🏦 Brokers·intermediate

ECN Broker

Also called: electronic communication network

A broker that routes orders directly to a network of liquidity providers without taking the other side — no conflict of interest.

ECN stands for Electronic Communication Network. An ECN broker matches your orders directly with liquidity from banks, hedge funds, and other traders — the broker itself doesn't take the other side of your trade. Instead, they profit from a small commission per lot plus a tiny spread markup. There's no conflict of interest: the broker makes money whether you win or lose. ECN brokers typically offer raw spreads (as low as 0.0-0.2 pips on EUR/USD) plus a commission of $3-7 per round trip per standard lot. Total cost is usually lower than market maker brokers with "commission-free" wide spreads. The execution is also faster and more transparent. The trade-off is minimum deposit requirements. Most ECN brokers require $500-2000 to open an account, compared to the $10-100 minimums at market makers. For serious traders, the execution quality is worth it. For beginners, micro-lot market makers are more accessible.

Real trade example

The Candleread desk uses Genesis FX because of its true ECN routing — raw spreads under 0.3 pips on EUR/USD and guaranteed no internal order matching, which means fills are always at the best available interbank price.

Related terms

STP Broker

intermediate

A broker that routes orders straight through to liquidity providers without dealer intervention — similar to ECN but less transparent.

Market Maker Broker

intermediate

A broker that takes the other side of your trades — they profit when you lose, creating an inherent conflict of interest.

Broker

beginner

The company that gives you access to the forex market — the middleman between you and the currency you want to trade.

Spread

beginner

The difference between the buy (ask) and sell (bid) price — your cost of entering a trade.

Liquidity

intermediate

How easily you can buy or sell an asset without moving its price — high liquidity means tight spreads and instant fills.

A-Book

advanced

A broker model where client trades are routed directly to external liquidity providers — the broker just passes through orders for commission.

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