ECN broker

The abbreviation ECN stands for Electronic Communications Network. The ECN Forex broker ensures mutual clearing of orders executed by various clients with the broker (a Party to the deal, namely counteractor) uninvolved. The ECN Forex broker for retail traders is a platform where each order placed has its opposite order either within the company or at the ECN broker′s counteractor. The latter is usually represented by a large company or bank of Europe and the USA and acts as liquidity provider for the ECN broker. Customers of the ECN broker trade in cooperation with each other. They are protected against any risks emerging when trading through the market maker. One of the basic requirements to be met by any ECN broker is high liquidity that allows executing most part of deals among traders within the company. Today over 7 000 000 InstaForex trading accounts ensure huge liquidity satisfying the ECN system needs in full.

In case there is no opposite order for the trade of a client, it is passed to the broker′s counteractor. This technique is called STP (Straight Through Processing). Customers of the ECN broker can monitor the liquidity rate and execute trades. ECN trading has some advantages in comparison with trading through brokers who turn out to be market makers, because deals of Forex traders are not carried out against the broker, as the latter has its own counteractor: either another ECN broker client, or liquidity provided by ECN broker partner.

Unlike market makers and other brokerage companies, ECN-brokers do not play against the customer. InstaForex clients have 24-hour access to ECN trading thanks to high internal liquidity rate and reliable counteractors. Presently, InstaForex Company appears to be one of the most popular brands in the world offering the ECN trading services.