ECN Trading

The purpose of the site ECN execution is to create a space where traders can easily find information to understand what Electronic Communication Network (ECN) Trading is about and providing them the information about the best brokers for ECN Trading.

The Forex trading industry is so large and lucrative, yet traders still do not know the benefits of trading on an Electronic Communication Network with a broker .
We will uncover what ECN Trading is, how is works, the fees involved trading in this type of account and how you and the broker makes money from trading on an Electronic Communication Network.

What is ECN Trading?

An (ECN) electronic communication network is an international financial network system that pairs buy and sell orders or trades on the market.
An ECN trade facilitates traders anywhere on the globe to make a secure transaction (trades) without a third party. Primarily forex , stocks, and other CFDs are traded on an ECN.

ECN trading is a type of trading that takes place on an electronic communications network. This type of trading has become increasingly popular in recent years, as it offers a number of advantages over traditional methods of trading.

What is an ECN Execution?

An ECN Execution is when a computerized system automatically matches orders to buy and sell securities.

Electronic Communication Network

An (ECN) electronic communication network is a digital network system that matches buyers and sellers looking to trade financial assets in the markets.
The 1st Electronic Communication Network was created in 1969 to lower transaction costs across brokers and provide clients full access to their order books whilst providing order matching outside traditional exchange hours.
This is also referred to as alternative trading networks or systems.

This type of trading has become increasingly popular in recent years, as it offers a number of advantages over traditional methods of trading. ECN trading is conducted through a network of banks and other financial institutions that trade with each other. This type of trading allows for a much more efficient market, as there is no need for a middleman to match buyers and sellers. This also allows for a more transparent market, as all participants are able to see the prices at which trades are taking place.

ECN trading is a great way to get involved in the financial markets without having to go through a traditional broker. This type of trading can be done online, and it offers a number of benefits that make it a great choice for many investors. If you’re looking for a more efficient and transparent way to trade, ECN trading may be right for you.


Keynote:

An Electronic Communication Network (ECN) is a financial network system that facilitates the trading of financial assets without a third party. Provided you have an account with a broker that provides direct access trading.

Recommended ECN Brokers

Choosing the correct broker for trading is critical to your trading journey, there are many factors you should take into consideration specifically for ECN trading before settling with the broker you may be trading with or when switching to a new choice broker which is best suited to your needs and factors which are important to you personally.

Broker

Regulators

Leverage

Spreads

Trading Acc.

Instruments

Connect

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC,FCA, DFSA, FSC

Up to 1:500

From 0 - 0.4 pips

Broker Type:
STP | ECN
 3 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

CySEC, FSC BVI, FSC

Up to 1:1000

From 0 - 7 pips

Broker Type:
MM | Binary
 6 Accounts

Forex, Indices,
Commodities,
Metals, Energies, Shares, Crypto

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, Crypto

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IFSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
ETFs, Shares, Crypto

ASIC, CySEC

Up to 1:500*

From 0.0 pips

Broker Type:
STP | ECN | DMA 2 Accounts

Forex, Indices,
Commodities, 
Metals, Energies,
Shares, ETFs Crypto, Bonds

What makes an ECN Broker?

ECN brokers have accounts that trade as non-dealing desk brokers, they do not share their clients’ orders with market makers. They instead use an automated matching system to pair buyers and sellers and send orders to liquidity providers. Learn how to choose an ECN Broker.
An ECN broker is a middleman who helps investors make transactions on the ECN. Most of the best ECN brokers provide traders with VPS (Virtual Private Server) hosting, which makes for a better trading experience, be sure to learn more about VPS Trading.

Who is the Best ECN Broker?

There are a lot of factors to consider in what makes the Best ECN broker
One crucial factor is identifying if a broker is a true ECN broker.
Follow the steps on how to choose an ECN Broker.
ECN brokers offer faster execution of orders and usually at more favorable prices.
An ECN broker facilitates trading for clients over the electronic communication network.
ECN broker also saves money and frees up trading time due to the nature of the ECN setup.
The volume of orders is not routed to market makers by ECN brokers.
Brokers electronically match traders and send orders to middlemen in the securities markets.
ECN broker matches transactions between market participants
It is forbidden for the broker to engage in any activity that might cause financial loss to the customer or clients.
As a result of the substantially narrower spreads offered by ECNs, ECN brokers often charge a flat fee for each trade made by their clients.
Traders get different execution quotes and are shown the best bid and ask prices on the market at that time.

How does ECN Trading work?

