ECN Broker

AAA

DEFINITION of 'ECN Broker'

A forex financial expert who uses electronic communications networks (ECNs) to provide its clients direct access to other participants in the currency markets. Because an ECN broker consolidates price quotations from several market participants, it can generally offer its clients tighter bid/ask spreads than would be otherwise available to them.

INVESTOPEDIA EXPLAINS 'ECN Broker'

Since an ECN broker only matches trades between market participants, it cannot trade against the client, an allegation often directed against some unscrupulous retail forex brokers. Because ECN spreads are much narrower than those used by everyday brokers, electronic communication networks brokers charge clients a fixed commission per transaction.

RELATED TERMS
  1. Electronic Communication Network ...

    An electronic system that attempts to eliminate the role of a ...
  2. Authorized Forex Dealer

    Any type of financial institution that has received authorization ...
  3. Forex Broker

    Firms that provide currency traders with access to a trading ...
  4. Forex Analysis

    An examination of the changes in the forex market that are used ...
  5. Forex Account

    The type of account a forex trader opens with a retail forex ...
  6. Bitcoin

    A digital or virtual currency that uses peer-to-peer technology ...
RELATED FAQS
  1. Is scalping a viable forex trading strategy?

    Scalping in the forex market involves trading currencies based on a set of real-time analysis. The purpose of scalping is ... Read Full Answer >>
  2. How do I close a long position in forex?

    Closing a long position in forex trading depends on whether you are using a broker operating under U.S. trading regulations. In ... Read Full Answer >>
  3. Who are cambrists and how do I become one?

    Cambrists (sometimes seen as "cambists," although the two terms aren't completely synonymous) are experts in the field of ... Read Full Answer >>
  4. How do you buy Bitcoins?

    Bitcoin is the first decentralized digital currency. It is sometimes referred to as a virtual currency or cryptocurrency. ... Read Full Answer >>
  5. How can I trade in cross currency pairs if my forex account is denominated in U.S. ...

    The forex market allows individuals to trade on nearly all of the currencies in the world. However, most of the trading is ... Read Full Answer >>
  6. Where is the central location of the forex market?

    There is no central location of the foreign exchange market, often referred to as the forex (FX) market. Transactions in ... Read Full Answer >>
Related Articles
  1. Forex Education

    How To Pay Your Forex Broker

    Three types of commissions are used in this market. Learn how to get the best deal.
  2. Forex Education

    Forex Automation Software For Hands-Free Trading

    Automated forex trading software scans the market for favorable trades based on your input. Find out more about this valuable forex tool.
  3. Trading Strategies

    Scalping: Small Quick Profits Can Add Up

    We look at different styles of scalping, and how they can all be very profitable.
  4. Forex Education

    Is Your Forex Broker A Scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  5. Active Trading Fundamentals

    Where And How Should You Make Your First Trade?

    New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum.
  6. Forex

    The Top 10 Forex Brokers Regulated In The UK

    Overview of the regulation of forex, the Financial Conduct Authority (FCA) and the top 10 UK forex brokers that are FCA regulated.
  7. Forex

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  8. Forex

    Bet On The Performance of Money Managers with a PAMM Account

    Looking for forex brokers offering PAMM accounts for hassle free trade profits? Here is a list of PAMM account forex brokers.
  9. Forex Strategies

    The Top 10 Forex Brokers for Beginners

    These ten forex brokers welcome new traders with user friendly educational tools and resources.
  10. Forex

    Navigating The Labyrinthine US Regulations For Forex Brokers

    Forex is, understandably, tightly regulated. We offer a peek into forex regulations in the US and other countries.

You May Also Like

Hot Definitions
  1. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
  2. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  5. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  6. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
Trading Center