Benefits of NDD Forex Broker Trading

In the evolution of forex brokers, ECN or NDD type of execution has been the preferred way for traders. It is therefore true that ECN or no conflict trading has been the way forward when it comes to trading forex online.

At the heart of the issue, lies the fact that an ECN broker represents a network of liquidity providers such as banks and hedge fund institutions alongside individual and institutional traders as well. With an ECN broker, the middle man is cut off as trading takes place within the ECN network. An ECN network should not be confused with a multilateral trading facility.

ECN forex brokers have made it possible for traders to trade in the live and dynamic trading environment which offers transparency of pricing and an improved execution of trades. Something which lacks when it comes to the traditional forex brokers operating in a fixed spread or a made up market environment.

An ECN operates on the basis of matching or pair the orders placed by the client. In other words, all the orders are collected into a central place and based on the orders  such as market or instant execution, the correct buy and sell participants are matched.

Trading with an ECN broker gives the benefit of trading in a transparent and a no conflict trading environment. No Dealing Desk brokers particularly make their money by charging a commissions on the trades, which is how they operate, thus eliminating the need for taking up counter positions or even having the need for a central trading desk.

Pricing and spreads with a NDD forex broker greatly varies in comparison to a fixed spread broker. Furthermore, the two aspects, namely pricing and spreads can be influenced by the participants themselves, for example if someone were to place a large buy order and vice versa.

When trading in an NDD environment, the advantage you get as a trader is the fact that your trades are anonymous. Meaning that no one really knows your information or your trade strategies. This is in stark contrast to when trading with a fixed spread broker, who in all probability knows who you are, has access to your past trade history, your total profit and loss and other such information which can be used to trade better against you.

As ECN trading starts to get more and more popular, many liquidity providers are coming on board to provide better spreads and pricing. Liquidity providers are made up of banks and also companies such as Integral or Currenex that bring with them their own liquidity providers on their ECN networks. Professional traders usually find it better to trade in a no dealing desk environment compared to trading with a fixed spread broker. Of the many advantages, ECN trading allows you the freedom to scalp or hedge your positions, especially of value is news based trading where price movements can be very volatile and to the right trader gives a great opportunity to make profits within a short span of time.

To summarize the above, it can be safe to say that the benefits of trading with a no dealing desk forex broker brings with it a great level of freedom, transparency and anonimity, which clearly lacks when it comes to trading with a market maker forex broker. For the more professional broker as well as for those who wish to take their trading skills to the next level, ECN trading is the right way to get started.

Understanding how Forex Scalping Works

While there are many different forex scalping strategies that are available, one of the most popular and easy ways to scalp forex is trading during significant economic news releases. The fact that the currencies tend to fluctuate quite a bit during such economic releases, makes it one of the easiest ways to scalp the forex markets even for complete beginners to forex.

One of the important aspects of scalping forex during economic news releases is that it involves the use of technical market analysis as well as identifying how the particular markets tend to move as a result of the news, be it positive or negative. The volatility in the pricing arises out of the fact that the news which is being released very rarely comes out to meet the market expectations. This is due to the many variables that come into play which is quite hard for the average economist, let alone a forex analyst to take into account.

The discrepancy thus gives rise for traders to take advantage of the situation and thus set up a robust scalping strategy.

Often, during economic news releases, the prices that fluctuate is largely on account of trader sentiment and the initial reaction. If you observe closely, there are three stages during economic news releases. The first being the instant reaction where the prices tend to fluctuate quite a bit. This is usually triggered by too much buying or selling immediately upon the news that is being released. The second stage is when the markets tend to correct itself and close the discrepancy. Most often, traders with an eye for trading opportunities tend to take advantage in the first step as it usually results in a breakout of the trends and thus placing a proper buy or sell order alongside a stop loss can be quite beneficial.

The third stage is usually when investors digest the information and take into account the news from a larger perspective. In most cases, it is during this stage that the right trends come into play. For example, upon releasing a certain economic news, it could trigger a panic selling, which is later corrected by the markets itself and eventually when the dust settles, traders make the right choice, which is either to buy or sell or hold on to the currency.

