn't the issue — how you size your positions is. If your strategy needs less capital per position, 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

Regulation in forex operates across a spectrum. At the top is FCA (UK) and ASIC (Australia). Leverage is capped at 30:1, require negative balance protection, and put guardrails on the trading conditions available to retail accounts. Further down you've got the VFSC in Vanuatu and Mauritius FSA. Less oversight, but the flip side is better trading conditions for the trader.

The compromise is straightforward: offshore brokers gives you more aggressive trading conditions, less compliance hurdles, and typically cheaper trading costs. In return, you have less investor protection if the broker fails. You don't get a regulatory bailout like the FCA's FSCS.

Traders who accept this consciously and choose better conditions, offshore brokers can make sense. The key is looking at operating history, fund segregation, and reputation rather than only trusting a licence badge on a website. A broker with a decade of operating history under tier-3 regulation can be a safer bet in practice than a brand-new broker that got its licence last year.

What scalpers should look for in a broker

For scalping strategies is the style where broker choice matters most. When you're trading 1-5 pip moves and holding for less than a few minutes at a time. With those margins, seemingly minor gaps in execution speed translate directly to real money.

Non-negotiables for scalpers isn't long: true ECN spreads at actual market rates, execution consistently below 50ms, zero requotes, and no restrictions on scalping and high-frequency trading. A few brokers technically allow scalping but throttle fills when they detect scalping patterns. Check the fine print before depositing.

Platforms built for scalping will make it obvious. You'll see execution speed data somewhere prominent, and they'll typically throw in VPS access for EAs that need low latency. When a platform avoids discussing fill times anywhere on their site, take it as a signal.

Following other traders — the reality of copy trading platforms

Copy trading has become popular over the past several years. The appeal is straightforward: pick profitable traders, mirror their activity without doing your own analysis, collect the profits. How it actually works is messier than the advertisements suggest.

The biggest issue is execution delay. When a signal provider executes, your mirrored order executes milliseconds to seconds later — when prices are moving quickly, the delay transforms a winning entry into a bad one. The smaller the strategy's edge, the bigger the lag hurts.

Having said that, certain implementations deliver value for those who can't trade actively. Look for platforms that show verified track records over at least 12 months, not just backtested curves. Risk-adjusted metrics matter more than headline profit percentages.

Some brokers have built proprietary copy trading within their main offering. This tends to reduce latency issues compared to standalone signal platforms that connect to the trading platform. Research the technical setup before expecting historical returns can be replicated in your experience.