Forex or the foreign exchange market is the most important market in the world used for trading currencies. Many companies that collaborate, but do not have their headquarters in the same country use Forex as a means of exchanging money currency and make their businesses work. Many people fear about everything that involves Forex, but this is because they do not know more about it and they do not even want to learn more about it. However, as soon as you document yourself a little about this domain, everything becomes clearer.
FIX (Financial Information eXchange) API (application programming interface) for instance is a term that can cause a lot of trouble understanding it. FIX API is a protocol used for electronic communication in order to facilitate any financial information exchange, all this being done in real-time. It is used in every phase of transaction, even before and after a transaction is completed. Because it has become the most common means of communication, all market participants, including prime brokers, banks or hedge funds, use FIX either to connect to certain clients, or to trade something they need. As a result, people understood its importance and began to invest a great deal of money in order to optimize the electronic trading and to make the process of financial trading faster.
If you wonder why FIX is so important, the answer is because it is both global and standard, but it is also free. A client should start using FIX API in case he or she wants a secure platform that can help him or her maintain anonymity while trading. For this reason, if you want to remain anonymous within the trade market, to protect your privacy, you can be sure that by using this protocol everything will be in accordance with your needs.
Among those who utilize FIX API are ECN brokers too. ECN stands for electronic communication network, which is a type of network, or electronic forum that helps people in their process of trading financial products. An ECN broker provides market participants direct access to those who want to see other participants’ currency markets, and helps them find and match the best trades. The main principles of an ECN broker are never to trade against his clients and to charge a commission per every transaction, which is previously fixed for each client. There are many advantages for using ECN trading. One of them is that it is completely anonymous and because of this, traders can talk about prices that reflect reality and the real market conditions, not to mention that everything happens in real time, without having to wait too much for a trade to be completed.
Overall, the most important thing that needs to be remembered about FIX API is that it is the most commonly used protocol that facilitates electronic communications among people who want to trade financial products. As far as ECN trading is concerned, this can be best defined as a bridge that occurs between market participants and helps them trade currencies without worrying about the fact that their identity might be revealed.