Many people have come across the term ‘ECN broker’, and if you are an online trader there is a good chance you actually use one on a regular basis. ECN stands for Electronic Communications Network, which is the place where online trading take place, and is used my millions of traders across the world. Here is some further information on ECN brokers.
The main purpose of an ECN broker is to allow the user to conduct trades in markets of their choosing, which involves allowing them to access multiple different markets. They usually charge a commission on each trade, but they generally offer better bid/asking prices compared to market makers.
Since markets are constantly shifting on a second by second basis, ECN brokers are required to facilitate trades extremely quickly, so speed of trade execution is a significant selling point for the services of these types of brokers.
Legitimate ECN brokers should never trade against you, and they usually offer numerous advantageous features which are used by traders on a daily basis. Some, for example, have economic calendars which are updated daily to keep traders well informed of upcoming economic and political events (which can have a significant bearing on market behaviour).
They also have graphs and charts which map out previous and current market behaviour/trends, something which is incredibly important for technical analysis. Most of these tools are now classed as trading essentials, so they are constantly being updated to meet the demands of traders.
How to Use an ECN Broker
To use an ECN broker, you first need to open an online trading account. It is worth noting that many brokers offer demo accounts which allow you to practise trading without investing any actual money. This can be an effective way of learning the ropes if you are an inexperienced trader.
Once signed up, you will be able to use an ECN broker to execute trades in the markets of your choosing, and hopefully develop a strategy based on informed decisions and experience. Make sure you research the market thoroughly, however, and do not rely solely on the tools which ECN brokers offer.
This is a quick introduction to ECN brokers, so, if interested, look into them further and decide whether you would like to explore their various offerings. They are probably the most popular type of trading broker, and are likely to fulfil the majority of your trading needs.