ECN brokers are specialized Forex experts who use the Electronic Communication Network (ECN) to connect their clients with the other players in the Forex market. Since real ECN brokers do not make any profit on the spread difference and charge only a commission, they work non-stop to make sure their client is winning. If you have been in the trading market for some time now and plan to be in it for the long-term, you must consider working with an true ECN broker like Pepperstone or FXOpen UK. Unfortunately, these days, it is not easy to find a good and reliable ECN broker. Though an internet search might throw a hundred names your way, not every ECN broker is a real ECN forex broker. This article aims to arm you with the information you will need to find yourself a reliable ECN broker.
Tips on How to Find Yourself a Real ECN Forex Broker
Here are a few tips on how to separate real ECN forex brokers from scam brokers.
- Do Some Background Research to Understand Their Credibility
Before you decide to go with any particular ECN forex broker, do a background check to understand their credibility. The first thing you must check for is licenses — a license is essential as it allows ECN brokers to save their clients from scams. CFTC, CySEC, FCA UK, FSB, NFA, ASIC, and DFSA are some of the popular and reliable licenses. In general, an ECN broker with one or more trusted licenses could be considered authentic. However, if you want to be extra cautious, check for their trading volume and search traffic. Positive search traffic and high trading volume are indications that an ECN forex broker can be trusted.
- Evaluate Their Payment Systems
ECN traders, in general, invest hefty money and, thus, put a significant amount of money in their account. Therefore, it is imperative to evaluate an ECN broker’s payment system before making any deposits. The good idea is to check the local payment system of the ECN broker you are planning to work with. Moreover, check the minimum deposit and the payment methods that your preferred ECN broker follows. These details will allow you to understand whether an ECN broker can be trusted or not.
- Look for an ECN Broker Who Offers 24/7 Customer Support
Traders work round the clock and, more often than not, need urgent advice or help. Thus, it is a good idea to choose to work with an ECN broker who offers 24/7 customer support. Before selecting any particular ECN broker, check if they have a local office in your area. If not, make sure your broker and their team provide online support through call or chat. That apart, many ECN brokers also offer assistance in multiple languages to non-native traders. This is an added benefit, one that can make a lot of difference.
- Carefully Check the Client Agreement
Make a list of all the ECN brokers you think can be trusted. Next, reach out to each ECN broker and ask them for a client agreement. An ECN broker must mention on the contract if they are qualified to be an ECN broker or not. If you find this information missing, chances are the ECN broker you are in touch with is not a real ECN forex broker. Further, before signing any agreement, ask your ECN broker to tell you about the spread offered. If your broker is offering you a fixed spread, it is quite unlikely that you are dealing with a real ECN forex broker. Similarly, also make sure your ECN broker is a non-dealing desk broker. If their website mentions the term ‘dealing desk,’ you are not dealing with an actual ECN forex broker. These small details will help you understand whether you are dealing with an honorable ECN broker or a scam broker.
ECN brokers provide their clients with liquidity. The brokers create liquidity by working with a pool of liquidity providers. It is, thus, that many traders believe that brokers and liquidity providers maintain a symbiotic relationship that can eventually harm the client. It is, therefore, an excellent idea to do a thorough background check before beginning to work with an ECN broker. We hope these simple tips will help you make the right decision.