ECN stands for Electronic Communications Network. An ECN broker allows direct access to the market. A Forex trader places orders which are matched up with other traders who wish to buy or sell.
ECN Brokers tend to have tighter spreads and the orders are more transparent than retail Brokers where the trader is placing orders against the broker.
All ECN Brokers use the same data feed and trade at an exact price which can be seen by all other market participants, as such, ECN Brokers are usually more transparent than retail equivalents.
Contributed by: Ralph Windsor
ECN Brokers tend to have tighter spreads and the orders are more transparent than retail Brokers where the trader is placing orders against the broker.
All ECN Brokers use the same data feed and trade at an exact price which can be seen by all other market participants, as such, ECN Brokers are usually more transparent than retail equivalents.
External Links
Electronic communication networkhttps://en.wikipedia.org/wiki/Electronic_communication_network
General article describing ECNs (covers other markets as well as Forex).
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