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How ECN broker works in the global forex industry

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ECN broker means forex financial expert that uses electronic brokerage network. This ECN is a trading network of leading financial institution and individuals which in end of execution of the currency transaction in a direct manner without a middleman. This allows clients to access directly in the global forex industry. This ECN links smaller market to the currency market. ECN pass on prices from different market participants like banks and market maker and other traders as well.

How ECN system works

  • This ECN market accessibility is opening the online forex trading to the individual traders for a small amount of capital.
  • Each ECS system can participate and set their own buying and selling price based on their own interest and on behalf of the clients. All the trading order entered into a database. The system finds the order with the matching product such as currency pair and price, and then the transaction makes automatically.
  • ECN system has gained the popularity amongst the individuals as there is always a buyer and a seller for any bid entered into the system which allows the best execution.   
  • Each ECN individuals can interact with other firm exchange market player and can participate in global currency trading.

Who are the participants?

    • Commercial banks- commercial banks are counted as the most volume on forex.
    • Central banks- That oversee the currency regulation in your countries.
  • Brokerage companies- That provides the opportunity for their clients to participate in the forex market.
    • Import and export companies- With profit effective by foreign currency exchange rates (https://www.xe.com/currencyconverter/) .
    • Investment funds- it invests clients’ assets and performs trading operations around the world.
  • International corporations- That performs conversion transaction through commercial banks and brokerages.
  • Private traders- that are looking to gain the advantage of currency fluctuations on the global currency exchange markets.

The ECN system unites the participants on the global market from all over the world. This allows you to perform trading for any size and thus increases the transparency and liquidity of the financial industry in general.

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