Pros Counter ECN (ECN Broker)
Unlike the brokers or marketers marketers that we have discussed in the previous article. ECN-type brokers offer prices that come from many partisan markets, such as banks and market makers and display the best bid / ask quote on platforms based on these prices.
An ECN type broker can also act as a counterparty for forex transactions, but this broker is only from the settlement side, rather than the base price. Spreads offered by ECN brokers for each currency vary, depending on the trading pair’s activity. And their spreads are not fixed. Even if there is a very high trading activity, the ECN spread may be zero or declare zero, usually in very liquid currency pairs (EUR / USD, USD / JPY, GBP / USD and USD / CHF).
The ECN broker takes advantage of collecting fixed commissions from clients for each transaction. The original ECN broker does not manipulate the price, therefore the risk can be avoided by the retail trader.
Clients can get better Bid / Ask price quotes because they come from a large and varied source.
The client can get the smallest spread or even no spread at all at any given time.
The original ECN broker will not hamper client trading, as they assist clients by throwing client orders to banks or other liquidity providers.
Prices can fluctuate, which would be a good opportunity to do scalping.
Most ECN brokers do not offer charting software and news feeds.
The ECN broker trading platform may not be user friendly.
Dynamic spreads make it more difficult to calculate stop-loss and turnover (bep).
Trader must pay a commission for each transaction.
The type of broker you use can significantly affect your trading performance. If your preferred broker does not execute your trading at the time you want, it could be your good trading opportunity turned into an unexpected loss. So it will be very important and careful choosing a broker. Consider the pros and cons of your broker type because you will entrust your transaction to the broker.