The ideal way to scalp the forex markets during news releases is to take up your positions 10 or 15 minutes ahead of the news releases with the right stop losses in place so as to minimize your trading losses in the event the market goes against you. Following a 15 minute chart is ideal in such cases as it enables you to properly monitor the trends in the pricing and place your trades accordingly.

There are many automated systems that tend to scalp the forex markets on your behalf. Such tools, indicators or even EA's does the same job of analyzing the markets and identifying potential trading opportunities. Bear in mind that not all forex brokers allow you to scalp the markets. In fact some brokers do not encourage trading during news releases. For a list of brokers that allow forex scalping, click here.

Scalping itself does not yield instant returns but once you find a discipline and a pattern it can become almost second nature to scalp the forex markets for a few minutes in order to gain a few pips in profits.

Is a Forex Managed Account Right for you?

In the ever changing investment landscape managed forex accounts continue to be at the forefront and at times are the preferred choice of investment. Irrespective of your investment strategy or style, smart investors follow one simple rule, which is to diversify. Putting all your eggs in one basket, or in context, investing all your money into the same kind of stock or mutual fund can prove to be dangerous. The advantage with diversifying your investment portfolio enables you to manage your risks better and at times can help you offset any losses you might incur in other investments.

When it comes to diversifying your investment portfolio, the first things that comes to mind is mutual funds, stocks and bonds. To the average investor these might seem different, but there are subtle underlying factors that are common to all three and it would be naive if you would think you have a good diversified portfolio by investing in just mutual funds, stocks and bonds.

Alternative investment options, such as forex managed accounts is one investment product that should be considered. The reason why many investors hesitate to go ahead with a managed forex account is the large prevailing myth that you can end up losing your money or perhaps the managed forex account you deal with cannot be trusted much. Fact is that when speaking about losses, the same risks holds true whether you invest in a stock or in the bond markets.

Agreed, that investing in a managed forex account takes a bit more time and research compared to mutual funds or other relative products. The reason is because the other investment products are so common that it has become a large playing field for just about any investment company. When you look at the forex managed accounts landscape on the other hand, its still in its infancy, which could substantiate why it takes a bit more than usual when it comes to researching into a good forex managed account.

Forex is perhaps the largest financial market ever with stagerring numbers if you look closer and it is also one of the most volatile and dynamic markets. Within forex there are lot of sub categories such as commodities trading, indices and/or CFD's.

If you are looking to invest in a managed forex account, here is a great article to learn about the basics of investing in managed accounts in forex.

To conclude this article, we leave with some basic tips if you are considering a forex managed account investment.

Research into the forex managed account company. Its ideal that the company is legally registered and also take time to read through the terms and conditions.

Find out how much the minimum investment is required. Some managed accounts offer a low entry point of $2000 and upwards. However, the returns you see on such investments is quite low. On the other hand, this would minimize your risks and also give you time to evaluate on how your fund manager is operating.

Never give your money directly to the fund manager. The most safest route is to sign up with the forex broker your fund manager works with and to fund your own account. You can then sign the Limited Power of Attorney to authorize your fund manager to trade on your behalf.

Want to trade forex online? Important tips to bear in mind

Most of us want to trade forex online. It could be for many reasons. Some like to trade forex simply because love to play with the financial markets. Others see forex as a way of alternative investment. Whatever your reasons may be, here are some important tips to bear in mind even before you start trading or investing in forex.

Currency markets and the movers and shakers

Ask a seasoned forex trader on how they divide their time trading forex and the most obvious answer you get is the amount of time they use in order to analyze the markets and looking out for economic news and developments. These are two of the most important factors that tend to directly influence the economy of country and thus impact the currency’s value as well.

When you have a good understanding of the market movers and the news that you need to follow, it would be as obvious as looking into the various signs that forecast how the currency prices will move.

Because the value of a currency is directly tied to a country’s economy, factors such as political stability, economic strength and to some extent even the geographical factors such as weather tend to influence the prices. It is little wonder why, that so many experienced forex traders tend to spend more time into analyzing and reading the charts. This basically prepares them for upcoming trends or price falls and thus such traders manage to fare better than those who just trade blindly on gut feel.

