What is ECN broker and how to choose the right one?

Every day $5.3 trillion is traded all around the world what gives an average of $220 billion per hour.

Truth be told, the financial markets are still alluring an increasing number of young investors who aspire to become wealthy and shrewd traders.

If you are one of them or have already started to trade, you should consider using services of a reliable ECN Forex broker.

ECN broker definition

In most simple words, ECN brokers are Forex savvies that use the Electronic Communication Network (ECN) in order to create a trading environment for their customers. This environment allows them to connect their clientele with other Forex market traders. It makes ECN brokers intermediaries between buyers and sellers.

ECN brokers’ income depends exclusively on commissions from winning customers’ transactions (instead of spread differences). Therefore, they always act in favor of their customers as, at the same time, they secure their own profits and well-being.

You can find dozens of ECN brokers listed on the Forex broker rating platforms, but choosing the right for your needs should be a well-thought-out decision as not all of them are trustworthy and reputable.

Choosing the right ECN broker

Checking their credibility

First of all, you need to check if the chosen ECN broker is credible.

In order to verify the credibility, you need to check if they have acquired all appropriate licenses. Licenses allow ECN brokers to prevent their clients from mischievous scams and increase their authenticity.

Therefore you should verify whether the broker you have chosen has CFTC, FCA, UK, NFA, FSA, FSB, CySec or ASIC license. You can do this by doing a proper Google research or check out ECN broker reviews  – for example Treadmill review on ForexRev.com which proves it has FSA and FCA licenses or FP markets review which shows it has ASIC and CySec licenses.

Checking the transparency of payment systems and trading platforms

The transparency of payments systems and trading platforms is also the key feature of every sound ECN broker.

First of all, since they trade with considerable amount of money, you need to make sure that their payment systems are solid and transparent before you make a deposit. What is more, you need to check the minimum deposit (for example FP markets’ one amounts to $100 and Treadmill to $25) and accepted payment methods.

Second of all, since a trading platform is a place where traders, banks and other institutions compete against each other, you need to verify whether the ECN broker of your choice has fully transparent and user-friendly platform as you will be using it heavily.