ECN Forex brokers do not set the bid/ask prices and only present the currently available prices that they have procured from the liquidity providers. In other words, they just provide the means, or access to the network, for the traders who can then browse through the prices offered by multiple participants of the FX Market including the major banks, brokers, and other traders.
ECN Forex Brokers charge a small commission for their clients’ transactions on the ECN Network because their offered spreads are either very low or none at all, zero.
ECN account holders are able to view their broker’s system in real-time with no delays. This is especially useful in times of major news release to execute your trading positions almost instantaneously. Scalpers are very attracted to ECN accounts due to the low floating spread as well as ultra-fast trade execution features that come with them.
ECN Forex accounts are getting more and more preferable by experienced traders due to the wider range of their offered advantages.
Here are some benefits you can acquire by opening an ECN Forex account:
The first and foremost benefit of opening an ECN Forex account is its privacy, in this way no one will get wind of your trading activities and you’ll remain completely anonymous. This also means that nobody has an advantage over another and everybody gets the same set of trading conditions and prices. Your ECN broker can only provide access to the network and smooth the process, but they won’t be able to interfere in your private trading activities.
2. Real-time Trades
ECN account traders will encounter no delays in between trades and have real-time access to the ongoing transactions of the market. This is because they are directly connected to the market, and their transactions are confirmed immediately without encountering interference in each trade. This saves time and gives them peace of mind.
3. Direct Access to Forex market
When you open an ECN Forex account, you get direct access to a global liquidity pool of competitive, and regulated financial institutions. All brokers who have partnered with the ECN system access the same feed and trades without any exceptions. Therefore, what you receive is the most transparent market prices that different liquidity providers offer.
4. No Conflict of Interest
ECN brokers don’t trade against their clients, so there is literally no reason for them to hide the available prices from their clients. In fact, they make sure that their clients enjoy the most suitable prices in the market. Think about it! The happier the customers are, the more business would go to the brokers. Moreover, in such a system everybody is treated the same, and nobody receives any special treatment.
5. No Re-quotes and No Dealing Desk (NDD)
ECN Brokers will not tamper with your prices; they’re not allowed to, so you will surely get the same price with which you’ve entered the market. And since it’s a no dealing desk, you’ll have direct access to the interbank market.
6. Narrow and Lower Spreads
ECN brokers have no control over the available prices of the forex market; therefore, they cannot manipulate the spreads or change the prices. This advantage gives you an edge to review the fluctuations of the market prices in real time and pick the ones that you prefer.
7. Fast Order Execution
Nothing stands in your way to access the liquidity providers, your orders are filled automatically with no delays, and they will go through as smoothly as possible.