topecnlist (3)

1
When Choosing a Forex Broker Market Makers
ECN's or STPS and Dealing Desks? what is
the Difference?

• What Does Straight Through Processing - STP Mean?
• An initiative employed by companies within the
  financial world to optimize the speed at which
  transactions are processed. this is often
  performed by allowing information that has been
  electronically entered to be transferred from one
  party to a different within the settlement
  process without manually re-entering an
  equivalent pieces of data repeatedly over the
  whole sequence of events.
• What Does Transmission Network - ECN Brokers
  Mean?
• An electronic system that attempts to eliminate
  the role of a 3rd party within the execution of
  orders entered by an exchange market maker or an
  OTC market maker.
• The Disgruntled
• The ECN Brokers grumblings and trading malcontent
  isn't new and has been around since the Forex
  market began. As lately this discussion is
  exceedingly fierce and is gaining in popularity.
  As we all know change isn't something we embrace.
  Such questions like, why are my spreads changing
  and getting wider? I don't ever remember spreads
  being this far apart. My order slipped more pips
  then it might have normally. what's going on? Why
  is that this happening now?
• As the market changes and adapts the Forex ECN
  Trade evolves. The evolution of a ECN Trade is
  witnessed by the news traders which have needed
  to vary strategies, and the way they trade
  economic news. The potential to form great gains
  is clear with economic news releases, and it had
  been shortly before traders caught on. Such
  strategies as straddling the market before news
  releases became more prevalent.

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How does the market react to such changes?

• How does this affect ECN Brokers, traders and
  what are the results of using ECN/STP type ECN
  Brokers and does it benefit a trader to use an
  ECN Brokers the above circumstances? the solution
  to the present requires some further inspection
  into market makers and their relationship with
  Interbank Forex market and subsequent liquidity
  providers.
• It's no secret retail ECN Brokers are the counter
  party to all or any of your currency market
  transactions. once you execute your trade the
  other side of your ECN Trade is taken by another
  trader a bit like you. The resounding affect for
  the ECN Brokers is that they receive a commission
  for facilitating your trade.
• Now let's check out another means to facilitate
  your trade. instead of sending your trade to
  liquidity providers for processing there are
  market makers which take the other side of your
  transaction so as to help facilitating the ECN
  Trade. A Market Maker may decide because the
  texture youre getting to lose anyways it
  benefits them to require your order and confine
  house.

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• In the first instance where one trader is out
  there to require the other side of your trade is
  right until there's no volume then you get to
  know an ECN Brokers and STP Best ECN Brokers.
  With an ECN Brokers and STP you're submitting
  market orders. Market Orders get filled when
  there's the quantity to try to so otherwise you
  get off quotes which tell a trader nobody is
  willing to risk taking your trade/order. During
  times of high volatility like economic news,
  spreads can widen with an ECN Brokers, STP and
  the other sort of broker unless you've got a Best
  ECN Brokers which charges a hard and fast spread.
  Not only will the spreads perhaps widen you'll
  not get your order filled at the worth you
  intended. Seconds could pass before you get
  filled causing slippage or requoting.
• So now you see how it's possible to be perfectly
  proud of your broker then the principles change
  and you begin to ascertain more instances of
  slippage, more requotes and or off quotes then
  you had seen previously. you're really at the
  mercy of the market. The more traders that hop on
  board and trade economic news the less likely the
  conditions will remain favorable. How long does
  one suppose a broker and subsequently a liquidity
  provider getting to be willing to lose money? So
  it should become obvious a business model change
  is so as. an equivalent ECN broker you used
  previously for news trading is not so willingly
  to facilitate your order(s) at the worth where
  you'll potentially turn a profit. Your broker has
  issues with all of these orders for Euros that
  no-one wants now. So what does the market maker
  do now? Well they're going to slip the worth,
  widen spreads or shutdown the power to ECN Trade
  during new releases.

