Today I’d like to talk to you about the ECN broker. Now in the past I’ve talked about market makers and retail brokers as not being your friend in the market place. And they’re not. But now you want to know, well who is our friend? Who am I supposed to trade with? Who’s going to give me the best, most level playing ground for trading?  Well for most little guys in the market, individual traders like you and I, the vast majority of us out here will not have access to the higher more privileged levels of trading like the current high end platforms used by the institutional trading organizations such as banks. Their friend in the market is going to be the ECN broker. This stands for Electronic Commerce Network. This ECN broker is not easy to find. There aren’t very many of them. And frankly the reason for it is that the ECN broker has to work a lot harder and a lot longer to make their money from you as a trader.

The ECN broker does not trade against you on the other side of your trade. The only way they make money is to make money on the spread fee or on a commission. When all the money they make is on the spread fee or the commission that means that they’re not trading in a conflict of interest against you on the other side of your bi-position in a sale position. They only have one incentive for you and that is to see you trade as successfully as you can or they won’t continue making money every time you enter a trade in the market.  

The ECN broker is your friend because they want you to succeed, they want you to trade, and they want you to stay with them as long as possible, and therefore, they’re going to make sure you have whatever advantages they can offer. Their spread fees are tighter, their commission rates are rather low, and quite frankly although they have a variable spread rate it will not vary near as much as that of a retail broker. It’s important when you are trading with a broker that you pick them correctly and carefully. An ECN broker will give you many advantages and they will not sabotage your trades or trip up your trades on the opposite side because they’re not going to make money on your losses.  

I hope my Tips on Trading video clips are useful to you. They can be found at my ForexCoachingPros.com site. Best of luck in your Forex Trading!