In modern Forex Trading, ECN or Electronic Communication Networkis generally a bridge that links smaller market participants with various liquidity providers. An ECN broker provides clients with direct access to other participants in currency markets while also facilitating trades for interested investors across the communication network.
How to Find a Good ECN Broker
Many people opt to use ECN because it provides a way for investors to trade outside traditional trading hours while also providing a mechanism for those who cannot be actively involved during market times. ECN offers flexibility, lower commissions, and fees, and provides a level of anonymity for investors who are interested in making large transactions.
How to choose the right ECN broker for you
Since the Forex market is the largest financial market available, countless numbers of Forex brokers are available to help traders make “after hours” trading while connecting with other investors. When it comes to selecting an ECN broker here are some tips you need to remember:
1. Complies with various regulations
This means making sure your Forex broker is registered. In the United States, a reputable broker must be a member of the National Futures Association (NFA) as well as the U.S. Commodity Futures Trading Commission (CFTC). The following organizations serve to protect the integrity of the market as well as its traders and members by establishing rules, programs, and services they must follow.
Fortunately, most legitimate brokers state their membership on their website. If you are currently deciding between brokers, make sure to read their “about us” page to learn about their accreditation. Avoid getting swayed by flashy websites since they may be operated by illegal parties.
2. Offers different account offerings
Forex brokers operate several accounts, each of which may require a fee per operation. Some of their accounts include:
-Leverage and Margin
-Commissions and Spreads
-Initial Deposits and Withdrawals
-Ease of Deposits and Withdrawals
3. Offers various currency pairs
While there are major currency pairs available, most Forex brokers also offer different options in cross currency pairs and even exotic pairs. While the two have less liquidity compared to major pairs, investors may find it worthwhile to start with a broker who is flexible with their offerings.
4. Offers excellent customer service
Since the market operates 24 hours a day, a broker’s customer support system should at least be available any time. One consideration that most traders forget is how brokers attend to queries and concerns. To know what type of customer service they provide, try to call the broker or contact them via email with any question you may have. Take note of their response time, whether they are using an automated service, or if they were able to provide helpful information regarding spreads, leverages, regulations, and company details.
With the increasing number of brokers available in the market, it’s not surprising that there are several options that many traders can choose from. Aside from following the tips mentioned, investors may also benefit from constant research in reputable sites like LinkedIn, honest review sites, and even social media accounts. While all these tasks may seem time-consuming, selecting a good ECN broker is simply an investment we cannot neglect.