Top Forex Brokers – What is ECN ? hearing the word ECN may be foreign to those of us who are new to forex trading. ECN stands for Electronic Communications Network. The ECN type broker is much appreciated by traders, because it not only provides the facility of one buy / sell offer at running prices, but can also provide buying / selling offers from several market maker or bank prices. So that traders will get better running sell / buy prices.
ECN brokers do not have a conflict of interest with traders, they will be happy if a trader is often profitable and actively trades in their company. Because basically, the profit they get is from the spread that is charged to the trader, so the more often traders do trading activities the broker will get a profit. Following are the characteristics of an ECN broker :
- There is no dealing desk
The dealing desk acts as an intermediary between the trader and the market, which is very influential especially when the market is ‘hectic’ (moving fast). if there is no price you want when it moves so fast, your order is rejected.
- Floating Spreads and Tight Spreads
Often times when we trade at ECN brokers the spreads are very thin. There are even brokers who offer a spread of 0 pips. With such a small spread, it’s no wonder that ECN brokers charge a commission in every order process and don’t mark up / down prices on the market. The broker’s income is from the commission they charge the trader.
- Permits scalping
When trading at an ECN broker, we are not prohibited from scalping, this is different when we trade at a non-ECN broker where we are prohibited from scalping. However, there are some ecn brokers that prohibit scalping activities which are very aggressive because they are considered burdensome for their servers
What is benefit trading in ecn brokers ?
Conducting trading activities at an ECN broker is very profitable for a trader, so it’s no wonder that many traders choose this ecn type broker. so what’s benefit trading in ecn forex brokers ? here are some of the benefits you can get
- Trading without strategy restrictions
- A low Break Even Point (BEP)
- Fast trade execution
- Accept scalping, martingale and other strategy
Many brokers who provided a ecn account right now, traders can take advantage of the services provided by the broker on the ECN account. although usually the minimum deposit is not small, this is in accordance with the service that the trader will receive.