3. Electronic communications Network Brokers (ECN) This is third type of broker and we already have talked about it. Compared to DD and STP – you will easily can recognize an ECN. In fact, ECN is a real broker as he has to be. This is some kind of mini-exchange that shows part of the overall forex market. ECN gives you the ability to place your order onto the market, and to see it. Trading with an ECN has a great advantage – it allows you to see the orders queue both on the sell side and on the buy side and their volume, so that you can see market depth, trading volumes of this ECN and so on. Major income of ECN is just spread – if current spread on EUR/USD is 0.5 pip – ECN will show you, say, 1 pip. Or it could be charged as a commission, very much like exchange one. As a result, we can say that this kind of broker will give the spread that could be different depending on member’s orders and ECN itself. Initial quotes could come from large broker or bank (s) who are major members of this ECN. Orders execution should be automatic without re-quoting, since you see all orders by yourself. You can see market depth. Pipruit: Wow, I like this way. Probably I will try to become a client of some ECN, say Dukascopy. Commander in Pips: : Hm, in this case you have to know, that since ECN is rather large substance it usually a member of real inter-bank market. Since ECN as a rule links to some large bank, you should have at least 50K-100K of assets to start trading at larger ECNs and your trading lots also should be pretty large. Pipruit: Oh, I didn’t know it. Looks like I have to postpone this idea. P.S. This lesson was written by Sive Morten, who has been working for a large European Bank since April of 2000, and is currently a supervisor of the bank's risk assessment department. Sive's knowledge of forex market and banking industry is vast and quite complete. If you have any specific questions about forex, banking industry, or any other financial instruments, please post them on the next page and Sive should answer soon. Note: FPA ranks are earned in the battles against scam, not in the classroom.