Electronic Communication Network (ECN) has become a popular form of technology that revolutionized the way of foreign exchange trading. It can be defined as an inner connection between small trading markets and tier-1 liquidity providers that takes place through an ECN broker. Its model enables traders to enter the interbank market and utilizes market execution. This means your order will be filled in the interbank market, but there may be a discrepancy between the execution price and the price you requested when placing your order.
According to FxOpen website, this brokerage is is an ECN broker that centers around a unique form of technology created especially for margin trading in Forex. Entities typically involved with ECN include private investors, large businesses who contribute their services to OTC Forex (over-the-counter) market, centralized exchanges, and banks. Clients of this brokerage can benefit from institutional liquidity and fast order execution that is error-free. Professional traders who engage in scalping as their major form of trading are allowed to become clients of FxOpen.
Those who participate in the ECN model:
- Have equal rights when executing orders.
- Make transactions in an environment that is completely transparent.
- Can act as either liquidity receivers or liquidity providers.
Clients of FxOpen ECN are offered aggregated liquidity from numerous parties that participate in the Forex market, enabling them to easily and quickly execute orders of large volumes. FxOpen practices an updated approach to aggregating liquidity in the foreign exchange industry. With their premium technology, market participants are provided with:
- ECN liquidity.
- Tight spreads.
- Fast execution that is free of errors.
- Market depth display.
- The ability to act as a liquidity provider.
Note: Most traders didn’t know what the difference of ECN and Market Maker brokers was. Therefore, brokers were not used to explain whether they were ECN or market maker. Now that most traders know about this topic and are interested in ECN accounts, most broker claim that they are ECN, whereas this is not true. Therefore, if you want to sign up for a live account with a broker, don’t trust them just because they say they are ECN. They have to prove it through handling your orders, the spread they offer, commission and… . Just test the water when you open a live account with a broker and if you see they have lied, withdraw your money and close your account. FxOpen is not an exception.
Read this: 6 Ways Forex Brokers Cheat You
Their Business Model
FxOpen aims to offer a variety of trading accounts to its clients such as STP, Micro, ECN along with demo accounts with no limits. Also, they intend to optimize the capabilities of traders who use Myfxbook and Zulutrade trading systems. By providing PAMM technology, novice traders can benefit from the same strategies that professional traders use. Islamic traders are also encouraged to trade as they can benefit from Forex trading and not violate the Sharia law, assuming they use SWAP free accounts.
Clients of this brokerage firm get real-time quotes from the industry’s biggest liquidity providers. Likewise, FxOpen promises ultimate customer support in addition to strict compliance with all trading terms and conditions. Also, state-of-the-art technology based dependability is another feature that FxOpen prides itself on.
Note: Swap free accounts, micro accounts and… are all signals indicating that a broker is not a true ECN/STP that routes the order to the real currency market liquidity providers. The reason is that there is no professional and strong liquidity provider that offers swap free positions and micro lots (0.01 lots).
FxOpen History In Brief
In 2003, FxOpen began as an educational center. In 2005, it became a Forex brokerage service, that has striven to make Forex trading more professional, secure, and easily accessible. Because this firm was created by a small group of traders, its main incentive is to focus on the interests of traders as a whole. Over the years, FxOpen has dramatically improved as an educational center and to this day, it continues to grow quickly.
As an educational center, FxOpen provided courses in financial markets and the field of technical analysis. After becoming a brokerage service, it progressed to meet the increasing needs of fair and transparent trading conditions in addition to superb customer service. In 2006, it became the first Forex broker to offer swap-free Sharia compliant accounts as well as micro accounts.
Note: Offering swap free account is possible only on a market maker system or through a market maker broker as a liquidity provider.
Three years later (2009), FxOpen added the MT4 trading platform combined with the 0.1 lot minimum and PAMM technology to its services. At that time, it earned the awards of Best Forex Broker of 2009 as well as Best Middle East and Asia Broker of 2009.
During 2010, FxOpen decreased the minimum spread on ECN accounts down to 0. It also launched its FxOpen Partnership Program along with the FxOpen Client Support System. The World Finance magazine listed this firm as one of the top 100 companies. That same year, it received the Falcon Award as The Best Trading Platform.
Note: A true ECN/STP broker cannot have any control on spread. They can add markups to the spread that increase the spread or cause price slippage, but they cannot lower the spread. It is only the market maker brokers who are able to offer even zero spread, because everything is under their control. They are the market.
