What is ECN Forex Trading
ECN Forex Trading in General
ECN means Electronic Communication Network and it is a common way of trading the global Forex Market. Actually, ECN trading creates an electronic bridge between Tier-1 liquidity providers (for example Banks) and smaller market participants (for example retail Forex Traders). This bridge is created through an ECN Forex Broker who charges trading commissions for offering his services.
Characteristics of ECN Forex Trading:
1. Variability of Spreads and the Lowest Spreads
2. Full Market Depth and High Liquidity
3. Instant order execution (no delays)
4. Automated Forex Trading (API Trading)
5. Anonymous Trading
ECN Forex Brokers
Some traders see ECN trading as the best way to trade Forex, others prefer to trade the market using STP Forex Brokers or Market Makers.
» Compare ECN Forex Brokers at TradingCenter.org
Advantages of ECN Trading
ECN is a system designed to avoid the role of a middleman when executing a Forex order. That means that traders who have access to ECN trading are able to participate directly in the Forex market. The theoretical advantage of ECN trading is that traders are not executing orders against their brokers as in the case of Market Makers Brokers. ECN brokers are offering high liquidity, fast execution, and narrow trading spreads and that is why they are preferred by professional traders. Because of the narrow spreads and the high execution speed, ECN brokers are the best choice for day-traders and especially scalpers.
What are Forex Signals?
Forex Trade Signals
Forex signals are trading suggestions to buy or to sell a Forex currency pair at a specific price and time. A Forex signal can be produced manually or using sophisticated forecasting systems. Forex signals as trading orders may be executed manually or automatically using Expert Advisors (Forex robot).
How Forex Signals are Delivered to Traders?
Forex Signals may be delivered free or as a part of a paid subscription service. As concerns the delivery methods, here are the most popular methods:
1) through registration to a signaling web-site
2) via email
3) via SMS
4) via Twitter
5) via an automated system which is called a Forex robot (or Expert Advisor)
What Information is Incorporated into a Forex Signal?
The key information of a Forex signal includes 1) a target or take-profit price, and 2) a stop-loss price. So let’s see a simple example of a Forex signal:
Let’s suppose the signal is about EUR/USD which is actually traded at 1.2000 and the signal provider forecasts an upcoming Euro appreciation:
Take Profit (Target Price): 1.2042
Stop-Loss: 1.1980
