Start Trading

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 Execution

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

What is ECN execution?

An electronic communication network (ECN) is a type of automated system that distributes the orders that are placed on a market by participants directly to third parties as well as individual traders. Orders are automatically executed by matching buy and sell orders at the most favourable price. ECN Trading is conducted through a very effective procedure that makes use of advanced trading technology.

What is Low Spread Forex Broker?

A Low Spread Forex Broker offers its clients extremely tight dealing spreads on currency pairs. Some of the dealing spreads displayed by low-spread brokers can be a fraction of a pip, and no-spread quotations where the bid and offer exchange rates are identical can occasionally be observed.

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.

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 Trading Brokers

Choosing the correct ECN Trading 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.

Get the list of the best Low Spread Forex ECN Trading Brokers to trade Forex, Stocks, Indices, and Commodities – Instant ECN Execution With ECN Brokers

Broker

Regulators

Max. Leverage

Spreads

Trading Acc.

Instruments

Connect

FP Markets 

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

Eightcap

ASIC, VFSC

 Up to 1:500 

From 0.0 pips

Broker Type:
STP | ECN
 2 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

IC Markets

AFSL, ASIC, CySEC, FSA

Up to 1:500

From 0 pips

Broker Type:
ECN
6 Accounts

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

Axi 


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

InstaForex

BVI FSC

Up to 1:1000

From 0 pips

Broker Type:
MM | Binary
 6 Accounts

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

NordFX

VFSC

Up to 1:1000

Floating spread from 0.9 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 
Shares, Crypto

FXOpen 

ASIC, FCA

Up to 1:500*

Floating spread from 0 pips

Broker Type:
STP | ECN
 6 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

Vantagemarkets

CIMA, ASIC, FCA

Up to 1:500*

From 0.4 pips

Broker Type:
STP | ECN
4 Accounts

Forex, Indices,
Commodities, 

Metals, Energies,

Shares, Crypto

RoboForex

FSC

Up to 1:2000

From 0.0 pips

Broker Type:
MM | STP | ECN
5 Accounts

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

Fxview

CySEC, FSCA  and FSC

Up to 1:500

From 0.0 pips

Broker Type:
Raw | Zero | Premium
3 Accounts

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

FBS

CySEC, FSC, FSCA, ASIC

Up to 1:3000 

From 1 pip

Broker Type:
STP | ECN
 6 Accounts

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

Blackbull
Markets

FMA, FSA

Up to 1:500

From 0.0 pips

Broker Type:
STP | ECN

6 Accounts

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

  Review  


Blueberry Markets

ASIC, SCB

Up to 1:500

From 0.0 pips

Broker Type:
ECN | MM
2 Accounts 

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


VALUTRADES

FCA, VFSC
CIMA, ASIC

Up to 1:500

From 0.0 pips

Broker Type:
ECN | MM
4 Accounts 

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


FXGT

SFSA, FSCA, CySec*

Up to 1:500

From 0.0 pips

Broker Type:
STP | ECN

6 Accounts

Forex, Indices,
Commodities,
Shares, Crypto

  Review  


SVGFSA, FSC, FSA

Up to 1:500

From 0.0 pips

Broker Type:

STP | ECN 

3 Accounts

Forex, Indices,
Commodities,
Shares, Crypto

Exness

FCA, CySEC, FSA, CBCS, FSC, FSCA

Up to 1:3000

From 0.4 pip

Broker Type:
STP | ECN
 6 Accounts

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

  Review  


FINMA 

Up to 1:100

From 0.1 pip

Broker Type:
STP | ECN
 7 Accounts

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

What makes an ECN Trading 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

ECN trading has a number of disadvantages as well. It can be quite complex, which is one of its primary drawbacks.
This is because numerous financial institutions are involved. This can make the market difficult to comprehend.
Volatility is yet another disadvantage of ECN trading.

This is because prices can fluctuate rapidly. This can be a difficulty for inexperienced traders. ECN trading carries additional hazards.

ECN trading may also incur higher fees than other trading methods.
This is because setting up and maintaining an ECN trading system can be costly.

ECN execution ECN Fees

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?
ECN Brokers 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 appropriate for all investors. It can be highly intricate and volatile.
It is also essential to observe that there are a number of associated risks.
However, ECN trading does offer several benefits.

