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The following guest post is courtesy of freelance writer Awais Ahmed.
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Electronic Communications Broker is an individual who will help you access the communications network on which you can place your bids on auctions and sales, and get a good chance to access worthwhile deals. However, the market for brokers is a mini representation of the forex market itself; it is moving towards saturation and the number of people trying to make undue benefits out of it are increasing.
In these times, finding a true ecn broker is quite difficult if you are not aware of the aspects you need to look for. This article will help you know the ways using which you can identify proper brokers, so that your investment does not go in the wrong hands.
1. Legal Identification
As a trader who is entrusting his hard earned money to an individual you might not even meet, it is your right that the broker identifies his/her services as legally mandated by the state or the association that manages brokers in your country.
Most traders are so excited to get help in their investment prospects that they forget the need to carry out these legal checks, and this in turn causes problems because in case these brokers turn out to be fraudulent personalities, chances that your investment will amount to a sunk cost will rise.
2. Checking Different Charts
There are two charts that you will need to consult to know the bid you will be placing and the exchange rate at which the bid will be placed. One of these is the forex brokers’ chart which will be provided to you by the broker you hire, and the other will be the order chart using which you will actually decide to place your bid.
There are some traders who do not feel the need to check the order chart because the forex broker will be taking care of all the technicalities, and that can ease the process for the broker to make more money out of you by asking for a higher bid. Such a broker probably does not belong to a true ecn.
3. Your Order Limit
This is actually a proper check of the validity of the broker you are working with. The order limit is basically the number of auctions you are placing your bids on, and no such limit exists because you can invest in as many deals as your purchasing power allows you to.
A true ecn broker does not mind or care for the number of deals you invest in, because his/her only concern is the commission that will be made out of it, and the more the merrier. However, if your broker is showing a lot of opposition to your decisions or pushing you to go forward to one or two particular deals, you should be able to conclude that the broker has a considerable personal interest lying there, hence why that individual is not an ecn broker.
4. Punctuality in Updates
If you plan to use psychology over substance as your main measure of the credulity of the person you will entrust your money with, then this is the best measure of ability for you. Your broker should be the only source you should rely on to give you updated information every day, so if any broker expresses an element of surprise or not-knowingness regarding a change in the prices or the terms of the bids, that broker is probably not a true ecn broker.
If you follow these tips whenever you go for hiring a broker, there will not be many chances of you going wrong with your decision, and you can end up making a lot of amount from your present hard earned money.