4
So you are not happy anymore. Is it time to seem
for a replacement broker?

• When the playing field changes for you as a
  trader suspicion sets in and you begin to wonder
  if your Best ECN Brokers isn't taking advantage
  of you. you've got certain expectations once you
  attend place your order and now it just looks
  like you are not making any money and you are
  feeling as if your broker has pulled a quick one.
  So you begin to seem around for a far better
  deal. You ask your trading colleagues and search
  the web to form a change.
• So what now? Where does one look?
• In your search you discover the right Best ECN
  Brokers for your specific needs. So you proceed
  to download their demo, and therefore the spreads
  are amazing. Not only that but they need straight
  through processing and direct market access.
• The STP/ECN experience

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• Your perception and faith is once more restored.
  We always thought the STP/ECN model would finally
  put an end to cheating and if we ONLY could ECN
  Trade with an immediate link to the market unlike
  those dirty rotten dealing desks we might be set
  to trade profitably and without intervention.
• Immediately you start to note slippage albeit you
  were sold a bill of products of no slippage. So
  why does this happen? Well you're getting a taste
  of truth STP/ECN environment. you're not really
  getting slipped you're getting exactly what you
  asked for. a true dynamic market which provides
  ECN Trade with market orders. The market changes
  during a Nano second sometimes, so because price
  isn't static the worth you requested isn't always
  the worth which is being offered at that point.
  So youre not being cheated you're getting
  precisely what you asked for, the sole difference
  is that the price moved before youre getting
  filled. during a heavily volatile market the
  differences are often more glaring then a pip or
  two and that is albeit you get filled. it's
  possible during times of economic news you'll not
  get filled in the least. Bottom line simply
  because you're selling doesn't mean someone goes
  to shop for what your selling especially during
  times of uncertainty.
•  
• You should if you've got not already get a pity
  the market during news times where there's a
  frenzy of activity both from bankers and
  speculators on news. you'll see price moves
  erratically so if you're getting to participate
  during this quite market you ought to know all
  bets are off. There are not any stops losses nor
  take profit price guarantees. you're at the mercy
  of what the market offers you during times of
  heavy volatility.
• Another consideration are commissions. With an
  ECN or STP broker you generally pay a commission
  and spread but a minimum of the spread may be a
  true raw spread and not increased or manipulated
  by your broker. You're seeing spreads the
  liquidity providers sets.

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In the end your left wondering is an ECN really
worth it?

• It depends on your trading style if an ECN/STP is
  true for you. the rationale these sorts of models
  are gaining in popularity is due to transparency.
  The STP/ECN model allows for pricing to travel on
  to the market with none intervention by the
  intermediary like with a dealing desk type model.
  This model can also offer you peace of mind with
  reference to their inability to require advantage
  of price manipulation. this is often not an
  absolute fool proof nor absolute transparency
  however its what we've to figure with presently.
  it's the simplest means we've to figure with and
  as you've got little question discovered where
  there's a chance to take advantage of, someone
  will always plan to do so.
• Bottom line is that if you're happy then there's
  no need for you to vary Best ECN Brokers or means
  of how you ECN Trade forex. STP/ECN models aren't
  the being all and end about if you're wanting to
  meet up with to the particular market then this
  might be the model for you. There are some
  specialized market makers out there which supply
  enough benefit that's worth staying especially if
  you've got a smaller account. Such things they'll
  offer are never having to stress about losing
  extra money then what's in your trading account.
  Perhaps you're trading with an EA or Expert
  Adviser which scalps the marketplace for a couple
  of pips.

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• Obviously if your spreads aren't tight then
  you're either not getting to be profitable or not
  as profitable as you be with a corporation which
  provides guaranteed fixed spreads. Other
  considerations when choosing a broker include,
  leverage, speed of execution, funding methods and
  a number of other items you would like to
  completely understand. We cover all of this at
  http//www.topecn. Take the time to require our
  test to offer you some insight into what broker
  is best for you. Take a while to review our site
  and educate yourself during this wonderful world
  of Forex. I even have been battling within the
  forex trading area for 12 years and within that
  point developed a robust passion for sharing the
  knowledge I even have gained over the years.

8
Guide on ECN Broker and Its Advantages Against
Fixed Spreads

• Generally speaking, there are two major
  classifications of firms within the forex trading
  industry. One is named the Market Maker and
  therefore the other are often classified as ECN.
  Best ECN Brokers stands for Electronic
  Communications Network. Amongst the 2
  classifications, perhaps you'll have already
  heard of Market Maker broker instead of an ECN
  broker.
• Although not too many forex traders are using
  Best ECN Brokers, this classification is being
  introduced now within the market and is being
  made popular due to the wonderful advantages that
  it can bring. Unlike the Market Maker, the
  Electronic Communications Network broker doesn't
  have a selection that's fixed. this suggests that
  the spread will greatly believe the selling and
  buying rates within the market. this is often the
  most advantage of Best ECN Brokers over Market
  Maker broker.
• For sure, you'll have already met and addressed
  forex brokers that only offer a hard and fast
  spread, which is sweet if the buying and selling
  rates are good. But the most problem with fixed
  forex brokers is that the rates remain an
  equivalent regardless of how high or regardless
  of how low the selling rates are. On the opposite
  hand, a forex ECN broker can guarantee and assure
  investors a bigger percentage of success thanks
  to its flexible characteristics. It can greatly
  adapt to the rates within the market which is
  even better for traders.

