Practice, Practice and Practice! This is what you really need to do on the planet of forex trading. ‘Forex brokers’ are just like an engine and ‘knowledge’ like coal, which is required to run that engine. So, rather than focusing on more and more on quick profits put more efforts to understand the price movements and strategies behind forex trading.
To identify a reliable and experienced forex broker is a challenging task today. They help the traders to achieve their goals but mainly focus their attention for high returns on the investment. ECN brokers are more preferable as they don’t trade against trader. And the most importantly, ECN brokers don’t believe in price manipulation and re-quotes.
With an ECN deal, you directly hit the market from the varieties of traders and competing traders. You invest more money to open an account with ECN brokers but at least they sound reliable and professional and you pay their commission in return of the satisfactorily execution of trades.
ECN brokers are like a middle man who connects buyer and seller even without showing their identity to each other. Things go wrong when investor don’t have any clear objectives towards trading. A clear objective is an important factor to know each and every aspect of forex trading; the only foundation upon which you are going built your successful forex world.
How ECN broker works:
On an advanced platform, ECN brokers, simply display ask-bid prices and connects traders to the banks and all other participants. And finally you get the best trade order which matches you best. You can choose the account as per your choice which suits you better either mini or regular account. An ECN broker doesn’t earn by spread but charge commission, and as they make money through commission they won’t trade against you for sure.
Spreads between pairs that are given by ECN brokers is almost negligible. They are connected to large financial institutions, hedging funds or inter-bank so that they can deal directly with the real market. While trading with the help of an ECN broker, you can create your own spread. You can place an order in between a bid and ask spread having the hope that the ECN broker will find another trader to match the order such that you have a profit.
You need not worry about your orders that they may shuffle or get lost, as these types of brokers try their best to find out the best prices for your order to get maximum profit. ECN brokers simply charge some money to make your profit and this small amount for a trader in return of such profits doesn’t actually matter.
ECN brokers work as per the current prices in the live market. The prices showed on their platform are the same as the prices coming directly from interbank markets. In short, there is no manipulation of currency values. So you are trading with the real trader and there is no mark-up on the spreads. The only thing they take is commission or fees on each transaction that is very negligible.
To initiate a mini account, starting capital is very low which have limited access while for the standard account it may be around $1000.
Once you have a clear vision towards your goals, you would know the market skills, required resources, risk appetite, money management and the trade that suits you best, while dealing with ECN brokers.
A wrong approach can put investors into trouble either to choose an ECN broker or to do with right thinking. So before choosing any ECN broker, do analyze first!