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An ECN broker is someone who has your best interest at heart, albeit, not for any altruistic reasons.

To put it plainly, an ECN broker makes money if you do well on the market. At least you know that theyll always look out for you.

But instead of being cryptic, lets try to inform you about what is ECN and who exactly are ECN brokers and what do they do.

ECN is short for Electronic Communications Network.

It provides a system for market participants to come together to execute trades.

The network is made so that it matches the buy and sell orders that are on the market at that time. If its not able to do that because some information is not available, it gives the prices that are a reflection of the highest bid and lowest ask that are on the open market.

So, what does an ECN broker do? Simple really, they use the aforementioned network to give their clients direct access to other participants in the market. The broker consolidates quotes from market participants to be able to give his or her client a tighter bid/ask spreads. Now, why have I previously said that the ECN broker has your best interest at heart? Well, they charge a commission for each spread, and nobody would employ them if they cant make a tight spread for their clients, so they make the best spread that they can, in hopes that their client does the best that they can, simple as that. If youd like an example of one, weve recently checked outPepperstone, which you can read more abouthere.

Since its done via live streaming, the trading is done in an instant. There isnt any dealing desk or re-quotes to get in the way, because once the trade is dealt, its final and confirmed.

Being completely anonymous is also a big plus to some.

The trading that takes place is done on neutral prices, which are a reflection of conditions on the real market.

Since the ECN brokers cant control bid/s like a dealer, they always have variable spreads.

If a trader is so inclined, they can input their risk management system and/or trading model to the brokers data feed, hence giving access to the best bid and price, along with a swarm of other data valuable to them.

As with anything else, if it has an upside, it has to have a downside as well.

Luckily, theres isnt much to sacrifice if you opt to go with an ECN broker. In fact, theres only a couple of things to mention, so lets get cracking!

Like any other job that you do in life, you have to make money somehow. ECN brokers do this with fixed commissions fees for every transaction. Now, at first you might think that theyre expensive, but there are other things to consider. Opting to go with an ECN broker is probably going to be cheaper and almost definitely more transparent than if you were to chose using a market maker.

Market makers go about getting paid in a different way; they do this by making larger bid-ask spreads and unfair prices.

If youre sure that you want to pursue trading and want reliable conditions when doing so, then an ECN broker is definitely an option to keep open. Because, like I said multiple times now, they will always look out for your best interests.

On the other hand, not every ECN broker is a reliable one so you would need to be vigilant when picking one. For example, weve made a review not too long ago about one, which you can check outhere!

There are a few things that you can ask someone to determine if theyre actually an honest ECN broker or not.

For instance, you can ask Is there negative slippage? and if they answer yes, your best bet would be to continue the search.

Another thing to ask is, Are the spreads fixed or variable? . A genuine ECN brokers offer will only consist of floating or variable spreads.

As with most things in life, there are positive and negative sides; the same holds true with this subject.

If you are dead set on going with an ECN broker, likeExnessfor example, and investing your hard earned money, you better be prepared for anything, and investigate all details before committing further!

The best piece of advice that I can give you is not to be influenced by anything or anyone when making this decision, and think long and hard before you make any steps.

Now, go out there, and do whats right for you!

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Self-taught content writer. Currently writing about forex, trading, cryptocurrencies and looking to expand to different topics. Trying to provide readers with the best content out there, some of which can be seen on websites like Eagles Investors and Finsof. All of the articles that I have written have been in-depth and heavily researched, to give the most objective, and fact-oriented article.

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* Disclaimer: Highway Media Group will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Currency trading on margin involves high risk, and is not suitable for all investors. Trading or investing in cryptocurrencies carries with it potential risks.

Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Cryptocurrencies are not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument or cryptocurrencies you should carefully consider your investment objectives, level of experience, and risk appetite.

Highway Media Group would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures), Forex and cryptocurrencies prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.

CFDsare complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when tradingCFDs. You should consider whether you can afford to take the high risk of losing your money.

Therefore, Highway Media Group doesnt bear any responsibility for any trading losses you might incur as a result of using this data. Highway Media Group may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

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Forex Margin Calculator: Explained for Beginner Forex Traders.

Trendline Groups A First Lesson towards Trading Success

Moving averages Second Volume towards Trading Success

MACD Useful tool to qualify Moving Averages

Where to invest in gold and other aspects for gold investors

Oil Prices Today Full Walkthrough on Billion Dollars Empires

Social trading What is it and How does it work?

How Cryptocurrency Works? (Fundamentals for Beginners)

Bitcoin VS Fiat Currencies and Bitcoin VS Blockchain

What is Litecoin and What is Special About it?

Bitcoin Cash The Best Guide to Understand It

Day Trading Strategies for Beginners-2019 tips

CFDs, First steps and 5 Tips to perform your best

Stock Market, and The 6 Commandments for Successful Traders

Stocks, Shares and Co, lets diversify, be a real Trader

Invest in Diamonds, propitious time and basic rules

Real estate abroad, overview where to invest and how?

Real Estate Investment in Portugal, a great opportunity

Spread Betting, a different way for Online Trading

What is a penny stock overview of investment on tiny things

Saving Bonds, safe investments and great income

Making money online, 18 ideas for profitable business