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A Guide To Answer: What Is ECN Trading?

ยท 21 May 2019 in Guides

Forex Trading is a well known thing and people know about it at least even if they have not tried getting into it. The word Forex itself defines that it is all about Foreign Exchange and that sums up it all. However, Forex Trading is not that easy and simple as it sounds to be and there is something much more to it.

This shares a lot in common with trading cryptocurrencies—as both deal with exchanges of value on an international scale and feature traders concerned with finding value based on price movements and charts.

Here comes ECN Trading and this needs to be explained in detail as it is all about Forex trading. The word ECN stands for Electronic Communication Network which is the future aspect for the Foreign Exchange Markets. ECN in best words can be explained as a bridge which links the small market participants with its liquidity providers through ECN Forex broker. Thus an ECN broker is an intermediary or we can say is a platform between the two.

ECN is the future of trading when it comes to forex and electronic tradeable assets like Bitcoin or Etherum. With prices moving dynamically, ECN trading helps crypto traders find value in their buy or sell trades and to be able to do this at lightning quick speeds.

People associated with Forex Trading know that Forex trading doesn’t take place on any regulated exchange the way other things like shares and it occurs between the buyers and sellers located anywhere in the world using or through an Over the counter (OTC) marker. In order to access to this market to buy and sell you need a broker. As this market where you buy and sell is not regulated and centralized you get to access different exchange rates and trading conditions on the type of broker that you deal with. Thus if you need to be a successful forex trader you need to choose a right forex broker.

The way an ECN broker works is simple as it is a Forex financial expert who uses a network ECN Trading Platforms which offers direct access to the other participants in market to its clients. The way it works is that it consolidates quotes from various participants who are in the current market to offer a tighter bid to its clients. This way it is just not an individual who may take the advantage of this tighter bid but its clients who include banks, market traders and individual traders all get benefit. This broker provides a platform where these clients may trade against one another by sending’s and offering bids into the system. All the interaction which is the trading activity takes place in the system and present traders can get the best proposal at a given time.

ECN Forex broker offers advantages such as

  • Complete safety to your trading activity as your forex or crypto trades through ECN broker are completely anonymous for your safety. Now traders have an advantage to deal on neutral process that reflects real market condition which is better to trade.
  • ECN Forex Broker offers you instant trades via live streaming and thus you get the best final prices as well as you get instant confirmation of your trades without any delay. Trader does not have to go through any dealing desk and wait for the trade to confirm or get final.
  • Data automation is another advantage with it as the traders trading data and risk management system may be connected to broker’s software thus giving the trader an access to the best bid and at the best prices with access to other information.
  • Trader also gets the benefit of variable spread in this dealing through an ECN forex broker.

Conclusion

Thus dealing through an ECN Forex broker is a smart way to deal and make some meaningful profit. As cryptocurrency trading becomes more mainstream, traders will find ways to utilize ECN networks in order to take advantage of the items listed above.

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