The foreign exchange market is one of the biggest trading markets in the world. It is completely unregulated, so there are different market makers that often have a huge impact on the prices. However, if you are a trader in the forex market, there are many things that you should know about this trading platform. Most people often enter the world of foreign exchange trading in the hope of making better trades and maximizing their profit potential. However, since this is a completely unregulated market, most people often end up incurring huge losses before exiting the market.
Here are a few important things you should know about the Electronic Communications Network Market:
Variable Spreads
In a standard forex market, the spreads are generally fixed. The bidding and asking prices are determined by the market makers. However, in an ECN market, the spreads are mostly variable. That’s because the prices are neutral and based on standard market conditions. As a result, variable spreads make it easy for people to make better trades without having to worry about market makers ruining their trading strategy.
Trading is Anonymous
One of the biggest reasons why more and more people are now opting to work with ECN brokers is because they allow you to trade in complete anonymity. ECN markets only work with neutral prices, which means there isn’t a bigger player that can have a huge impact on the market. As a result, the market prices remain neutral and only reflect standard trading conditions. The prices reflect volatility, demand and supply as well as other market conditions.
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