ECN’s represent the future of Forex trading for the retail and institutional community as the demands of the modern day trader exceed that of the traditional market maker, single LP (liquidity provider) model. Today’s forex traders demand tight spreads, deep liquidity, price transparency and anonymity in execution, low slippage and last but definitely not least, low latency. Meeting all of these demands is no easy feat, especially when every forex trader has different needs in terms of price and execution.
ECN technology gives the broker the ability to aggregate its LPs, building an order book and providing a best bid best offer to its clients. The collective volumes of the broker’s clients encourage price competition amongst the LPs and provide the leverage to demand better execution. In doing this the ECN model enables the efficient flow of liquidity between price markers and price takers, meeting the needs of clients to provide the best environment for the modern day trader.