Slippage with ECN brokers?

Beginner Questions
#1

Hi,

I have been reading a book on Forex trading by Anna Coulling called “Forex for beginners”.

Its a pretty good book, though I’m completely new to forex so can’t say how useful the advice will be for actual trading until I start doing it.

Anyhow, in the section on how to choose a broker (page 149 to be precise), it says that one of the advantages of an ECN broker is no slippage.

I always thought there was no guarantee against slippage so was surprised to read this.

Just wanted some other thoughts that could corroborate this (or not)?

Thanks!

#2

A True STP Broker that offers ECN spreads, will always be subject to positive or negative slippage when markets become volatile before huge news releases. spreads widen and slippage occurs.

For news traders out there it makes sense to get a flat unchanging spread from a broker.
Real markets have variable spreads that change every second. In order to accommodate a flat spread

You would be participating in an artificial market created by the broker. Thus you would no longer be a part of the “real market”

brokers that offer such services are Market Makers. Some Market Makers offer a choice with being a part of the ECN environment or having a flat spread, others are exclusively Market Makers and others are exclusively STP.
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