According to the Bank for International Settlements, the forex market sees an estimated $5.3 trillion traded every single day (or an average amount of $220 billion per hour).

There are numerous ways to trade currency in the current market, however, with investment vehicles such as spread betting enabling individuals to profit even as values depreciate.

Investors can also use ECN brokers such as ATC Brokers to trade currency, and this offers number of unique advantages. In this post, we’ll determine the role of ECN brokers while asking how you can choose one.

What’s an ECN Broker?

In simple terms, an ECN broker is a forex financial expert that leverages electronic communications networks (ECNs) to provide clients with direct access to other participants in the market.

When dealing with an ECN broker, this entity will consolidate price quotations from a range of different market participants. This enables the broker to offer clients a tighter bid and ask spread than would otherwise have been available, providing a competitive advantage in a tough and challenging marketplace.

As ECN brokers only match trades between active market participants, they do not trade directly against the client. This is not the case with other types of forex broker, who may occasionally operate unscrupulously and leverage client trades to generate a profit for themselves.

On a final note, it’s interesting to note that as ECN spreads are much narrower than those used by everyday brokers, providers tend to charge clients a fixed commission price per transaction. This creates far greater transparency and fairness in the marketplace, while enabling traders to make more accurate estimations regarding profit and loss.

How to Select an ECN Broker