In a market as large as the Foreign Exchange market, various technologies have been developed in order to link clients to vast trading opportunities.
One of which is the Electronic Communication Network or ECN which enables brokers to execute their client’s orders to various liquidity providers. This innovation helps streamline the trading process for traders by making it easy to establish automated trading.
An electronic communications network broker, on the other hand, is an expert that provides their clients access to these multiple opportunities. When you compare different fx brokers, you’ll see that most of them gain profit from commission fees per transaction. These should be presented in a transparent manner that ensures more trust between traders and brokers during work.
When partnered with an efficient broker, a person can increase their profit due to one gaining access to the interbank market. Here are some tips and tricks to help narrow your choices to determine which ECN broker best suits you:
Check their qualifications
If you’re a beginner trader, you have to make sure that you’re checking the qualifications of the ECN brokers you work with. Many reliable brokers are often regulated by their respective company policies as well as the vast regulations established by their country. These restrictions were created to protect investors from making risky trades while also defining what a broker should or shouldn’t do during work.
When checking for regulations, it is important to see whether they are regulated in your country or other countries since the latter may not be applied in your area.
Check different charts
During trading, there are charts you have to check when it comes to knowing the bid they will be placing and the exchange rates that the bid will be placed under. Here are the charts you should check:
- The forex brokers’ chart that is usually provided by your broker
- The order chart which you should decide on your own when placing your bid
The reason why it’s important to check order charts is because certain brokers may emphasize that you don’t need to worry since they’ll do all the work. This can be worrying especially since they can easily extract more money from you when asking for a higher bid. When in doubt always refer to the charts.
Ask about your order limit
An order limit refers to the number of bids and auctions you will be participating which more or less dictates the validity of your broker. Since there is actually no such thing as an order limit, brokers who provide a number, make it a habit to oppose to your decisions, or push you to make particular deals may invest their own personal interests rather than your own.
Considering that most brokers actually care more about commissions regardless of the bids placed, it’s definitely a telling sign that brokers with specific concerns on how you make your bids may have an ulterior motive of their own. When it comes to trading, make sure to keep your personal feelings aside and rely on objective data not because you are being pressured by your broker or the tense situation at the moment.
Take note of their professionalism
A person needs to take into consideration all the precautions that come with hiring an ECN broker. While not every person is perfect at their job, there are certain telling signs that helps you determine whether working with a certain firm is a good investment or not. More often than not, a reliable ECN broker is someone you can trust and who is quick on their toes when it comes to delivering updated information. This means they should be:
- well-versed on which factors currently affects the market as well as provide reasons on why certain deals weren’t successful
- giving you an impression that they are not only efficient in their work but are both resourceful and reliable
- responsive to your general inquiries and concerns
Reliable brokers often make it a point to invest in easy-to-use communication channels like email, chat softwares, and providing emergency contact numbers. If you have a hard time getting your broker on hold, it may be a sign that they are not really reliable when you need them the most.
When in doubt, it also helps to practice proper research by visiting various ECN brokers sites, their social media networks, as well as check reviews from other clients they have worked with. While the latter is subjective, a firm with favorable reviews are definitely more trustworthy that those with a controversial reputation.