Are you a scalper? As ECN is referred to as the best trading condition for retail trading, is it a good idea to scalp in an ECN account?

Firstly, we start by examining what ECN means and what scalping entails. ECN stands for Electronic Communication Network which is a type of account that offers direct access to other participants in the market through interbank trading prices. This enables buyers and sellers in the exchange to identify a counterparty of their trading positions. Having an ECN account allows the trader to access better prices and low-cost trading conditions while also making it possible to trade efficiently.

ecn account for scalping

The electric communications network has the sole purpose of connecting buyers and sellers together to make trade executions possible. This is done by providing information about the orders being initiated and executed. Then when specific order information becomes unavailable, the network displays prices that reflect the highest bid and lowest ask currently listed on the open market.

 

Can You Use Scalping Strategy on ECN Account?

Scalping is a trading style that focuses on making profits from small changes in price. It is essentially a strategy of day trading that specializes in converting small profits into high volumes by moving in and out of positions multiple times each day. It is structured in such a way that traders buy or sell assets and then hold their trading position for a very short time before closing it for a small profit.

This is why it can be applied to many trades so that the trader can have an accumulation of small profits into something substantial. For this technique to work, the trader needs to have a higher ratio of winning trades to losing trades.

One of the most determining factors is that the trader needs to be disciplined and decisive which should translate into having a stringent exit strategy; all the many small gains that the trader has worked hard to obtain could all be wiped off with one big loss.

Therefore, it becomes imperative for the trader to have the right tools to ensure success. Some of the tools include the stamina to initiate many trades, a live feed, and a direct-access broker also known as an ECN broker. It is now clear that having an ECN account is not just good but crucial to scalping.

 

Why ECN is the Best for Scalpers

With an ECN account, scalpers (traders who scalp) will have a broker that will not work or trade against them since the broker is simply an intermediary between their buying and selling orders. Its sole function is to link them with various participants in the market. An ECN broker is also favorable because price manipulation is limited which results in increased transparency and better trading conditions.

Having an ECN account provides a scalper with ready access to the latest information in real-time along with a more precise history of prices which is crucial to scalping. This is important since scalpers are placing many trades at the same time and working with shorter time frames. The availability of a precise price history enables them to easily analyze certain prevailing trends in the market. Sometimes, this analysis of trends can be the difference between winning a set of trades or losing them.

The trading platform offered by an ECN broker shows prices from official sources, which enables scalpers to engage in immediate trading actions as well as having tighter spreads than what other types of brokers can offer. Hence, scalping in an ECN account tends to provide better access to lower fees and commissions along with instant confirmations resulting in quick market executions of trade orders and easy calculation of accumulated profits.

An ECN account also means a scalper can have access to various technical trading systems that are helpful as ECN brokers tend to have a lot of these trading systems available.

This also provides them with more opportunities to trade beyond traditional trading hours as well as being able to take advantage of the flexibility that is accessible due to wider availability. Also, having an ECN account affords those with concerns over privacy and prefer to be anonymous, especially if they are interested in initiating and executing large transactions.

Overall, an ECN account complements traders who use the scalping strategy due to its ability in providing access to real-time information and precise price histories.

 

If you are interested in trying to scalp in an ECN account, here are some recommended ECN brokers you could try.