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• Another great point about forex ECN broker is
  that you simply do not have to travel in dealing
  desks. this suggests that your money won't need
  to undergo different processes and can head on to
  the Interbank Market. This process or method is
  additionally referred to as Straight Through
  Processing or STP. this is often actually tons
  easier since there are not any dealing desks, and
  you're handling the banks within the market
  directly.
• Why should I select ECN broker?
•  
• With a forex ECN broker, you'll easily determine
  the market's depth since the orders that had been
  made and sold are often easily seen. Although the
  one that did the trade will remain anonymous, all
  the transactions made within the market and
  therefore the corresponding amount are often
  found. this suggests that the status or the ratio
  of supply and demand is transparent to everyone
  and dealing isn't getting to be an enormous
  problem in the least.
•  
• How to start with ECN?
•  
• An account with a forex broker must be opened.
  Opening of an account within the use of America
  usually starts at 5,000.00. this is often
  because the most quarters of those ECN brokers
  are either on USA, UK, or Britain. There are
  often various channels in Electronic
  Communications Broker and every one of those
  channels are all connected to the interbank
  trading. Depositing and withdrawal of amounts are
  often easily done through your MasterCard,
  although this is often the sole method that ECN
  brokers accept.
• The best thing about ECN brokers, is that they
  are doing not compete with their clients or maybe
  trade against them. What these brokers do is
  accept the payment from your MasterCard, and
  forward your deal to the interbank market
  directly. That's it! No questions asked!

10
How an ECN Broker Uses Professional Forex
Strategy?

• Forex strategy is predicated on certain criteria
  and quite likely profitable strategy is employed
  for many given currency pairs. once you encounter
  highly volatile currency pairs, then you would
  like to seem at using breakout strategies.
  Momentum ECN Trade are much more attractive when
  using moderate volatile levels also as strong
  trend values. And in fact rock bottom volatile
  percentile and trad indicator figures make range
  trading exceptionally attractive.
•  
• ECN Brokers is an unregulated global market
  whereby trading doesn't occur on an exchange and
  neither does it have a physical address where
  business is completed , as against equities that
  are ECN Trade via exchanges worldwide, like the
  London stock market and NY stock market , where
  exchange transactions happen between agreeable
  buyers also as sellers worldwide over the
  counter. Exchange rates of any currency pair is
  networked and not centralized and may vary from
  one broker to a different .
•  
• The largest banks within the world are the most
  market players, and this is often where the
  foremost activities happen and is understood
  because the interbank market. Retail ECN Trade as
  an example don't have access to those markets, as
  they need no credit connections with these large
  ECN Brokers strategy players. There are two sorts
  of retail ECN Trade that trade ECN Brokers like
  the electronic communications networks (ECN
  Broker) and market makers. Market makers set the
  bid on their system also as display them publicly
  on their quote screen.

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• An ECN broker makes money by charging the
  purchasers a hard and fast commission for each
  transaction. These brokers don't play any role in
  fixing process, therefore the risks of price
  manipulation is reduced for retail traders.
•  
• There are 2 sorts of ECN's which are retail and
  institutional. The institutional ECN's relay the
  simplest bids from institutional markets makers
  like bank to bank and other institutions. and
  therefore the retail ECN's offer quotes from
  traders and banks on the ECN to retail ECN Trade
  .
•  
• Market makers provide a sort of liquidity to the
  stock exchange, and need to take the other side
  of your trade. as an example of you sell the
  market makers must buy and the other way around.
  These exchange rates are supported the market
  makers own interests. And there are times when
  market makers may even hold an order and trade
  against you. On the opposite hand an ECN broker
  passes on prices from many market participants,
  like market makers and banks and display the
  simplest as quotes and best bid on their trading
  platforms supported the said prices.
•  
• An ECN broker uses professional ECN Brokers
  strategy and is a counterpart to ECN Brokers
  transactions and operates on settlement instead
  of pricing basis. you'll see what the important
  supply and demand is for the market as ECN reveal
  truth market depths. These brokers are directly
  connected to the interbank trading. ECN brokers
  don't ECN Trade against their clients but instead
  forward the orders onto interbank trading. Strong
  extensions and powerful hunting of any spread
  doesn't occur because the ECN's make sure you
  catch on the ECN Brokers market and gain.

