ECN Forex Trading

How does ECN Forex trading work?

When you trade Forex, as opposed to trading stocks or equities, you’re not exchanging any physical goods. Thanks to an Electronic Communications Network (ECN) the Forex market is able to operate without a central hub as it links buyers and sellers directly through what is known as OTC (Over The Counter) trading.

The most prominent traders in this space include the world’s biggest banks. Collectively, they form what’s known as the interbank market. ECN brokers act as a connection between retail traders and the interbank market, providing access to a market which wouldn’t otherwise be available to retail traders.

An ECN broker will pool prices from multiple sources within this global network and use it to fetch the best available currency rates.