What is ECN (Electronic Communication Network)? - Definition & Explanation
Definition
A system that matches buy and sell orders directly between market participants.
ECN (Electronic Communication Network) Explained
An ECN matches buy and sell orders directly between participants (banks, institutions, traders) without a dealing desk. ECN brokers offer tight spreads (as low as 0.0 pips) but charge commission ($3-7 per lot).
Related Terms
Spread
The difference between the bid and ask price, representing the broker's primary cost to the trader.
Commission
A fee charged by a broker per trade, separate from the spread.
Broker
A company that provides access to the forex market for retail traders.
cTrader
A trading platform known for fast execution and advanced charting tools.