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Discovering The Top ECN Forex Brokers!

Top 4 ECN Brokers

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Top 5 ECN Brokers

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ECN brokers are very popular in the Forex world these days, mainly due to the increased conflict between Market Maker Forex brokers and traders that have led to losses to the tune of billions of dollars for investors located across the globe. ECN is a widely accepted Forex trading protocol, known as the Electronic Communications Network (ECN), which serves as a central electronic system for market participants to exchange orders through a centralized clearing platform. ECN trading involves connecting traders, brokers, banks, and other market entities to a global liquidity pool, where different financial instruments such as stocks and currencies change hands without the involvement of a central exchange.

History & Relevance Of ECN Forex Trading

The modern aspect of Forex trading from mainstream FX trading companies is generally geared towards the retail trading market, which involves offering Forex brokerage accounts to small traders that invest only a small amount of trading capital when compared to the industry bigwigs. Intuitional Forex trading involves direct market access trading, where all orders are performed at the interbank level. Therefore, to accommodate the needs of smaller retail traders, Forex companies started adopting the market maker trading protocol, which worked on matching traders’ orders through an internal dealing desk. Market Maker brokers became an instant hit among retail investors, primarily due to the small capital outflow and an insane amount of leverage that facilitates trading on margin. Market maker brokers were able to offer trading accounts for as low as $5 trading capital, which were supported by leverage as high as 1:3000. Together with the rise in popularity of online trading platforms during the early part of the 2000s, Market Maker protocols were considered to be at the pinnacle of online Forex trading. However, Market Maker brokers had their distinctive disadvantages, which includes the high cost of trading (spreads) and an increased conflict of interest between a broker and the trader. A market maker acts as the counterpart to a trader’s order, and it is up to a broker to decide whether they wish to pass on the opposite end of an order to other traders, or absorb them completely. Such a situation gave rise to market manipulation, where brokers purposefully created adverse trading conditions to ensure that the company profits from their clients’ losses. Increased spreads, lack of accuracy in price quotes, platform manipulation, and other unethical trading behavior contributed to a less-than-favorable trading environment, which led to the rise in popularity of ECN Forex brokers.

Understanding The Concept & Operating Structure Of ECN Forex Brokers

ecn Forex brokersECN Forex brokers operate on an entirely different protocol, which reduces the conflict of interest between a trader and a broker significantly. Active traders and professional investors always make it a priority to trade on ECN or Direct Market Access (DMA) protocols, in order to enjoy higher liquidity and better transparency in pricing. To understand the concept of ECN trading in detail, you will need to understand how Forex brokers operate in the markets. A Forex broker is a market intermediary that acts as a link between an investor and the market. The primary responsibility of a Forex broker is to facilitate a transaction at market price, where the underlying instrument can include Forex currency pairs, stocks, commodities, indices, metals, and ETFs. Brokers may adopt numerous trading protocols, platforms, and environments to ensure that they can offer market access to their clients using the best account packages. In reality, Forex trading, or investing in any other financial market in general, does require a high amount of trading capital. Forex trading was only included in the speculative investment category in recent times, as FX trading primarily involved exchanging currencies for meeting debt, purchasing goods, and paying for services through a global forum. However, once speculators and investors started understanding the benefits of betting on price movements, Forex trading quickly gathered momentum in the retail trading market. Such a rise in popularity led to the creation of market maker Forex brokers that allowed its clients to speculate on the volatility of the currency markets. Market maker brokers are also known as dealing desk brokers, where all orders are transmitted through a company’s dealing desk. Market maker brokers would act as a counterparty to a trader’s position, by absorbing the opposite end of their clients’ orders. Essentially, if a trader is long on the EUR/USD, the broker would sell the pair in the market to hedge its position against market volatility. At times, market makerFX brokers may also be able to pass its orders internally to other clients, by matching two traders who wished to buy and sell a currency pair with similar lot requirements. Although market maker brokers became a hugely popular and a common occurrence in the Forex market, traders began to realize that FX trading companies were not all that honest in their approach to their trading services. Fraudulent and dishonest brokers were using several means to trick their clients by offering incorrect price feeds, manipulating the platforms, and by trading against its clients to ensure that their traders lose their money in the markets. Therefore, dealing desk brokers earned a vast amount of negative reputation in the market, as coupled with the risks and volatility of the markets, Forex traders started losing a significant portion of their trading capital.