An ECN broker facilitates traders to enter the currency markets through the Electronic Communication Network and matching trades with other traders and passing the orders through to liquidity providers.

Liquidity providers like global banks
Orders to buy or sell are put into an ECN server by liquidity providers like global banks. Then, they give those quotes to their clients so they can trade with them.

ECN Traders get different execution quotes and are shown the best bid and ask prices on the market at that time.

An Example of an ECN Trade

An electronic communication network (ECN) is a digital system that brings together buyers and sellers who want to trade securities on the financial markets.

ECNs let brokerages and investors from different parts of the world trade without a third party. This gives investors privacy.

More on ECN Brokerages

ECNs allow trading to happen outside of normal trading hours, so investors can react to or plan for news that happens after trading hours.

One bad thing about using ECNs is that they have access fees and commission fees that can make the total cost of use go up.

Without ECNs, matching buyers and sellers would take a lot longer, making it harder to get into or out of positions and increasing the costs and risks of trading.

How does ECN Trading work

src: blog.roboforex.com

ECN Trading accounts vs Other Trading types

What is an ECN Account?
An ECN account allows traders to trade on the electronic communication network and pair orders with buyers and sells on the international market.

ECN Trading vs Straight Through Processing (STP)

ECN Trading is more transparent
ECN Trading orders are sent exclusively to the interbank market, while orders placed with an STP broker may be sent to any of the broker’s liquidity providers, including banks and interbank exchanges.

Commissions on transactions are standard with ECN brokers but optional with STP brokers.
Unlike STP brokers, who can offer set spreads whilst ECN brokers’ spreads are always floating.
More on ECN Accounts vs Standard Accounts

ECN Trading vs Market Makers (MM)

Market makers set both the bid and the ask prices on their systems hence “maker” the price, whereas with ECN the trade goes to the interbank market as liquidity providers
Market makers provide some liquidity to the market.
Market makers’ exchange rates are set in their own best interests.
There are 2 types of Market makers retail & institutional.
Market makers are essentially bidding against you (the trader)
Market makers can manipulate the prices
Market makers can freeze, and slippage can occur.

The Advantages of ECN Trading

There are a number of advantages to ECN trading. One of the main advantages is that it offers a much more efficient market. This is because there is no need for a middleman to match buyers and sellers.
This also allows for a more transparent market, as all participants are able to see the prices at which trades are taking place. Another advantage of ECN trading is that it offers a higher level of liquidity. This means that there are always buyers and sellers available to trade.
This is due to a large number of participants in the market. ECN trading also offers lower transaction costs.
This is because there are no commissions or fees charged by the middleman. ECN trading also offers a higher degree of anonymity. This is because participants do not need to disclose their identity to trade.

ECN trading is also advantageous because it allows traders to access a wider range of markets. This is due to the fact that ECN Trading Platforms are connected to a number of different exchanges. This provides traders with more opportunities to trade.
ECN trading is also beneficial because it allows traders to trade on a more global scale.
This is because ECN trading platforms are not limited by geographical boundaries.
ECN trading is also advantageous because it offers a higher degree of price discovery.
This is due to the fact that prices are set by the market participants.
ECN trading is also beneficial because it offers a higher degree of price competition. This is due to the fact that there are a large number of participants in the market.

The Disadvantages of ECN Trading

There are also a number of disadvantages to ECN trading. One of the main disadvantages is that it can be quite complex.
This is because it involves a large number of financial institutions. This can make it difficult to understand the market.
Another disadvantage of ECN trading is that it can be quite volatile. This is because prices can move very quickly.
This can be a problem for traders who are not experienced in trading. ECN trading also has a number of risks.
This is because it is a relatively new type of trading. There is also the risk that prices may be manipulated by the participants in the market.

Another potential disadvantage of ECN trading is that it may be less transparent than other types of trading.
This is because it can be difficult to see the prices that the different participants in the market are quoting.
This can make it difficult to make informed trading decisions. ECN trading may also be subject to higher fees than other types of trading.
This is because it can be more expensive to set up and maintain an ECN trading system.

ECN Fees by ECN Execution

ECN Fees

What are ECN Fees?
ECN fees are on applied a per-share basis on orders. They are always fractions of a cent, but they can be a little different depending on the brokerage and the exchange.
ECN fees are only charged when a buy or sell order takes liquidity away from the market.

What is an ECN rebate?
ECNs offer traders rebates as an incentive to encourage traders to create a market for the assets they’re trading.

Is ECN Trading Right for You?

