subject: The New Wave of ECN Forex [print this page] I am always amused when I read the forum for negotiations and the resounding theme is that brokers are crooks. It may be true that some companies are chop shops that provide most of the major companies likely to honest service. The enthusiasm for retail sale shares moving on the Forex, the lure of the Commission is of free trade. Certainly there is a gap, it is an advantage of Nice. However, a little more than a year after the first wave received by traders to have used the change of some companies started with a gateway to trading ECN.
The implementation follows revision dealer markups frustration wide. The truth is that the whole society is more widespread than it eats into profits business. A generalization to the EUR / USD is 2 pips with a reputable dealer. The appearance of TCE is that the differences can not be fixed, and dealers for the supply and demand, as in the stock market. The CCC can effectively with a margin so narrow half pip trade. Sounds good, any trader who now have their margins small and their profits increase. However, there are two major problems with the train ECN. First, ECN broker not to make money on the spread, and is now a commission to be charged. The Commission is reasonable and is accepted as a rule, a 1-2 pips per trade. Take the example of the best case, the Commission pip of a price first ECN spreads are not guaranteed. Many people complain of fixed spreads to two or three seeds, but sometimes it is a blessing. An ECN is an exchange of something less than a half pip, but can move at any level. In a fast market could spread more than 5 pips are. If you already have a Commission and a pip spread is 2 pips. Now you're paying more than your original broker with a fixed spread of 2 pips. There are advantages, the ECN. More importantly, provide with the opening of the market and more liquidity, it can give you a better idea of the true market price. This may well be worth von1 Commission seeds.
Finally, it is important to know the difference between a broker with fixed spreads and a broker with an ECN billing committees. I think they are suited to different types of operators. It is important to review your trading strategy and select a broker with the plan that best suits your trading style.