In 2013 and 2014, FxOpen added several more features to its services as:
- One-click trading and level2 plugin giving the MT4 platform better order management. Speedy orders can be process, especially when the markets are volatile, all with a single mouse click. Because the market is five levels deep, you can readily determine the volume of liquidity for any currency pair.
- The opening of the London office and its website: www.fxopen.co.uk.
- Ticketing via the Customer Support portal.
- STP accounts with ECN liquidity, requiring an initial deposit at $100 minimum.
- Verifications, confirmations, and notifications via SMS.
- As a mutual effort, FxOpen and ForexCup create the regional Forex trading championships as China Championship, Asia Championship, and Russia Championship.
- More payment options including withdrawals to credit and debit cards, local bank transfers, Yandex Dengi, OneCard, Dengi Online, Netbanx Asia, and Neteller.
- Crypto accounts that enable retail and corporate B2B clients to obtain price feed.
- Two factor authentication between Google Authentication in MyFxOpen Trader’s Personal Area and SMS.
Many new traders are novices or perhaps, beginners. If you’re trading for the first time and are leery of putting your own hard earned cash at risk, you may want to consider a demo account through FxOpen. Trading via a demo account mimics real live trading, except your money is not at stake. As you do, you can experiment with new and different trading styles and strategies. FxOpen regards demo accounts as part of their educational resources.
Opening one is fast and easy and takes less than a minute. Best of all, no sensitive financial information or special documents are required. Simply fill out a brief registration form and you’re on your way.
Platforms FxOpen Uses
MetaTrader4 – More than 90% of all Forex trades are executed via MT4. However, in 2009, FxOpen was the very first brokerage firm to offer it to its traders while granting them direct access to interbank liquidity in addition to use of the MT4 terminal. This platform’s regular capabilities have been expanded through FxOpen’s proprietary revolutionary solution also termed as Liquidity Aggregator. Hence, FxOpen ECN claims to offer instant order execution that is purely error-free. Best of all, its transactions are processed at the lowest prices from over ten banks and other liquidity providers.
Note: These are what FxOpen claims. We are not confirming them.
Keep in mind, if you prefer to use STP and Micro accounts, you will need a different version of MT4: one other than that used for ECN accounts. Hence, it is crucial that you download the correct version to ensure compatibility with your type of trading.
Platforms offered by FxOpen include:
Mobile platforms – You can take complete control via trading with a smartphone, tablet PC, iOS, WinMobile, or Android. This ensures that no matter where you are, you can depend on these apps being available on the go.
With the mobile Forex trading apps, you can:
- Utilize charts that are interactive.
- Analyze trends on the market via technical indicators.
- Put through market and pending orders.
- Obtain push notifications as relevant events happen.
- Review detailed accounts and statements of your account balance and open trades you placed.
FxOpen Trading Tools
Naturally, an in-depth comprehension of the Forex market is imperative. Likewise, successful trades necessitate precision, promptness, and transparency, along with a competent level of risk management. Also, margin, pip value, SWAPs, and ECN commission calculated accurately will ensure optimal planning of your trades, anticipated profits, and optimized lot sizes. Supposedly, you’ll have more time to concentrate on market analysis while routine calculations are done for you. This includes the one-click trading and level-2 plugin as mentioned earlier.
With the margin and pip calculation tool, you can simply calculate margin and pip value prior to opening a trade. Likewise, it will help you determine the optimal leverage for your trades. As a result, you can minimize your likelihood of encountering a loss and stop out. Calculations are made according to real time quotes as well as your account’s leverage and equity. If any of your parameters change, you can automatically make recalculations within seconds.
By using the Currency Rates and Conversions Calculator, you can obtain exact conversion rates with FxOpen’s multi-currency accounts. This is essential when switching between several accounts, each with different base currencies. Likewise, you can look up historical rates based on a date you choose.
Additionally, you can utilize their user-friendly Commission Calculator to obtain fast and accurate ECN commissions. It enables you to find half-turn or round-turn calculations for any currency pair or metal along with any lot size.
FxOpen offers additional perks as:
- Cryptocurrency trading via using Peercoin, Namecoin, Litecoin, or Bitcoin.
- A variety of trading accounts that are appropriate for traders of all experience levels and investments such as Micro, Crypto, ECN, and STP.
- Maximum leverage as high as 1:500.
- Account statements generated daily and monthly.
- The most up-to-date economic news, Forex calendar, and expert market analyses.
- Numerous quick and dependable payment options.
- FxOpen help
- A large network of representatives and offices.