ECN trading may not be suitable for everyone. It can be quite complex and volatile.
It is also important to note that there are a number of risks involved.
However, ECN trading does offer a number of advantages.
These include a more efficient market, lower transaction costs, and a higher degree of anonymity.
If you are considering ECN trading, you should speak to a financial advisor to see if it is right for you.

Some people may shy away from ECN trading because of the risks involved. However, it is important to remember that all investments come with some degree of risk. The key is to understand the risks involved and make an informed decision about whether or not ECN trading is right for you.

Now You Can Open an ECN Account with a Regulated Broker

Each broker has its own ECN Fees, which can be a Fixed commission & floating spreads.

Choosing the correct broker for trading is critical to your trading journey, there are many factors you should take into consideration specifically for ECN trading before settling with the broker you may be trading with or when switching to a new choice broker which is best suited to your needs and factors which are important to you personally.
These are the brokers we have reviewed:

ECN Execution Recommended Brokers

Exness

Since 2008

Offices:

UK, Cyprus, Seychelles

Exness

Minimum Deposit: Standard; Cent; Plus: $1 | Raw Spread, Zero, Pro:$200
Account currency: USD
Leverage: From 1:100 up to 1:2000
Accounts: Standard, Standard Cent, Standard Plus, Raw Spread, Zero, Pro
Instruments Offered: Forex, Indices, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, WebTrader, Mobile, Free VPS hosting
Regulation: FCA, CySEC, FSA, CBCS, FSC,  FSCA
Spreads: Standard; Cent: from 0.3 pips,
Standard Plus: from 1 pip
Pro: from 0.1 pips,
Raw spread; Zero: from 0 pips,
Visit Broker Broker Review

InstaForex

Since: 2007

Offices:

Cyprus, St.Vincent & the Grenadines, British Virgin Isles

InstaForex

Minimum Deposit: From $1
Account currency: EUR, USD
Leverage: From 1:1 up to 1:1000
Accounts: Demo, Insta.Standard, Insta.Eurica, Cent.Standard, Cent.Eurica, PAMM
Instruments Offered:
Forex, Indices, Futures, Options, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: МТ4, МТ5, InstaTrader, WebTrader, Multiterminal, Mobile Trading, VPS hosting
Regulation: CySEC, FSC BVI, FSC
Spreads: 0 pips: Insta.Eurica and Cent.Eurica;
3–7 pips: Insta.Standard and Cent.Standard
Visit Broker Broker Review

AXI

Since: 2007

Offices:

UK, Australia, UAE, Saint Vincent & the Grenadines

AXI

Minimum Deposit: $1
Account currency: AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, SGD, USD
Leverage: Up to 1:500
Accounts: Standard, Pro, Elite
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform:  MT4, PsyQuation with Axi,  WebTrader, VPS hosting
Regulation: ASIC,FCA, DFSA, FSC
Spreads Standard: from 0.4 pip, Pro: from 0 pip
Visit Broker Broker Review

FBS

Since: 2009

Offices:

Cyprus, Belize

Minimum Deposit: $1 , €10
Account currency: Euro
Leverage: 1:3000 
Accounts: Standard Account, Cent Account, Demo Standard Account, Demo Cent
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, Multiterminal, WebTrader, FBS Trader, VPS hosting
Regulation: CySEC, FSC, FSCA, ASIC
Spreads: From 1 pip
Visit Broker Broker Review

IC Markets

Since: 2007

Offices:

Australia, Cyprus, Seychelles

IC MARKETS

Minimum Deposit: 200 US dollars
Account currency: USD, AUD, GBP, CHF, JPY, NZD, SGD, CAD, HKD, BTC
Leverage: From 1:1 to 1:500
Accounts: Demo, Raw Spread, cTrader, Standard, Islamic, PAMM
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, Bonds Cryptocurrencies
Trading Platform: cTrader, MT4, MT5, WebTrader, VPS hosting
Regulation: AFSL, ASIC, CySEC, FSA
Spreads From 0
Visit Broker Broker Review

EightCap

Since: 2009

Offices:

Australia, Vanuatu

EIGHTCAP

Minimum Deposit: $100
Account currency: AUD, USD, GBP, NZD, SGD, EUR
Leverage: 1:30 for Australian clients
1:500 for Non-AU clients
Accounts: Standard Account, Raw Account
Instruments Offered:
Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4, MT5, Mobile, VPS hosting
Regulation: ASIC, VFSC
Spreads: From 0.0 pips
Visit Broker Broker Review