Understanding ECN brokers

ECN Brokers

Brokers are essentially important in the execution of trades. By definition, they are the mediators in exchanges who execute the orders between a buyer and a seller. They act as the middlemen to negotiate and get the best deal for their clients. There are different kinds of brokers, however, in this article; we will be focusing more about ECN brokers.

What is an ECN broker?

ECN generally means “Electronic Communications Network”. This is the system that ECN brokers use to interact with their clients. These brokers offer only true spreads to their clients. That is, tighter bid and ask spreads. Although in exchange for this, they charge a fixed commission on every transaction, earning bigger profits depending on the volume of the trade. ECN brokers also offer lower leverage and higher minimum capital to keep up with the requirements of interbank trades.

What makes ECN Brokers different?

ECN brokers work by matching market participants, thus they do not trade against their clients as opposed to retail brokers. They go straight to the interbank. ECN brokers promote market transparency by providing everyone equal access to market information. They also offer real time prices in the marketplace, resulting in the best bid and ask prices. And since there is no dealing desk to intervene, execution is fast and immediately done as soon as the trader places the order. For traders who usually deal with huge amounts of capital, ECN brokers also offer a level of anonymity.

Electronic Communications Network

ECN or Electronic Communications Network is an electronic system for buyers and sellers to come together to make trades. It does this by giving access to information and facilitating the execution of orders. An ECN platform is designed to match buy and sell orders that are currently present in the exchange. It also works to provide the highest bid and lowest ask when a specific order information is not available.

Some of the advantages brought about by ECN brokers are:

Allow trades outside the usual trading hours
No manipulation of market prices
Provides a level of anonymity
Avoids wider spreads
Transparency of market information available for everyone
Immediate and fast execution of orders
Lower commissions and fees.

Trade12 Website

One online trading brokerage company that offers the service of ECN brokers is Trade12. It is a reputable international broker with years of experience in the field. Read Trade12 review to ensure the trustworthiness of Trade12. Equipped with ECN brokers and multilingual customer service representatives that are always available, clients are sure to experience an exceptional level of satisfaction. Register an account now and start trading with Trade12!


6 thoughts on “Understanding ECN brokers

  1. i heard that ecn brokers are good and you can make better deals with them. i researched on ecn broker providers and i saw trade12. i was really eager to try trading with them to find out if what is adverstised about them is true. it is a bit more expensive to open an account with ecn broker but the experience is good. they did not trade against me and they gave me tighter prices. $10,000 was well spent instead of opening a small account where most money will go to commissions and spreads.

Leave a Reply