If you are trading with an ECN broker it is likely that you are getting to know more about the range of features these brokers typically offer. One such feature is the ECN trading hours. These commonly allow access to pre-market and after-hours trading.
Here we will take a look at exactly what this means as well as what to expect from many of the best ecn/stp forex brokers if you are thinking about extended-hours trading.
Let’s take a closer look.
Table of contents
What are the ECN Trading Hours?
The trading hours refer to the typical hours during the day where clients trade. With ECN brokers, traders can generally trade outside the traditional hours. This means that traders who can’t trade during normal hours or would like to have more options of time, get the possibility to do it.
ECN Trading Hours: An Overview
First off, you should understand the basics of ECN systems. These connect traders instantly with liquidity providers and other traders to automatically match buy and sell orders without an intermediary. This can mean greatly improved efficiency, better pricing, and more.
To get you to know all the details you should read our best ecn stp forex brokers top ten for more.
ECN brokers can facilitate both pre-market, and after-hours trading. We will look at what these terms mean in more detail below. This is only possible with ECN brokers since the orders are automatically transferred to participating ECN counterparts.
This does also mean that each ECN broker will have its own rules for extended hours trading based on who participates in their ECN network. This is something you should double-check when you are registering with an ECN broker if it is a vital aspect of trading for you.
VPS and ECN Trading Hours: Here’s how to start trading 24/7
Combining the availability of extended-hours trading with the use of a VPS could be your key to trading around the clock. A VPS is a dedicated Virtual Private Server that provides traders the ability to run trading platforms and strategies through dedicated servers on a 24/7 basis.
A VPS can also ensure that you have a highly secure trading environment alongside a high-speed connection available all the time. Many top brokers allow this tool while several even provide their own free VPS to traders.
If you are interested in learning more and feel a VPS may be for you, check our free vps forex brokers top ten right away.
Place an order when the market is closed: After Market Order
An after-market order or AFO is where you place the order when the market is closed with the intention that it will be executed once the market reopens. This can bring several positives but also some drawbacks that we will look at below.
On the positive side, it may be very convenient if you can’t or don’t want to constantly monitor the market. It is also an order that can be easily canceled or modified if anything changes, and it further allows you to set limit orders and stop losses that can be great tools in managing your risk.
On the other side, there is a risk that the spreads may change in a volatile market by the time it opens. You may also be liable for extra fees on this kind of order though you need to check with the broker. If there is no buy or sell order to match your trade it also may not be executed, or possibly at a less favorable price.
With all of these factors considered on both sides, you can then weigh up if placing an after-market order works for you.
ECN Extended Hours: advantages and risks
With extended hours you have certain risks like potential volatility, and possibly extra fees, though such an order may position you better to react quickly to news and other events. Below are a few of the pros and cons to expect from this kind of situation.
- Extended hours trades allow you to have knowledge of news and events that happened after regular hours, and in this way positions you well and with the ability to act on the market movements when others may not
- Despite possible higher volatility and lower liquidity, you can still find some excellent prices
- Extended hours trading allows for more flexibility than usual particularly for retail trading
- Liquidity and trading volume are typically lower during this period. This can bring wider spreads and increased volatility
- Extra fees may also be charged though this depends on your broker
- Pre-market and after-hours periods are not commonly used by retail traders
ECN Trading Hours – FAQs
Can you trade stocks After Hours?
It is possible to trade stocks after-hours. This will depend though on the broker you choose and may come with some limitations or fees together with the risks mentioned above. Generally, only ECN brokers offer extended hours trading, though this is continuing to evolve.
Can you hold ECN trades over weekend?
Yes, indeed you can. The Electronic Communication Network system makes it possible to hold our positions over the weekend though you should always double-check the overnight and any other fees in this case.
About the Author
Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world.
A trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.
He is a keen golfer with a very high handicap so when not helping you find the best broker for your needs, you may find him on the course or just as likely following any number of sports from the comfort of his sofa.