or they wouldnt be able to charge a commission. This helps limit price manipulation, as current and past information are readily available to all, making it more difficult to act unscrupulously. At one end, the broker obtains liquidity from its liquidity providers and makes it available for trading to its clients. One of the extra benefits of ECNs, over and above the existing legacy online trading venues, is that the networks can be accessed and are often more efficient during "after hours" trading, which is a particularly relevant benefit for FX transactions. ECN brokers also charge clients a fixed, transparent commission on every transaction. When specific order information is not available, it provides prices reflecting the highest bid and lowest ask listed on the open market. Is there negative slippage? With a true ECN broker, there will be no difference. Understanding the Electronic Communications Network, the ECN provides an electronic system for buyers and sellers to come together for the purpose of executing trades. 1998) Suggest new definition. What is an 'ECN Broker an ECN broker is a forex financial expert that uses electronic communications networks (ECNs) to give clients direct access to other participants in currency markets.
Since an, eCN broker only matches trades between market participants, it cannot trade against the client, an allegation often directed against some unscrupulous retail forex brokers. The broker provides a marketplace where these clients can trade against each other, sending bids and offers into the system. Trading with an ECN broker will bring fixed commission fees and tighter spreads. A certain amount of price history is also readily available, allowing for easier analysis of particular trends within the marketplace. This is their profit. If the answer is yes, then youre not looking at a true ECN broker.
ECN, electronic Communications Network (stock market eCN, energieonderzoek Centrum Nederland, eCN, environmental Change Network (UK eCN, engineering Change Notice, eCN, electoral Commission of Namibia (Namibia eCN, energy Research Center of the Netherlands (Petten, The Netherlands). Benefits of the Electronic Communications Network. Any mention of a dealing desk on the companys website and youll know youre not dealing with a true ECN broker. Additionally, no trader has a particular built-in advantage over the other, as they all have equal access to the information. However, great caution must be exercised, as many so called ECN brokers arent that at all/ There are a few questions to be asked, in order to determine whether a broker is honestly offering ECN trading: Are the spreads fixed or variable? This is because they cant control bid/s like a dealer. Automated data, a traders personal trading model and risk management system can be connected to the brokers data feed and matching engine, giving access to best bid and best prices, along with a range of other data.