Global Forex market is vast enough to offer numerous of intriguing, interesting and mostly – profitable – ways to earn some extra money. Besides the different websites, where online trading is officially authorized and allowed – for example, eToro, Markets.com and etc – there are also different types of brokers. Just like different Forex trading bonuses, the different trading broker types provide a great amount of different extras, specifications and options a trader should take under consideration or take benefits of. What is certain for sure, though, is that today, when the Forex industry has expanded and advanced so much and so speedily, there is one type of broker that is claimed to be the most preferred one – the ECN broker. Indeed, all kinds of traders regardless their experience or strategy – beginners, strict Forex strategy managers, high punters and etc – accept the ecn brokers as the most beneficial ones, easy to be used and quite advantageous. So if you have not tested them yet, discover the large Forex trading experience with ECN brokers!
What Are the Different Types of Forex Brokers?
Before focusing on the ecn brokers particularly, it could be good to discuss them together with the rest of the available today Forex broker types. Thus, you will easily make a comparison between them and eventually your choice whether to enter an ecn broker will be wisely made. So, let`s continue with the list of all the different types of Forex brokers from these days. Note that all of them currently exist and you can find them just like you can simply find and enter an ECN broker:
- Dealing Desk – You will meet it with the abbreviation DD, but both mean the same. In general, the dealing desk Forex broker is a market maker. Here is where we might add that the last one year put on pedestal the big strive between the dealing desk and the ECN brokers. Both are metaphorically in a war, because usually a trader either prefers the first one, or the other one. The Dealing Desk websites provide 100% fixed spreads. What is interesting about the DD broker is that it can elect to quite above or below the real market price. Note – such brokers can do that at any time! The market maker is getting paid through the spreads mainly.
- No Dealing Desk – The NDD abbreviation points the broker, which offers a direct access to the interbank market. This means that the no dealing desk broker can be either a totally STP broker or a hybrid broker – STP + ECN broker. Here, there`s no requiting of the price, so you are allowed to trade during the different economy changes, collapses or official important announcements with no restrictions. Be aware that spreads here are usually low – unlike the ECN broker types.
- STP – Mentioning the hybrid between the STP and ENC broker, we need to make it clear what the STP means. The Straight Through Processing type of a broker is actually a type of mode, where transactions are entirely computerized and instantly processed on the interbank maker, so the broker actually do not apply any intervention.
- Multilateral Trading Facilities – Such Forex Brokers ensure that both – sellers and buyers – can come together according to the non-discretionary rules. Such a broker, though, is not regulated, while in most cases – including the ecn brokers – are on mandatory regulated and officially authorized.
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What Exactly is The ECN Broker?
The ECN broker is actually the famous and well-known Electronic Communication Network, which, in general provides and displays real-time order book information that includes all the processed orders, as well as the prices that are offered by the banks on the interbank markets. Such a broker is popular for the fact that improves the transparency trend in Forex trading at all. Keep in mind that the profits for the ECN broker, itself, though, comes from low commissions, which the traders are charged with. However, the good thing here is that the ECN brokers process the transactions instantly and directly on the interbank in No Dealing Desk mode. On the other side, for the retail traders, the ECN broker is actually a broker that provides an environment, where all the placed orders have their opposite orders either within the company`s broker, or within the ECN broker`s counteractor. Be aware that the team game is very important for this broker, because here the traders cooperate with each other. Also, the ECN brokers are mostly protected against any kind of risks. A broker can become an ECN broker only in case it has high liquidity, which provides a chance for the execution of all the orders within the broker`s company. The main difference between the ECN broker and the market maker (Dealing desk broker) is that the first one does not trade against its own customers. This makes an ECN broke more than just reliable and trustworthy.
What are the Pros of an ECN Broker?
Speaking of the benefits behind the ECN brokers, check out all of them. We have listed only the obvious pros. However, many traders find them even more beneficial that experts claim them to be:
- Getting the better bid/ask prices since the ECN brokers are always determined by numerous sources.
- Possibility to trade with a little or zero spread.
- Beneficial for scalping the purposes since the prices are volatile.
So, what do you think – are the ecn brokers for you?
Other forex brokers countries and topics:
Swiss forex brokers
UK forex brokers
Australian Forex Brokers
Forex Brokers Canada
Forex Brokers in South Africa