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The Introduction Of ECN Platforms On FX Trading

The ever-rising risks involved in trading with dealing desk brokers forced traders into exploring alternative options in the market that did not have any conflict of interest. Therefore, ECN Forex trading began to take root in the market, which basically provided a conflict-free trading environment that allowed traders to access the market liquidity through a global liquidity pool. An ECN trading network is comprised of global liquidity providers such as banks and interbank exchanges, where the price is freely floated according to the depth and liquidity of the markets. ECN Forex brokers make use of advanced trading protocols by connecting traders to ECN servers that are connected to a global liquidity pool, which gives access to live price feeds and market orders. An ECN network is an open network, which allows traders to get real-time information on the market liquidity, pending orders, open orders, and live market quotes that have the best spreads due to the increased presence of both retail and institutional traders. Orders are executed at market price, where positions are filled based on price settlement. The constant volatility of ECN networks, along with the presence of large market players ensures that traders can open a large position in the market without the worry of any requote. However, trades may be susceptible to instant price fluctuations, which can lead to slippages, and in other cases, partial order fills. Real-time liquidity does have its drawbacks, which can result in excessive slippages during low-volatile market conditions. Hence, traders must be aware of the different aspects of ECN trading before committing themselves to the risks of the market.

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The Main Points In Support Of FX Trading With ECN Forex Brokers

The Risks & Cons Of ECN Forex Brokers

How To Understand The Authenticity Of ECN Forex Brokers?

While ECN Forex brokers have been primarily known to offer high-quality trading services, there are a huge number of scam brokers in the industry that offer a regular market maker account on the pretext of an ECN account offering. In some cases, Forex brokers may also offer an STP (Straight Through Processing) protocol, which is nothing but a hybrid of the market maker and ECN account protocols. Therefore, as a trader, you should have a precise understanding of the different ECN features before choosing an ECN Forex broker. Here are some of the standout features of an ECN FX trading account:

Consider These Factors To Choose The Best ECN Forex Brokers

If you want to find the top ECN Forex brokers, we can offer you some advice and direction that will help you to refine your search and make a choice much easier. Look for the following factors in an ECN Forex brokers to ensure that you find a reliable and top ECN Forex broker:
– Strong Regulation
You might have found out your perfect ECN broker that offers an excellent trading account with the best features, but your broker is only as reliable as the safety of your funds through proper regulation. Ensure that the broker of your choice is regulated by a dependable authority, one who stands by the investors by protecting them from broker scams and fraudulent practices. Strong regulation will not only ensure a reliable trading environment, but it will also provide you with long-term security and safety of your trading capital.
– Good Reputation
The fact that so many STP brokers claim to be ECN Forex brokers makes it even more important for the best ECN Forex brokers to have a good reputation. A broker should have an excellent reputation with its past and present clients, while it should have mostly positive reviews in online customer forums. A well-established Forex broker with many years of experience in the market, along with a good amount of positive reviews from existing customers is an excellent choice. However, new Forex brokers may also be able to provide a good quality Forex account, as they may be able to cater to the modern requirements by garnering positive reputation from new age traders.
– Original & Innovative Trading Features
The more unique features an ECN Forex broker has in comparison to the rest of the ECN competition in the market, the better. Brokers may come up with innovative trading features and great resources such as trading tutorials, live news feeds, market analysis, and trading signals, all of which can contribute to an excellent user experience. Of course, ECN brokers may also offer advanced trading tools such as VPS, which will further enhance your trading environment.
– Reliable Trading Software
The top priority for any trader should be to determine the reliability and performance of a trading platform before investing their time and money into an ECN Forex Brokerage. ECN brokers usually provide tried and tested ECN platforms such as MT4 and the cTrader, while some brokers may offer branded or proprietary trading platform that connects traders to an ECN network. The MT4 terminal is designed primarily as a market maker platform, which requires ECN bridges to connect a trader to an ECN network. cTrader, on the other hand, is built from the ground up as a dedicated ECN platform. Therefore, browse through different platforms options and choose a trading software that is best suited to your trading style. You should also choose a platform that is worth your investments, as you should never choose an unreliable trading platform that can potentially erode your trading capital.
– Generous bonus system
Special offers and promotions are one of the best features that can be offered by top ECN Forex brokers; however, you should never forget that bonuses are not the only thing that you should look for in a Forex trading company. Sometimes, a broker will give the wrong initial impression to gain a trader’s trust – for example; a dishonest and fraudulent ECN forex broker may offer very generous bonuses to mask their inefficiency and financial malpractices. On the contrary, several genuine Forex brokers are pretty honest in their bonus policies and trading conditions, which clearly outline the numerous terms that are associated with a trading account.

Why You Should Invest Your Money With Top Rated ECN Forex Brokers

ECN Forex brokers have the best trading conditions that clearly provide an edge to the traders without any risk of broker or dealer intervention. ECN accounts have no conflict of interest, are cheaper due to the spreads, and have high liquidity for all categories of traders. ECN Forex brokers also offer several ECN account features that allow traders to take complete advantage of the markets. Therefore, if you are looking for safe and secure Forex trading, and if you are concerned about protecting your funds from broker scams, you should definitely try your hand at Forex trading with the best ECN Forex brokers.

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