Which Ecn Forex Broker Is The Best In Australia

ECN is an acronym for Electronic Communications Network

. A Forex ECN broker does not have a dealing desk but in its place provides a marketplace where multiple market makers, financial institutions and traders are able to enter in competing bids and offers and have their orders filled by multiple liquidity providers in an anonymous trading environment. The orders are excecuted the name of the ECN broker, providing you with complete anonymity. A trader may have their buy order filled by liquidity provider "A", and close the exact same trade against liquidity provider "B", or have their trade matched internally from the bid or offer of another trader. The very best bid and offer is displayed to the trader together with the market depth which is the collective quantity obtainable at each price level. A large quantity of market participants offering pricing to the ECN broker results in tighter spreads. Forex ECN brokers usually charge a commission for matching trades between their customers and the liquidity providers.

Using an ECN broker to trade forex presents a number of significant advantages, one of the most obvious being tight spreads and deep liquidity. Narrow spreads means that day traders and scalpers can make the most of minor price movements on an intraday time frame. Deep liquidity ensures that large volumes can be traded without having any effect on price this is particularly important in unstable market conditions and provides considerable advantages for traders utilising automatic forex trading systems. These two components combined mean that it is possible for you to to take advantage of more trading opportunities, more opportunity equals more profit potential.

There's a number of ECN providers available in the market nowadays with by far the most widespread ECN used being Currenex. Currenex is normally utilized by institutions and investment banks and out of reach for many retail traders, however in recent times as the demand for tight spreads and transparency has improved significantly various commonly known retail forex platforms such as Metatrader have been tailored to suit ECN brokers. Now a lot more than ever the gap between retail investors and investment banks is lessening.

It goes without saying utilising an ECN company will not be of any advantage if you dont employ a trading plan. Building a forex trading plan that takes into consideration your risk profile, lifestyle and capital outlay is essential before you start trading. After formulating your trading plan it is advisable to then try a number of forex platform demos to work out which trading platform most accurately fits your trading plan. Of course its imperative that you choose a forex platform offered by an ECN broker. It can often be hard to establish whether a forex provider is in fact an ECN provider, however as a guideline ECN providers will charge a fee on your transaction rather quoting you a widened spread.

by: kentw9nora

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