read:2023/2/24 18:49:24

    Now many domestic brokerage platforms will show an forextradingaccountstype cashback forex, so what forextradingaccountsregister the ECN model, why most will show ECN + STP model, what are the advantages of the ECN model, forex trading accounts what are the limitations?   [What is ECN?]  At present, the market model is mainly divided into MM and STP, ECN two camps  Why do you say that most will show ECN + STP model?  First understand the STP Through the straight-throughprocessingsystem-STP, let the customers order sent to the bank, according to the banks price close to the immediate transaction can be seen in this model, the customer can only accept the price, and can not set the price Then ECN it ?  ECN electronic automatic aggregation transaction model, the full name ElectronicCommunicationsNetwork he is actually an electronic trading network, a use of centralized - decentralized market structure of foreign exchange trading technology this model by working closely with banks, institutions, foreign exchange markets and technology providers to complete the traders single are directly and anonymously hanging in the The network, each single is the same status, in accordance with the price and time of the most optimal fair collocation transaction  so in a broad sense, the ECN model includes STP, but also includes DMA, MTF and other real realization of the retail single into the market or equivalent into the market trading model  so most of the domestic ECN will be a narrow sense, accurate The ECN is the ECN + STP, and we are talking today in the broad sense of the ECN mentioned below are the broad ECN model, including STP, DMA, MTF and narrow ECN 【ECN advantages】 Many people in the country do not like the MM model, but in fact the market making model on the development of the entire foreign exchange, the role played is undoubtedly huge and incalculable The ECN model has some advantages.  Talking about the domestic A-share market, from the essence of the transaction is the ECN model, that is, the transaction offer completely from both buyers and sellers, according to the principle of price priority, time priority for both sides of the single aggregation worldwide, most of the stocks, futures exchanges are taken is such a model because in such a market, the two sides of the transaction includes a large number of retail investors and institutions, sufficient liquidity, trading The subject matter is standardized, the price of the underlying transaction is appropriate, and the transaction costs are appropriate, so large-scale electronic trading can be used and foreign exchange transactions?  The main body of foreign exchange transactions are banks, investment banks, funds, multinational corporations and other institutions, the lack of retail investors, so there is a lack of liquidity, the same type of products are interest rate swaps, early stocks, etc., and therefore can not be traded through the exchange model so the MM model was born In recent years, due to the substantial improvement in the cost of electronic technology, more and more retail investors to participate in foreign exchange transactions, providing enough liquidity, so the threshold of the ECN model of foreign exchange trading has also been reduced, more and more platforms using technology such as STP, ECN the biggest advantage of the ECN model is fair because the financial trading market, is a two-party trading market, you buy and I sell, fair trade, equitable exchange and in the MM platform, as part of the liquidity provided by the platform side, and The platform itself is our trading intermediary, equivalent to it is also the referee, and athletes, there is a greater incentive to create unfavorable retail investors to create more profits for themselves, such as slipping 1 more point, they earn 1 more point and the real ECN model, because the platform is only responsible for passing the customers single, earn commission, and the customers single in a unified trading pool with other counterparties to trade, with The platform has nothing to do with it, thus reducing the unfair situation of traders and reflecting a fair and reasonable [threshold of ECN mode]  You can see that the advantages of ECN mode are very obvious, so why dont we all go for the ECN mode?  Because the ECN model is a threshold, at least 2.5 standard lots of trading volume to enter the Chicago Board of Trade trading pool and the fact that large trading pools, such as the CME, CURRENX, no a 2 lots of trading volume can not enter the  Then you will say, if I open the surplus, I do not do enough 2.5 lots, then where my single to go?  In fact you do not have enough lots of single, the pattern experienced and the ordinary MM model is the same such as 3 customers, 1200,1300,1400 respectively do more gold 1 hand, then the MM platform will pack this batch of single, in the ECN market, to 1200 price short 3 hands of gold, so the risk is completed completely hedged  Of course, here is the formal, risk-averse MM platform, and in fact, in the case of sufficient own funds, not more than the risk control exposure, MM platform, ECN platform, will not even take your these small single to the market hedge, but to their own funds and you bet, who let people rich can sit on the banker?   [ECN platform condition analysis]   favorable conditions:   1) low spreads, foreign exchange net cost 0.5-1 points, gold 0.20.3 USD net cost, that is, MM platform spreads rebate, ECN platform spreads + handling fees   2) fair trading, the best embodiment of positive and negative slippage will be equal probability of appearing 3) spreads within the pending single 4) trading speed is extremely fast ECN platform, due to their respective trading conduction mechanism is not the same, are using self-developed software, such as Swissquotes AdvancedTrader, TWS, LMAX web version, etc. But this has the advantage of direct conduction data, making the transaction data Extremely fast transfer to the trading pool to complete the transaction while some ECN use MT4 platform, will actually be limited by the performance of the MT4 software and lose the spread and trading speed advantage However, these developed independent trading platform is really not good disadvantages:  1) high cost of positions leveraged transactions, ECN platform for customers to hold positions in accordance with the financing funds directly LIBOR + a percentage calculation, for example, short AUD one hand, is directly in accordance with LIBOR, 3% annual interest rate loaned to 10W AUD, the daily interest rate of 3%/365 * 100000, about $ 7 per (actually about $ 10 a hand, part of the ECN platform will then add a financing interest can make the position a day with a cost of $ 20-30 2) the use of Own development software, software is more difficult to use 3) occasional lack of liquidity Because the ECN model is a real trading market, so it will be affected by the lack of liquidity, and lead to the single was directly skipped, such as the announcement of major data, the price clearly crossed your price level, but the single was not triggered, because the liquidity is not enough la, someone hanging price higher than you, hanging The price is higher than you, hanging earlier than you, according to the price priority, time priority, your single can not be executed 4) deposit fees more funds to bear, access to the best foreign accounts About slippage:  Many traders feel that the ECN platform will not slip, or slippage less In fact, the ECN platform as well as slippage, and because of the liquidity fairness The slippage may be more powerful than MM platform, but also may be better than MM platform situation 【Summary】 For ordinary traders, choose some good and famous MM on it Suitable for doing ECN mode, mainly intra-day, short term traders, long term futures traders, larger capital and have overseas accounts When you can continue to profit, have a larger capital, you can There are larger funds, you can choose to open a Hong Kong bank account, open a LMAX, Rexxon and other platform accounts, increase the capital for long-term operations