What is a True ECN Account?
These days a number of people are learning more and more online trading. A few years ago, maximum dealers would have no clue if you questioned what ECN was. Thanks to the Internet and the free knowledge accessible to the people.
> With the help of internet, now maximum traders know how to pick a right broker and what an ecn trading account brokerage and market maker system is.
However, scams never stop deceiving. Since maximum traders seek for ECN brokers to begin, several scam brokerages that were used to be a market maker, tell themselves ECN/STP now. They are not right ECN/STP brokers. This is what you have to be conscious of. So, what is a true and right ECN/STP broker?
What is ECN?
ECN Stands for Electronic Communications Network.
> An ECN broker is the one that has its platform electronically attached to the interface of global banks.
> When you trade by such a platform, indeed you are interacting and trading with the real and genuine international currency market.
– STP stands for Straight Through Processing. It implies everything from putting the orders to closing them automatically and electrically.
> Does it imply that if a merchant electronically combines the platform you install on your PC to another group known as a liquidity provider, it is an ECN/STP agent?
The answer for this technically is yes. But what would happen in a case that so-named provider is another added market maker broker that relates to the corresponding firm?
That is yet an ecn account agent. Despite off all these, mind that it is a false ECN broker. The reason being is he directs your requests to another market maker broker that shreds you off. Or, it directs requests to a separate system with another name which refers to the equal company. We mean they use your money from one pocket and insert it in a different pocket. In both instances, you are not exchanging with the real currency system. You are trading with a market maker agent that wants you to fail.
Why do they do this?
They do it because they desire to pretend they are ECN/STP, not a business maker. They proudly display it on their websites.
Who is a True ECN/STP Broker?
A true ecn account forex agent is the specific one whose platform is attached to well-established liquidity providing organisation. The agent just routes your requests to the liquidity provider. The liquidity provider earns money through the swap and spread. Whereas the agent makes funds through the payment, they charge you. You give the spread and exchange to the liquidity provider and the payment to the agent.
Nowadays, maximum true ECN/STP brokers are associated with certain liquidity providers at the corresponding time. When you desire to put an order, the system automatically picks the liquidity provider that is giving the conventional price. After this, your request will be assigned to that liquidity provider. Hence, your orders will be divided between several liquidity providers, and none of them will have an opportunity to go opposite you in the event you make money. That gives the best likely service for you as a dealer.
Few brokers are true ECN agents, though they improve the spread by charging extra. But, mind that there are few of the brokers that don’t notify the customers about this undisclosed fee, and when you question them why the spread is over high, they say that it is the market’s average spread, which is a myth. So, always keep in the mind that a right and genuine ECN agent can make you a fool as well.
So, whenever you need to locate an agent, firstly be certain that he or she is a right and true ECN broker. Moreover, question them about charges. Always question them and see if can offer you with any sort of proofs and evidence. In the situation, if they declined to provide you with a right answer, don’t begin an account with them. Once, you get to understand these things then you’ll be capable of locating a broker who could assist you to get true ECN account.