Forex trading is an activity that has become more and more poplar in the past years, since it does not involve too much effort and provides fast results. Forex, also known as FX or “currency market” is the foreign exchange market, an environment where international currencies are traded. If you have never had anything to do with the financial domain, you may not be aware of the fact that currencies play an important role for people all over the world, as well as for international economy. In order for international businesses and transactions to be possible, exchanging currencies is mandatory: in case you have a company in France, for example (and you are normally use euros), and you want to start collaborating with a US firm (where the dollar is officially used), both parties involved will have to decide upon a common system of money that is to be used. If you want to have a safe trading activity, you need to work with a professional broker, such as FX-EDGE. Forex trading is not necessary only when it comes to the corporate sector, but also when travelling: if you want to visit another country, you have to be prepared to use their currency.
Taking into consideration the evolution of technology, Forex trading has developed a lot and nowadays it uses particular tools. For this reason, ECN trading is now a common method to trade currencies. The abbreviation stands for Electronic Communication Network, a way that has streamlined a lot the exchange market of the past years. ECN forex is basically the bridge between international traders, reuniting under the same “umbrella” small market participants and liquidity providers, by the means of a specialized broker. Of course, the entire connection is possible due to advanced technologies and pieces of software. One the one hand, Forex ECN is the process through which the broker gets liquidity from top liquidity providers (mostly major banks) and offers it to clients, so that they can trade any currency they need. On the other hand, the broker facilitates the supply and demand relation between clients and liquidity providers, who need to execute traders’ orders. Needless to say, brokers benefit from each transaction, since they charge a commission fee. As a consequence, the larger the trading volume generated by clients, the higher the brokers’ profitability.
The ECN forex market is formed of many trading aspects, including not only exchanging, but also buying and selling currencies, depending on the current exchange rate. There are plenty of variables to take into consideration when it comes to forex trading, so regardless the sum you are working with, the best thing you can do is collaborate with a dedicated broker. Since any type of international transaction has to be done after exchanging currencies, in terms of volume of trading, the forex market is by far the largest in the world. Given this fact, there are plenty of brokers and online platforms that can help you access foreign liquidity.