Tools and tips for analyzing forex markets

There are many ways for traders to get started in analyzing the forex markets. One specific tool that is a ‘must have’ in every forex trader’s arsenal is the forex economic calendar. The economic calendar is nothing but a list of events scheduled for the day or the week or month, depending on how you wish to see it. Traders usually prefer the weekly charts, if they are weekend strategy planners or perhaps the daily chart which gives details on the day’s upcoming economic events.

Most of the events usually carry the currency that will be affected, time of the release and the release website. Other critical information also includes previous performance and the market expected data. Traders, especially forex scalpers find it very beneficial to use the economic calendar as it can help them to prepare their forex scalping strategy.

Risk management is another important factor that we will touch upon. A wise trader usually places their traders in a way that they limit their risks. This can include, using only a small part of their invested capital to using trailing stops and setting up the stop loss and take profit levels. All of these combined basically are targeted towards building a safety net for the trader in the event the markets do a reversal and the prices go against your trades.

It is always good to focus on a single currency pair instead of trading 3 or 4 pairs at a time. This helps you to retain your focus and also pick any signals you might see from the market events. Looking at charts for a currency pair and how it has been performing in the past few days is a good indicator on how things stand and can help the trader to gain context in this aspect.

The above tips are just tip of the iceberg and indeed volumes can be written about the many important tips for forex traders. However, the key is to start slow and steady and always look for long term gains instead of chasing the short term profits, which might seem big enough to give it a chase. In forex, people fail because either they are too greedy or do not follow a trading strategy, let alone having a goal.

This article is aimed towards beginners in forex who want to make the right start.

Weekend Forex Analysis - A strategy worth exploring

While the forex markets operate 24 hours a day, trading is at its minimal during the weekends are most of the major trading markets such as London, US, Asia are closed on the weekends. Some traders tend to make use of this slow periods in order to draft up a trading plan for the week ahead. When markets are closed, it provides a different environment, where in the trader doesn't have to do much expect to focus on the week's upcoming events and how the currencies will react in the week ahead.

In this article, we'll outline some ways on how you can conduct your weekend forex trading analysis and how it can help you out for the week ahead.

Forex Charts - Past Week's Analysis

Looking at forex charts during the past week can prove to be detrimental for traders in order to get an idea on how and where the markets are by the time the markets were closed on the weekends. Furthermore the price movements can offer a great source of information to get an idea on how the prices were moving during the previous week. Reflecting on past week's charts and also analyzing any of the trades made can provide some insights for traders and rectify any mistakes that might have been made. Various trading strategies such as forex hedging and scalping can be planned out in advance.

Forex Economic Calendar - Looking ahead

The Forex economic calender is a great way to plan the trading week ahead. Traders know that currencies tend to get very volatile during important news releases. By preparing a trading plan for the week ahead, based on the economic calendar can be a great way to build a trading strategy. Coorelating the week ahead based on previous weeks price movements can help traders to identify potential trading opportunities and prepare for any eventualities as well.

Focus on the fundamental

Forex fundamental analysis can be a great way to gain insights into the most important market movements and also the price action on the currencies in focus. Fundamental analysis can help give the trader insights into the market and thus enable traders to plan their trades accordingly. As traders know that there are many factors that influence the currency prices, fundamental analysis can help the traders to get a better economic and political idea on the countries in question which can tend to influence the currencies.

Forex weekend analysis is a great way for traders to relax and observe the forex markets without having to spend a great deal of time focusing on their trades. Weekend forex analysis should infact become one of the basic steps for traders in order to plan for the long term and also prepare for the trading week ahead.

ECN Forex broker - Price Aggregation

The Forex markets while boasting of the largest daily turnover in comparison to any business or industry is still a non centralized industry which is highly fragmented with most of the countries impementing their own regulatory frameworkds. Due to the ever increasing popularity in forex trading, new models and ways of trading come into the open just about every day.

The growth of the forex industry has been tremendous, to the point that in the last few years there has been an explosion in the growth of forex brokers, especially in the ecn forex trading niche. This growth has given rise to microscopic details such as liquidity providers, transparency in the pricing mechanisms, the feed aggregators and so on.

In ecn forex trading terminology, liquidity aggregators essentially aggregate the feeds from various liquidity providers or market participants and provides the best possible price feeds for the ecn traders.

