Discovering the Top ECN Forex Brokers Together!
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ECN brokers are very popular in the Forex world these days, but even if you have heard of them, you may not know what they are. Here, we will help you to learn all about them in this article. ECN Forex brokers are well known in the financial industry today, although they are not the preferred broker among standard traders, whether they are beginners in the field or advanced investors. Still, if you like more unusual and original approaches and environments for trading, you might find some of the best ECN Forex brokers quite interesting, and since we want to help to make your trading experience as simple as possible, we will try to assist you in discovering the top ECN Forex brokers.
Understanding What Forex Brokers Are
What can an ECN Forex broker offer and what can they provide us as active traders? Without knowing the general and standard features of a broker, you might not be able to distinguish between the different types, so we should start with the basics – an explanation of the term “Forex broker”. This is the same thing as a financial trading broker or a trading platform, or some people may even call it a system – basically it refers to a website with its own individual URL address. In general, a Forex broker is not exactly a person as most beginners think, in fact a Forex broker is primarily an environment in which trades are placed, and that is why it is usually called a system or a platform. Every Forex broker is also a company, and the website where you trade is registered to and owned by a financial company, the broker. Last, but not least, a Forex broker is supposed to be a company that is regulated by the official agencies and regulation is a very important part of choosing a broker. Regulation refers to measures that are taken against different types of fraud, personal data abuse, money laundering, stealing money and prevention of financial transactions from being executed immediately etc. Regulation measures come from the official regulator, which is always based in the country where the Forex broker is located, and follows the official licensing procedure. To operate on the market, any broker, regardless of whether it is an ECN Forex broker or any other type, should be strictly controlled because it deals with money, trading and currencies. All of these factors also apply to ECN Forex brokers as they are a type of broker in themselves.
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What Types of Brokers Do We Know and How Can They Be Distinguished From ECN Forex Brokers?
There are several types of Forex brokers available today and ECN Forex brokers are one of the best known among them. Still, we should look at the other trading platform types, so when you get to know the ECN system, you will never confuse it with any other type. This is a simple list of the top Forex broker types found on the web (excluding ECN Forex brokers, which we will look at in detail below).
– DD or Dealing Desk
This type of Forex broker is called a market maker, which makes it easier to understand its nature. Commonly, DD or market maker brokers provide primarily precisely fixed spreads. This broker also offers the possibility of choosing to make them either below or above the market value at any specific time. The main characteristic of the dealing desk system is that it takes the counterpart of the trader, meaning that the trader himself avoids trading with the liquidity providers on the dealing desk, which makes its profits thanks to the spreads that are made on the opposite side of the trader’s trade.
– STP or Straight Through Processing
A Straight Through Processing Forex broker type is a specific type of platform where any financial transaction is performed rapidly as it is processed through a computer system. This means that this broker has no human intervention like with a market maker, and there are no connections with any interbank institutions.
– NDD or No Dealing Desk
As you may guess, this is an opposite broker to a market maker. A no dealing desk has something in common with both the previously mentioned STP and the ECN Forex broker in that a no dealing desk offers a full and primarily direct access to the interbank market. Here, traders will not encounter any price quoting actions, and they will not be restricted. The downside to the NDD is that it has quite low spreads, although not fixed, and the broker can always switch from spreads to a change in the commission.
– MTT or Multilateral Trading Facilities
MTT brokers are not regulated, and usually the sellers and buyers are like a big community, where trust is the main regulator. The rules are very different according to the specific Multilateral Trading Facilities broker. What makes this system so successful though, is that it always guarantees value and efficiency, as well as rapid financial transactions.
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And Finally – How To Understand ECN Forex Brokers?
ECN is an abbreviation which stands for Electronic Communication Network. The word network here though does not refer to a system like in the trading systems above, but is instead linked to social webs. The social element is key when using ECN brokers. The thing that makes this broker so different is that traders here simply bid on each other’s trades. This makes the whole trading experience incredibly social, and it is very common for the best ECN Forex brokers to have low spreads. Meanwhile, unlike most traditional brokers, ECN trading systems allow scalping at full value. Unfortunately, many people are scammed by STP brokers with a more social outlook, believing that they are really using an ECN broker and in these cases, traders can suffer. Therefore, finding the best ECN Forex brokers is very important.
Which Are 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 to make your search and your choice much easier. If you look for the following factors and features in ECN Forex brokers and find one that has all of them, you will have found one of the top ECN forex brokers.
– Strong regulation
We have already discussed this part of a broker’s nature, but it is essential for us to remind you that choosing a broker that has no regulation will put you at risk of being scammed.
– 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. Having at least two years of experience is adequate for their system to be recognised.
– Original trading featured
The more unique features an ECN Forex broker has in comparison to the rest of the ECN sites on the market, the better. Of course, standard features like a learning centre, a live channel with the latest financial news and tutorials about how to gain better profits are commonplace today and will not set a broker apart from the crowd.
– Generous bonus system
Special offers and promotions are one of the best features of the top ECN Forex brokers, however you should never forget that bonuses are not the only thing that you should look for in a trading system. Sometimes, a broker will give the wrong initial impression to gain a trader’s trust – for example a poor ECN forex broker may offer very generous bonuses to mask the fact that they are nothing special and have no features with which to tempt new customers.
– Reliable trading software
Time is money, so fast trading is essential. If you want to end the day in profit, there must be no bugs or problems in the broker’s trading software.
ECN Forex brokers are interesting and different and by giving them a try, you will open yourself to new experiences in the financial industry which is very valuable for beginners in the field.
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