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Forex ECN Brokers

3 min read

For new investors, a great number of Forex brokers can be overwhelming. ECN brokers are one of them and understanding their function will help you gain profits as a trader. If you’re looking for a reliable ECN broker on the market, ForexRev offers a ranking for your choice.

The most trusted ECN brokers currently are IC Markets, Royal Financial Trading, and FP Markets. If you want to find your own ECN broker, here are some important details that you know about them.

Who Are ECN Brokers?

The ECN (Electronic Communication Network) Brokers serve as mediators in transactions between the client and the market or interbank system. The clients aren’t limited to individuals. Market traders, single traders, and banks are part of the ECN broker’s clients.

This type of broker develops a marketplace where these clients can deal with each other, submitting offers and bids into the system. They gather orders from retail clients and submit them to the Forex market, where they involve in important transactions. They combine the quotes from several participants to provide a tighter bid.

All transactions are done using IT systems, so the whole process takes a few seconds. ECN brokers’ fees are derived from the commission on the executed transactions. Compared to the Market Maker or MM broker, the ECN broker frequently wins.

What Are The Benefits Of Using A Forex ECN Broker?

You can trade with an ECN broker in complete anonymity. This means that you can deal with neutral prices that show real market conditions.

Trading happens immediately through live streaming. You can see the best final prices and get instant confirmation. There’s no dealing desk and re-quotes involved.

A Forex ECN broker always has uneven spreads because they can’t moderate bids like a dealer. Data is also automated because all traders’ personal trading models can be linked to the broker’s data feed. This gives you easy access to the best bid and prices available.

The only drawback of using a Forex ECN broker is its fixed commission fees for every transaction. However, these fees are way cheaper and more transparent than the fees involved by a market maker. 

What To Look For On A True Forex ECN Broker

  • Variable spreads. A reliable ECN broker will only provide variable or floating spreads.
  • No dealing desk. A true ECN broker doesn’t involve any dealing desk. If there is, then look steer away.
  • No negative slippage. A real ECN broker doesn’t have any negative slippage.

To protect your investment, pick the right ECN broker. Choose 2-3 brokers and compare their trading conditions, rules, and spreads. You can also use a broker’s CRD number to check his work history and disciplinary record. People new to trading and unaware of what a broker CRD number is- can look at various online resources to gather information. To be brief, every broker and broker firm in the US has to register under FINRA (Financial Industry Regulatory Authority) which then assigns them a unique CRD (Central Registration Depository) number so they can be regulated, legally. You, as an investor can use this number too, to check the past records of the ECN broker you want to pick.

ForexRev will list the most reliable ECN brokers on the Forex market based on the review of users. You should have definite criteria of the broker that you’re looking for so you can easily decide on the kind of broker to open your account with.

broker CRD number

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