Most ECN brokers tend to make use of a pricing aggregation engine that is fed into from the various participants that make up the broker's ECN network. By doing so, ECN brokers make up a virtual market for the traders on the buy side, where the feeds are fed in from the sell side of the market. Thus, traders, when trading with ecn brokers are able to see the best bid and ask prices and in most cases, be able to get a complete fill on their orders.

When ECN brokers offer the aggregated pricing, they are in effect reducing the costs and time involved in terms of providing the buy and sell side of the market in terms of the orders. However, there are times when the ECN broker is unable to find a matched order, which usually results in "last look" or a partial fill. Learn more about what is last look in ecn trading.

Another advantage comes from the fact that when a trader places an order, it is executed in anonimity, thus keeping the trader's trading style, strategy and other such details secure. This is one of the important points that differentiates a market maker broker, where they exactly know the trader and their trading style, thus enabling them to adjust the market maker's dealing desk trades accordingly.

True ECN Forex Broker - Do They Exist?

ECN is a Broad Term in Forex Trading Model and Can Be Often Mis-represented. So What Makes a True Ecn Forex Broker?


ECN brokers, also known as Electronic Network Communication brokers, are brokers that provide direct market access and direct pricing to traders from several different liquidity providers. This service allows traders to choose the most competitive pricing and ensures that traders' orders are dispatched directly to the liquidity provider whose price he has chosen. ECN brokers do not operate a dealing desk, and hence do not interfere with the pricing structure that obtains in this environment.

ECN brokers make their money from the variable nature of the spreads and also by charging a commission for the use of the ECN platform. In order to cover the cost of administering this environment to traders, ECN brokers usually demand a large capital outlay from the trader. It is not unusual for ECN brokers to demand as much as $50,000 as account opening balance from traders, and this is why the ECN service is mostly patronized by institutional level brokers.

ECN brokers are also known as non-dealing desk (NDD) or direct market access (DMA) brokers. ECN brokers are the direct opposite of market makers, who operate dealing desks and are known as dealing desk (DD) brokers. Dealing desk brokers provide only one source of pricing, and this comes from the broker's dealing desk. Learn about the different types of ecn brokers.

The market maker purchases the asset at a competitive price from a liquidity provider, and then sets a slightly marked-up price before sending it to the trader via the trading platform. The trader will then place the order, where it goes back to the dealing desk and is manually executed by the dealing desk operator. This situation results in the following scenarios for the trader.

Firstly, pricing is not transparent and subject to the whims and caprices of the dealing desk operator. Secondly, by purchasing and reselling the asset to the trader at a mark-up, it is the market maker who bears the impact of a winning or a losing trade from the trader. It is the market maker versus the trader. This situation puts the market maker in conflict with the trader and this manifests in some of the problems associated with trading with dealing desk brokers such as re-quotes and slippages.

Spreads are usually fixed and use of the trading platform is usually free. Brokers who offer the Currenex Classic platform operate an ECN environment, while brokers who offer the Currenex Viking platform offer the dealing desk environment. More about the different Currenex platforms. From the description given above, it is clear that the advantages of using an ECN broker far outweigh that of the market makers.

With the ECN brokers there are no re-quotes, no slippages and traders are not subject to some unwholesome practices bordering on price manipulation such as stop hunting. Many market makers are guilty of this practice and last year, the Commodities and Futures Trading Commission (CFTC) handed down hefty fines to a well known US broker over this practice. Traders using an ECN broker do not need to worry about this.

Recently, some confusion has been created by brokers claiming to provide ECN-style trading environments while still possessing many of the features that are usually associated with the dealing desk environment. Some even claim to offer ECN trading environments with a minimum account opening balance of $1,000. Many traders have been baited by this and jump in, only to discover that there is very little difference between the operations of these brokers and the dealing desk brokers.

So the question is: how can you recognize a true ECN broker? 

One way to tell if a broker is a true ECN or not is to look for whether the broker charges a commission for the use of the platform. The ECN environment requires technology solutions that are more complex: more servers, more bandwidth, etc. All this has to be paid for. If the broker claims to be an ECN brokers and does not charge a commission or provides fixed spreads, that broker is a market maker and not an ECN broker.

