{"id":3499,"date":"2020-04-15T16:36:54","date_gmt":"2020-04-15T13:36:54","guid":{"rendered":"https:\/\/roboforex.com/blog\/?p=3499"},"modified":"2023-06-23T09:41:33","modified_gmt":"2023-06-23T06:41:33","slug":"what-are-ecn-accounts-on-forex","status":"publish","type":"post","link":"https:\/\/roboforex.com/blog\/blog\/2020\/04\/15\/what-are-ecn-accounts-on-forex\/","title":{"rendered":"What are ECN Accounts on Forex?"},"content":{"rendered":"\n

In this review, we will discuss the use of ECN accounts<\/a> for trading on Forex<\/a>. Such accounts feature better trading conditions.<\/p>\n\n\n\n

<\/span>How do ECN accounts work?<\/span><\/h2>\n\n\n\n

ECN stands for Electronic Communication Network; it is a system meant for carrying out trades on Forex without agents. All applications of market participants trading via ECN are gathered in a database called market depth. A special algorithm processes the applications automatically.<\/p>\n\n\n\n

\"ECN<\/a>
ECN account execution.<\/figcaption><\/figure>\n\n\n\n

ECN accounts first appeared in 1999. Since then, the system has been constantly extending and growing popular. Its members are large banks, broker companies, various funds, individual traders. Thanks to a big number of participants and high liquidity, ECN executes orders almost momentarily and with small spreads.<\/p>\n\n\n\n

The peculiarities of ECN accounts are a small floating spread and a broker's commission fee. The floating spread is normally minimal (starting 0 points) but may increase if volatility<\/a> grows rapidly or liquidity shrinks. To access the ECN smoothly, its members pay a small commission fee for each trade to their brokers.<\/p>\n\n\n\n

Regardless of the commission fee, an extremely narrow spread makes the trader's expenses on each trade smaller than they would be on standard Forex accounts. Thanks to a high speed of trade execution and a lack of requotes (troubles with opening or closing a trade due to a rapid change of the price), the trading conditions of ECN accounts suit well for active trading on Forex.<\/p>\n\n\n\n

<\/span>Advantages and drawbacks of ECN accounts<\/span><\/h2>\n\n\n\n

Let us discuss the main advantages and drawbacks of ECN accounts in more detail.<\/p>\n\n\n\n

<\/span>Advantages of ECN accounts<\/span><\/h3>\n\n\n\n