How do Forex Brokers earn money?


Private, 1st Class
I always thought it was mostly from commissions and spreads too, but there are a lot of shady brokers out there manipulating trades.


Private, 1st Class
At first, I know the broker gets earn because they giving service for the trader as a bridge among trader and the market, but in practice, often trader become a victim by the broker that applies cheating business in an illegal way. Choose a reputable broker is essential here.
Hello, I am new to trading, what is the role of the foreign exchange broker ?


Private, 1st Class
In forex trading and in the most recent version it had been simplified so that traders only have to predict the market trend and add in some cash. If they predict correctly they make profit and if they do not when they lose all the money. That is where the brokers get their profit.
By the sounds of everything on fpa and reviews I have come to my own conclusion.

How do brokers make money?

1: By you, the retail trader losing money.

2: By falsely claiming to be ECN/STP providers to suck clients in that end up losing because they can manipulate things ensuring they are profitable at your expense.

3: By providing 1:500 leverage knowing most clients will blow accounts up, thus generating money. Professional institutional traders dont trade more than 1-2 standard lots per $100,000 capital, thus trade unleveraged or very minimal. Theres a reason for this. 1:500? lol

4: By hunting stop losses ensuring they earn money off price that for you the trader spiked for an unknown reason.

5: By not paying client profits due to x y z reason. The best one i heard of on here was a user didn't get paid due to trading fake prices. Prices the platform allowed him to click buy/sell on. I mean how stupid do brokers think people are? Theres no button in mt4 that lets you select prices that dont exist lmao.


They earn money by lying, scamming, fraudulent activity, misleading clients and so on to make themselves profitable at your expense.

The funny part is, if you run a pyramid scheme you will be prosecuted and shut down for it. I mean real pyramids (not MLM's). Eg: I call you up, tell you i have a way to teach you how to be a millionaire. I get 100 people on board. You all pay a small signup fee ($100 each). I just earned $10,000.

Now you come to the meeting and i tell you how to do it, you do it by teaching the same i just did and filling up a room.

This is pyramid and illegal.

Yet running a broker firm, manipulating client orders, widening spreads at your own discretion to stop clients out so they lose their capital thus directly profiting off it yourself (which is stealing) and so on that brokers do behind the smoke, lie about the type of provider you are (ecn) when you are actually a market maker and do not connect clients directly to liquidity provider and so on... this is deemed legal and ethical business.


Where does all this anger come from, did you get scammed? There are plenty of scam brokers out there, no doubt, but this is not actually how legit brokers earn money.


Spreads and commissions mainly but the other points in the OP for sure. Does a broker really want you succeeding? Not so sure. They make make money on your commission but they would make more by encouraging bad trading practice and you blowing your account. Always another piece of cannon fodder on the conveyor belt after you to sign up
Forex brokers give customers a platform where they can access the forex market. They in actual acts as a middleman between forex market and customer. Apart from just that forex brokers provide other variety of services to the customers which majorly includes the trading platforms where the trades could easily trade.

Let’s focus on a few points to know how forex brokers earn money?

Trading platforms:
So, trading platforms are the ones that connect traders to the markets and hence this is the one particular thing from which forex brokers make a lot of money. Depending on the additional and valuable services the charges increase, people often opt for tailor made packages where they can opt for the services as per their business needs because more are the features, more the customers get services to use which could even help them ending up having profitable trades.

Fees on processing payments:
Apart from spreads, there are brokers who charge a particular fee per trade also there are few who do not. So basically, once the customers do any sort of transactions which means if they perform deposits or withdrawals, a small amount of transaction fee is charged by the broker. Though the fees charged by the broker is not huge and is little but it somehow contributes to the money making.

Spread is the difference between bid and ask rate of currency pairs and spread is the major source of money making for forex brokers. In exchange for processing buy or sell orders, forex brokers do charge a fee or commission for per trade which is how they make money through spread.

In order to increase traders trading volume, brokers offer high leverages so that more capital leads to the profitable trades a trader could make even though the chance of losses also become high if traders lose the trade. Means more leverage could lead to making more money and vice versa through trades and hence brokers offer leverage as they make money through offering leverage.

Other Services:
There are many brokers who offer many additional services to their customers apart from just trading platforms, brokers offer a variety of instruments to trade on, many trading signals that help customers. Brokers also offer a customized service depending on the requirement of the business which helps them in making money.
They charge you commissions and withdrawal fees and if the broker is not regulated then they will provide you with their own prices on the pair


According to me, a broker earns money usually from spreads ( if we talk about dealing desk or B book brokers) But ECN brokers earn only from commissions. But still we as traders cant dig deep and find out all the possible sources.