Category: ECN FOREX BROKERS
ECN stands for Electronic Currency Network. It directs the client straight through the interbank market, usually resulting in tighter spreads because of the direct relation between the client and interbank. Basically it creates an electronic bridge between liquidity providers such as banks and retail forex traders. Forex brokers who use Electronic Currency Network to provide their clients direct access to the currency market.
ECN broker only matches trades between market participants, it cannot trade against the client, an allegation often directed against some unscrupulous retail forex brokers. Because ECN spreads are much narrower than those used by everyday brokers, electronic communication networks brokers charge clients a fixed commission per transaction. In ECN forex trading, they require more deposit to be made as compared to retail forex brokers and you cannot trade on mini and micro lots.
On the other hand retail forex company acts as the market maker for all your trades. They shade prices, widen spreads arbitrarily, and trade against you. Their basically modern day bucket shops. The advantages retail brokers provide are that you can open an account with very little money, they give you crazy leverage, and usually you can demo trade on their platforms until you learn what you’re doing. Most of them also have micro and mini lots so you can trade very small sizes.
Some of the ECN forex brokers are MB Trading, FXCM, FXDD, forex.com, interbank FX, FXPro.com etc.