Focusing on the “ECN” Forex offered by Atiora broker

August 4, 2016

Atiora's ECN system explained.

Focusing on the “ECN” Forex offered by Atiora broker

What is ECN?

  • Atiora operates as a full ECN broker which stands for Electronic Communication Network.
  • The electronic system totally eliminates the role of a third party in the execution of orders, connecting brokers with individual traders so that you can trade directly without having to go through a middle man.
  • The totally transparent trading environment means high speed instant execution with no dealing desk intervention or price manipulation.
  • All clients obtain the same access to liquid markets and trades executed directly from Atiora’s deep pool of liquidity providers.
  • Foreign currencies, CFD’s or commodities can all be traded on the Atiora platforms.

What makes ECN favourable?

  • ECN is far more transparent than the traditional broker model because it eliminates conflict of interest between client and broker dealing desks.
  • As an ECN Forex broker isn’t setting prices, there is no market making, just a flow of prices from liquidity providers to traders.
  • The model guarantees that all clients are equal, with instant access to prices.
  • Atiora ensures that the clients trade at optimum prices and this makes their spreads some of the lowest in the industry.

What do they do to ensure low spreads?

  • For a start, they have a very deep pool of liquidity providers. This gives them a head start as the sheer volume of liquidity they have coming into their system means better opportunities for clients to trade and better execution at their required price levels.
  • The second key component of their system is the aggregation engine they run before displaying prices for their clients to trade.
  • The Atiora aggregation engine collects all the prices from their various liquidity providers and compares the various bid and ask prices on offer for any particular instrument. The system then automatically displays the best combination of Bid/Ask price for the particular instrument for their clients to trade on.

atiora ecn aggregation example photo

The diagram above shows a typical aggregation example in EURUSD. As the banks in their pool of liquidity providers send their bid and ask prices for the currency pair to Atiora, these are automatically scanned for the highest available BID price and the lowest available ASK price.

In this case, Bank D has the best Bid price and Bank B has the best Ask price. Taken individually, the pair pricing from Bank B gives a spread of 0.6 pip and the pair pricing from Bank D gives a spread of 0.5 pip.

Once their price aggregation engine does its magic, the resulting price for the pair is 1.26094 on the Bid and 1.26096 on the Ask for a spread of 0.2 pip.

Combining the various Bid/Ask quotes for the EURUSD in the example results in a spread, their clients can trade on an offer which is much lower than those on offer from individual banks.

The Atiora system also ensures complete client anonymity meaning a secure trading environment. Orders to and from the markets originate from Atiora. their liquidity providers and clients only ever see the Atiora system.

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