ECN stands for Electronic Communication Network. It means that broker is connected straight to interbanking system. All of the orders are passed easily into the market, so you are really trading at the real forex market.

ECN broker will show real quotes from live market as he has no potential business of changing the prices, requoting or holding on your positions.

It’s easy to spot differences between the Market Maker Broker and ECN broker. ECN will charge you commission for all trades. Also spread with ECN broker is different then with market maker. Most of the time natural spread at the market (for EUR/USD) is about 1 pip (comparing to 1-3 pips with Market Maker) and it’s fluctuating. It is natural that spread is changing as in one moment there is perfect balance between the buyers and sellers (then we see exactly ‘0’ or ‘none’ spread) and few milliseconds after, there are more buyers and there is bigger difference between bid and ask.

There are also moments, when the market is in great imbalance because of news publication. Then we can expect bigger differences between buy and sell levels as the market is in turmoil. You have to be careful as ECN brokers do not guarantee fix spreads as Market Maker does.

There is also caution from my side. ECN brokers are quite new service as we are talking about last 1-2 years where you can find ECN to open as small accounts as 500 USD. Before that you could start ECN account from 10 000 USD or more. Right now many Market Maker brokers are switching into ECN and many new brokers are offering ECN trades. Some of them has also other instruments to trade that are not ECN at the moment. ECN accounts at the moment are mostly about currencies, and there are many more contracted instruments like commodities or indices that are usually traded at futures exchange. But futures are whole different instruments traded at regular exchanges, so what some broker does, is they call themselves ECN broker and show you currencies with ECN quotation and Market Maker quotes for other instruments.