What is an ECN Forex Broker?

The ECN in ECN Forex Broker stands for "Electronic Communications Network" or ECN broker and is not the common in forex trading. An ECN broker does not have a fixed spread, as the buying and selling rates vary depending on market conditions. There are many fx brokers that offer a fixed spread, many of which are less regulated than ECN brokers. An ECN offers a flexible spread but with better prospects of success. In addition, orders from customers on a commission basis. The trading cost is still cheaper than in a forex broker with a fixed spread. Forex Broker fixed spreads typically take the opposite position of customer orders, while Electronic Communication Network brokerage transmit orders to the interbank trading. An ECN brokerage is a middleman, a fx brokerage with a fixed spread the terminus of the order.

With an ECN broker you can see the true market depth, so know what the supply and demand really is for the market. You will see the number of buy orders and sell orders at specified price thresholds of the ECN broker that it joins. In addition, the trading is anonymous, as we see not who made the buy and sell orders coming.

Electronic Communication Network brokers are one or more channels connected directly to the interbank trading. In addition, to open an account with an ECN forex broker is usually starting from 5000 US dollars, with the headquarters of the company of an ECN brokerage mostly in the US or Britain. Deposits and withdrawals by bank transfer only possible with credit card and do not like the whole Forex brokers with a fixed spread. As mentioned these brokers do not trade against their clients, but will forward orders to the interbank trading. Stop Hunting and strong extensions of the spread do not occur as there is a real interest in ensuring that you get on the Forex market continuously gains.

Source by Alyssa Haaland

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