A few weeks ago I covered the FXOpen’s ECN platform and was a bit skeptical because I had experienced problems with my Windows XP software (unrelated) and because I questioned who the liquidity providers were for execution.
A few days ago I received a personal tour and had a chance to review the company’s technology as well to see how the liquidity is provided (can’t say who the liquidity provider is for now, but it’s big, very big).
Being the skeptic that I am, it takes me a while to getting fully convinced that what I’m seeing is the next step in Forex trading evolution. But this time it might be the case.
Instead of making brokers waste time and money on its useless regulation requirements, the NFA should have made the most important step of them all: requiring all brokers to shift to ECN trading which would have solved any and all transparency issues with Forex trading.
As I explained in one of my posts earlier: ECN trading is basically a Forex marketplace where Buyers and Sellers can enter orders and trade with each other rather than trading with their brokerage firm or being routed to the market.
And now back to FXOpen’s platform.
FXOpen managed to utilize MT4 and to display an ECN feed and market depth details, while executing orders according to this feed directly on the market. Unlike most brokers, this totally removes the dealing desk. This must have cost a lot of time and money, and is definitely a Forex industry revolution.
Currently, when you trade MT4, the feed you see is what you get and most of the time you never know what is behind the displayed quotes. With FXOpen’s ECN platform you now get to see exactly what is behind the currency pair’s Bid and Ask: you actually get to see the five best Bid and five best Ask orders in the market, real time.
This is also called Level 2 market depth (or orders book). Demo users will see one level of market depth which shows only the first best Bid and Ask prices and offered amounts.
When I tested it using Market Orders, the execution was fast and effective and orders were filled at a better rate than I selected. This solution is also pro-scalpers and pro-EAs offering the first effective way for successful traders to take profits without any question marks or strange interests involved.
You can choose between Market Order which will be filled according the best prices in the market at that time or select a Limit Order which will only fill at the exact price you indicated.
Market Order:
Stop Order:
Overall, this is a very important step in the Forex software evolution. With MT5’s launch expected only a year from now and no plans for ECN features announced in it, there is now only one real alternative for people who would like to trade ECN using MT4.
FXOpen’s software provides a solid solution for both beginners and experts in Forex trading and truly eliminates all the question marks there were regarding the Forex market. FXOpen’s software doesn’t take side against traders but only offers access to the Forex marketplace. Whether you win or lose doesn’t concern the ECN broker, the exact opposite of the Market Makers who profit from your losses.
I couldn’t extract any statement from FXOpen’s execs but I suspect that launching their own MT4 ECN platform is not the end of the story and that soon they might start offering it as a stand alone solution to other brokers or White Labels.
Moreover, I got a chance to see some of FXOpen’s statements and was pleasantly surprised to have found that this is not a small broker by any rate. FXOpen’s monthly volume average is around $55B which puts it above several known and popular brokers and is a sign of confidence by traders.
Looks like they have acces to the Swiss Forex Marketplace since they offer trading in the exact same pairs. anyway, it is an excellent source of liquidity and offers very competitive spreads. This makes FXOpen a very interesting alternative to some of the more well known brokers out there.
Way to go Fxopen!