What is an ECN Broker?
Forex brokers are instrumental to traders. They provide platforms where traders can trade different financial instruments in the forex market.
There are different types of brokers. Some examples are: Dealing desk and no dealing desk brokers, Straight through processing, and Electronic communication network. This article aims to discuss the ECN broker.
Electronic Communication Network (ECN Broker)
ECN brokers facilitate the transactions of its traders by matching their orders to other market participants. Some of the participants are liquidity providers, hedge funds, other brokers, and banks.
The ECN broker provides traders access to other participants. Moreover, the broker provides information about the orders being entered and prices of financial instruments in the market.
One of the best ECN brokers is IC Markets.
Advantages of ECN brokers
• There is price transparency as the brokers get their price feeds from the market. This prevents price manipulation.
• Fast execution speeds.
Disadvantages of ECN brokers
• Using ECN can be costly due to variable spreads and commissions.