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.