Re-quotes and slippages are alien to the ECN environment. If a trader experiences any of this, then he is more likely dealing with a market maker. Do you use the MetaTrader software to trade? This product is exclusively for market makers and not for ECN trading. If the broker says you can trade "ECN" with a $1,000 account balance, just know for sure that this is not the case. ECN accounts typically start from $20,000 and above.

Over the past few years as someone who has been actively involved in trading forex online and having managed to trade with market maker/fixed spread brokers the advantages of trading with an ECN forex broker truly outweighs the benefits offered by fixed spread brokers.

These above tips will help you decide what trading environment you are really on. It is not difficult to recognize an ECN broker if you know what to look out for.

Why ECN Forex trading is becoming popular

In forex trading, there are two types of brokers. Market makers or fixed spread brokers and ECN brokers. In this article, we'll take a look at the various aspects that make up the ECN forex broker and the reason why they are so advantageous for traders. Forex ECN basically got started based on the developments and innovations in the computing space and also the increase market activity and the improved internet connectivity.

The ECN forex model is built upon a a direct streaming of market activity as it happens, thus bringing the best bid and ask prices for traders who are trading on the ecn forex broker network. With an ECN forex broker model, there is a connection directly between the forex broker and the traders. This is also made up of other market participants such as institutional banks, financial brokerages, investment fund companis and so on. The biggest advantage with ECN comes from the fact that there is no need for a middleman and also the pricing offered is transparent. Unlike a market maker model where usually the market is made up by the broker who takes counter position against their client's trades.

When trading with an ecn forex broker the advantage is that due to the direct connection and because there is no middleman, the traders get to see a transparent real time market quotes along with the fact that the trades are executed instantly. Factors that have often plagued traders such as re-quotes, etc do not come into the picture here due to the ecn forex model. With an ECN forex broker, the moment you place an order, it is viewed by the seller and vice versa. The benefits being that the ecn model matches the trade orders such as buy and sell with the best possible price.

ECN forex trading is versatile in the fact that not only does it offer complete anonimity of your trades, but also direct execution. Due to the fact that the markets are always in a flux, there is an abundance of trades that are always available no matter what time of the day you trade. Unlike a fixed spread broker, ecn brokers do not hedge against your trades, meaning that there is no conflict of interest. Rather, the ecn brokers make money by charging a fee, usually known as commissions per million.

Trading with an ecn forex broker usually requires a specialized platform, therefore if traders are already accustomed to the mt4 platform, then there is a bit of a learning curve involved as there are different trading platforms that are available, such as Currenex to name one. However, due to the demand for MT4 platforms, more and more ecn forex brokers have started offering MT4 trading platforms, which is done via a MT4 bridge that connects the traders to the liquidity pool. ECN forex trading has been around for ages and was usually available for big financial trading companies.

However since the last few years we have seen a tremendous growth of ecn forex brokers that offer trading for retail and independent traders as well. If you are looking for transparency in forex then ecn forex brokers is something to be considered.

What are ECN Forex brokers

ECN Broker agents ECN stockbrokers as well as market-makers is a topic usually talked about by means of traders. To answer the particular concern what's best available for you we must study their dissimilarities and all of our investing requires. Seeing each of our ECN fx broker critique you'll receive the idea which sort is best suited for fo you actually and pick the right specialist from my number.

ECN agents permit dealers either retail price and also institutional create a real place in currencies. These people represent counterparties so that you can currency trading orders but don't indulge in growing the price. ECNs (Digital camera interaction cpa networks) join numerous market-makers, finance institutions, hedge-funds as well as person traders inside the trend you can actually view the range of sector and find the most effective price available from a given individual. Many people have the value bottles collected from each of it's people that feeds are usually relayed in stock trading software.

The advantage of trading by means of ECN-type broker agents may be the means many people make income using a person's exchanging. Most of these stockbrokers ask for resolved commissions depending on ones trade measurements and volume. Profits could be the only way authentic ECNs earn money, they just do not earn from a bid/ask variance that’s cited in their feed for the traders. Because legitimate ECNs don’t increase the risk for amount regarding traders ( space ) there’s zero amount give food to adjustment, requotes, anti-scalping tricks employed by market-makers and dealing-desk sellers. By doing this the chance to get retail price merchants are usually reduced. Notably if you certainly are a have got a scalping process your better option is to settle on the proper ECN brokerage to fit your robotic automated program.

