CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Electronic Communication Network (ECN) brokers

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

Electronic Communication Network (ECN) brokers accumulate orders and prices from banks and the market which allows the trader to trade directly with other participants in the market rather than the broker or a Straight Through Processing (STP) liquidity provider.

 Check our list of Electronic Communication Network (ECN) brokers here

What does Electronic Communication Network (ECN) mean?

It means that the broker gives you direct market access (DMA) and you can see liquidity and chose with whom to transact directly in the market.

What are the advantages of using Electronic Communication Network (ECN) brokers?

Direct market access (DMA) means that you trade directly with liquidity providers and avoid the Straight Through Processing (STP) and Market Maker (MM) where the broker decides where to execute for you.

It means more integrity and no conflict of interest.

What are the disadvantages of Electronic Communication Network (ECN) brokers?

High entry requirements in terms of capital. Most brokers ask for at least 10-15k USD.

You are subject to market conditions – this means you need to understand liquidity and the order ladder. If liquidity dries up, you may experience price gaps or may not be able to execute orders.

Also beware:

Many brokers claim to be Electronic Communication Network (ECN) brokers and technically speaking in terms of technology they are. However the fact is that a big amount of them list themselves as a liquidity provider and you still end up being matched with them. Thus make sure to find True ECN brokers, rather than ones which just claim to be but actually aren’t.

Subscribe To Our Newsletter

Get updates and learn from the best

More To Explore

Cryptocurrency

What is a trading bear trap and how can you escape it?

A bear trap is a kind of synchronized but regulated selling used to induce a brief decline in the price of an asset as a precursor to a short-squeeze. When investing in marketplaces that handle with types of investments like stocks, commodity, securities, or even cryptocurrency. New traders are often caught off guard by price volatility.

What are you looking for in a broker?

Select the ‘must-have’ features or requirements that are important to you

Mobile Trading

Trade on Margin

Direct Market Access

Offers US Stocks

Accept Paypal

Offers UK Stocks

Offers MT4

Allows Scalping

Copy Trading

Accepts Credit Card

Allows Hedging

ECN or STP Execution

Offers Altcoins

Offers Crypto Crosses

Fixed Spreads

Variable Spreads

Offers Demo Account

Professional Status

VPS Trading

Zero Spread Account

Mobile Trading

Trade on Margin

Direct Market Access

Offers US Stocks

Accept Paypal

Offers UK Stocks

Offers MT4

Allows Scalping

Copy Trading

Accepts Credit Card

Allows Hedging

ECN or STP Execution

Offers Altcoins

Offers Crypto Crosses

Fixed Spreads

Variable Spreads

Offers Demo Account

Professional Status

BIGINNER

VPS Trading

Zero Spread Account

How experienced are you at trading?

Select the ‘must-have’ features or requirements that are important to you

beginner

Intermediate

EXPERT