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The ECN FX Broker Advantage


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The ECN FX Broker Advantage

 

It is often said that an educated client is the best client and this applies to understanding options when it comes to forex trading. Investors see the “commission free” trading that is offered by most FX dealers and do not realize that there is a better option, however, it is not free. The better option is the ECN style FX broker.

 

An ECN style FX broker offers clients the same tight institutional rates and the ability to post inside spread, that large players get and charges a commission for this. The primary advantage of an ECN style FX broker is the spread cost is much lower. Although

ECN brokers have generally not been available to the retail level because of trade size minimums, the forex business is beginning to recognize that the industry is heading this direction and more and more of these ECN style brokers are becoming available at lower trade sizes.

 

Most forex brokers are non ECN style dealers which means they make their own market at much higher spreads to the client. In turn they profit on every transaction that a client does, generally without any risk. They do not allow clients to post orders inside their bid ask spread and their have long been questions about how the spreads can change without a client seeing this which results in very poor fills.

 

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