On the subject of determing the best foreign currency set, the minimum multiply is within those people stock markets which have almost all liquidity and possess the biggest exchanging level. Little doubt these currencies include the majors EUR/USD, GBP/USD, USD/JPY in addition to USD/CHF. For the duration of dynamic trading moments multiplication in those and many various other currency exchange passes across usually solutions the particular absolutely nothing factor which makes perfect sense searching for events give the charges rivalling for top level prices for bids and will be offering as well as liquidity boosts. See also forex brokers comparison.

The greater your current capital is the better situations you could be offered. Because there are either store as well as institutional ECNs. A minimum bank account necessity so that you can invest a institutional ECN brokerage is really as excessive seeing that $50 000. Nonetheless possibly to get retail ECN is the reason for instance with all the swiss fx standard bank Dukascopy you can get superb situations, ultra-tight distribute, wonderful delivery as many big liquidity vendors will be connected as a result of their SWFX market place

 Therefore you will likely be relayed the most beneficial bid/ask value through both equally massive industry people for example banks along with hedge cash.Just like together with marketplace designers, there's also not one but two key kinds of ECNs: full price and institutional. Institutional ECNs exchange the top bid/ask from many institutional industry designers for instance banking companies, with other banks as well as organizations just like hedge resources or even huge businesses. Retail ECNs, conversely, offer you rates from your number of banks and also other traders.

How to use MT4 ECN Forex Trading

MT4 ECN Forex trading allows traders to take advantage of the MT4 trading platform in an ECN forex model. This enables traders to make use of their indicators, EA's, etc while being able to transact in the liquidity pool provided by the ECN Forex broker. Learn more and see a list of mt4 ecn brokers list.

The forex brokerage industry has evolved over the past 5 - 10 years. In fact it was only half a decade ago that we started seeing retail forex brokers arrive into the mainstream markets thus enabling the average individual trader with a plethora of services and providing them access to what was once an 'exclusive market'

The forex industry primarily started off to cater to the large institutional brokers and it wasn't possible for the average individual trader to trade OTC, or Over-The-Counter, which is not centralized made it possible for traders to access the forex markets easily.

The first generation of forex brokers are now refered as bucket shops, because the did just that. The first generation of brokers set up shop by creating their own markets. Thus the trader would in effect trade within the broker's market rather than trade on the real interbank markets (which is how ECN forex brokers work).

Over a period of time, forex has undergone changes that it is now possible for traders to trade with ECN forex brokers, who offer access to large liquidity pools. This model, also known as the ECN model wasn't quite available for individual traders until the last 3 - 4 years.

As ECN forex trading continues to gain mainstream recognition, one of the important element of focus has been the trading platform. Market maker or fixed spread brokers usually make use of the popular MT4 trading platform. Its popularity and mass appeal has made metatrader into one of the best known forex trading platforms and also managed to create an eco-system that included developing indicators, EA's, trade copiers and so on.

An ECN broker on the other hand usually made use of different forex trading platform that had a niche appeal. In order to cater to traders who are used to the Metatrader platform, we started seeing ecn forex brokers with mt4 platform being offered to traders. Of course, the way the mt4 ecn forex brokers work is a bit different to the way market makers use the mt4 platform. In ecn context, a technology known as the MT4 bridge technology is used which allows the good old mt4 platform to be connected to the liquidity pool thus allowing faster execution with no dealing desk. MT4 ecn forex brokers thus were able to access a large part of the market share which was hitherto enjoyed only by market makers.

Trading with an MT4 ecn forex broker offers traders the flexibility to trade on a platform that most, if not all traders are familiar with, and at the same time allows traders to transact in the interbank markets. This is great news for traders because they can now make use of their custom indicators, signals or even expert advisors which will help in assist their trading while on an ECN network.

To get a better idea of which ecn broker offers what, read the mt4 ecn brokers list for a complete list of ecn forex brokers that offer the MT4 trading platform in addition to their own ecn forex trading platforms. Bear in mind though that unlike small deposits that are required by regular market maker brokers, mt4 ecn brokers have a minimum requirement of $100 - $500 to start trading forex on their ecn network.