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What Are Electronic Communication Networks (ECN)?

• Today everyone who's involved in operations on
  the US stock exchange knows about ECN Brokers.
  But there aren't many of us who really understand
  the essential principles of ECN Brokers. this
  text explains the foremost important things about
  ECN Brokers systems.
• ECN is an automatic computer trading system. the
  primary ECN was INSTINET - a trading network
  established in 1969, long before the term ECN
  Brokers List appeared in dictionaries. Most of
  the opposite ECN Forex Broker (ISLAND, REDI,
  ARCHIPELAGO, BLOOMBERG, BRUT) are built on the
  principles of the primary ECN - INSTINET. New
  rules of order execution became a catalyst for
  the intensive ECN Brokers List development. New
  rules were approved after an extended discussion
  within the investors' community, also as in
  brokerage houses. the most goal of the new rules
  was the modification of the prevailing order
  execution algorithms in order that every investor
  could get the simplest possible price by an order
  submission, whether he buys or sells shares. New
  rules were to terminate all market-makers'
  opportunities to realize extra take advantage of
  unfair order execution. ECN Brokers manage this
  task within the absolute best way. By the way,
  ECN Forex Broker allow performing on the stock
  exchange without market-makers more efficiently.

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• The first task of ECN Brokers List systems is to
  execute buy orders by sell orders of equal
  volume. This process goes automatically, for
  instance, if the system receives a sell order for
  1000 shares of XYZ Inc. at 10 per share, it'll
  search for an equivalent buy order (i.e., an
  equivalent amount of shares at a specific price).
• Automated search of two equal orders is that the
  fastest and therefore the best way of fulfilling
  orders. By the way, FIFO execution principle
  (First in First Out) guarantees individual
  investors a good execution not counting on
  personal trading volumes.
• So, today ECN Brokers work as a quasi-stock
  exchange. If an opposite order isn't found within
  the system, an ECN Forex Broker uses an
  equivalent algorithm because the NASDAQ does it
  transfers the simplest available bid and offer to
  the NASDAQ. NASDAQ's Level 2 information screens
  show this quotes under the name of the ECN.

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• When the bid or offer of the ECN becomes the
  simplest among available on the NASDAQ, anyone
  who is following NASDAQ quotes, enters his
  opposite order at an equivalent price which
  results in the execution of the order, originally
  entered within the ECN Brokers.
• Thus, ECN fulfills two functions it's an
  electronic quasi-exchange and a market maker
  within the trading system NASDAQ. Under the
  principles of the Securities Commission (SEC),
  ECN Brokers List are often registered as an
  electronic stock market, i.e., they're officially
  recognized as stock exchanges.
• ECNs' advantages
• The main advantages are anonymity, automated
  order execution and low costs. Buyers and sellers
  can put their orders into ECN Brokers List and
  not worry that information about their activity
  will affect the market. there's completely no
  human think about order execution, thus far the
  electronic system accepts and executes all
  orders. ECN Brokers not only speed up the trading
  process, but also spare investors money they
  are doing not attempt to make extra cash on the
  difference between the worth

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• so as and therefore the actual market value a bit
  like it happens on the way "broker-NASDAQ
  market-maker".
•  
• Today many ECNs expand trading time by adding
  several trading hours before and after an open
  market session. it's obvious that within the near
  future trading through ECN Forex Broker are going
  to be available around the clock.
• ECN's disadvantages
• Trading in ECNs is extremely efficient if you
  trade highly liquid stocks that have tons of
  one-time buy and sell orders. That increases the
  probability of the presence of two active
  opposite equal orders within the system. it's
  going to be not a really good idea to trade less
  liquid stocks in ECN Forex Broker. during this
  situation it's better to send your orders to
  traditional market-makers of the NASDAQ.
• By the way, an equivalent share can have
  different liquidity level in several ECN Brokers
  List.