A lot has been said about the advantages and disadvantages of market makers and ECNs. Each has its own pros and cons. However, these reviews fail to consider that the trading style of the forex broker must be put in the equation because it is an important factor in choosing a trading platform.
ECNs are mostly useful for scalpers and order flow traders. For scalpers, they find a haven in ECNs because brokers are more forgiving to them while market makers ban scalping in their platforms. For order flow traders, they find in ECNs information which they can’t find in market makers platforms.
For order flow traders, they are interested in the number of buy/sell orders in a particular instant. They believe that if they can view which price levels have the most buy/sell orders, they can also make the same buy or sell decisions at that very instant. By taking advantage of this ECN feature, traders can take advantage of the momentum and profit from it. Traders who monitor candlestick patterns and price actions also take advantage of order flow logic.
Most big-time forex traders are already using ECNs. As such, the forex market is very liquid. A lot of market makers only allow traders to view bid/ask prices. However, with ECNs, traders can view even stop / limit orders. They can also see prices and sizes.
You see, ECNs provide traders more flexibility. I’ve been taking advantage of a recommended brokers ECN platform for quite some time now. I like the way it provides me with information which can be very useful in my trading decisions.
Learn More: http://www.fxcc.com/what-is-ecn