These include a more efficient market, reduced transaction fees, and increased anonymity.
If you are contemplating ECN trading, you should consult with a financial advisor to determine if it is suitable for you.

A few individuals may avoid ECN trading due to the inherent dangers. Nonetheless, it is essential to keep in mind that all investments carry some degree of risk. Understand the risks involved and make a well-informed decision as to whether ECN trading is right for you.

ECN (Electronic Communication Network)

Electronic trading system with services similar to those offered by an exchange
ECNs are alternative private trading systems in the US.

They are permitted to access the Nasdaq system provided they fulfill the following requirements, which were laid down by the US Securities and Exchange Commission (SEC) in January 1997:

Price information must be disseminated on an ongoing basis.

The ECN must provide for limit book management or ongoing auctions.

Customer orders must be (automatically) matched and executed.

Moreover, the operators of the ECN must guarantee that they will forward the best available market maker orders to the Nasdaq system.

Customers can view the ECN order book via a terminal or the internet. If a participant places an order through an ECN, the ECN attempts to execute the order in its own order book; if this is not possible, the order can be forwarded to Nasdaq or to another ECN.

Orders are released from the system for only a brief period of time (e.g. 90 seconds) so that the ECN’s own order book will remain sufficiently liquid.
The obligation to ensure the best execution of customer orders is intended to prohibit an ECN from matching orders internally when the trade could be executed at a more favorable price in other markets.
Thus, ECNs must link their order book with other markets to guarantee best execution. as quoted by Deutsche Boerse Group

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 crucial to your trading journey.
There are a number of factors you should consider specifically for ECN trading before settling with the broker you may be trading with or when switching to a broker that is best suited to your needs and factors that are important to you.
These are the brokers I have reviewed:

ECN Recommended Low Spread Forex Brokers

FP Markets

Since 2005

Offices:

Australia, Cyprus, South Africa

FP Markets

Minimum Deposit:50 USD 
Account currency: USD, EUR, GBP
Leverage:1:500*
Accounts:Raw, Standard, Pro, IRESS account
Instruments Offered: Forex, Indices, Commodities, Metals, Energies, Shares, ETFs Crypto, Bonds
Trading Platform:MT4, MT5, cTrader, WebTrader, Mobile App,  Superior VPS solutions
Regulation:ASIC, CySEC, FSCA
Spreads:Raw:  from 0.0 pips,
Standard: from 1.0 pip   
Visit BrokerBroker Review

InstaForex

Since: 2007

Offices:

 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:BVI FSC 
Spreads:0 pips: Insta.Eurica and Cent.Eurica;
3–7 pips: Insta.Standard and Cent.Standard
Visit BrokerBroker Review

FXOpen

Since: 2005

Offices:

UK, Australia, Cyprus, Nevis 

  FXOpen

Minimum Deposit:$15
Account currency:GBP, USD, EUR
Leverage:Up to 1:500
Accounts:Micro, STP, ECN, Crypto, Demo
Instruments Offered:Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies
Trading Platform: MT4,   MT5*, TickTrader*  Free Forex VPS Hosting
Regulation:ASIC, FCA
SpreadsMicro: Floating Spread
STP: Tight Spreads
ECN: Raw Spreads
Crypto: Tight Spreads
Visit BrokerBroker Review

RoboForex

Since: 2009

Offices:

Belize

RoboForex

Minimum Deposit:$10
Account currency:USD, EUR, and GOLD
Leverage:1:2000 
Accounts:ECN, Pro, Prime, ProCent, R Stocks Trader
Instruments Offered:Forex, Indices, Commodities, Metals, Energies, Shares, Cryptocurrencies, Futures
Trading Platform:MT4, MT5, WebTrader, Free VPS-Server, R StocksTrader
Regulation:FSC 
Spreads:From 0.0 pips
Visit BrokerBroker 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
SpreadsFrom 0
Visit BrokerBroker 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 BrokerBroker Review

Cory Mtchell

Cory has been a professional trader since 2005, and holds a Chartered Market Technician (CMT) designation. He has been widely published, writing for Technical Analysis of Stock & Commodities magazine, Investopedia, Forbes, Benzinga, and others.