What is a forex broker?

Fat Finger

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A forex broker is a company that offers people who want to trade currencies and other assets the chance to do so through their services. Forex brokers offer financial services to traders and thus they act as a portal for traders to enter and trade in the forex markets.

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Forex brokers enable their clients to trade through a platform that the broker offers. Many forex brokers offer their trading services through the famous MT4 platform, or its more recent version MT5.

Forex brokers often are connected to banks or market makers who provide liquidity and help execute the transactions for traders through the broker. Some brokers are connected to more than one bank and thus they can offer better prices, i.e. lower spreads for traders. If those brokers offer contracts for differences (CFDs) only, they don’t need a liquidity provider to execute the trades.

Some forex brokers claim that they make money only through the spreads, i.e. the difference between the selling price and the buying price of any currency pair (the difference between the bid and the ask). Others make money through both the spreads and by charging commissions on transactions. Forex brokers can also make money by charging fees on deposits, withdrawals, and even inactivity fees in some cases.

To establish some degree of trust with clients, forex brokers should obtain proper licensing from the competent regulator in the jurisdiction they work in. The regulator usually performs regular audits on licensed brokers, to ensure they are following the regulations, such as separating clients’ funds from their operational funds.

It is usually the client’s responsibility to check that their broker of choice is licensed. It's worth noting that a significant number of brokers are either under-regulated or completely unregulated. This does not necessarily mean that the company is bad, however, it significantly limits the options of the trader in case of the conflict.
 
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Can anyone explain what is a forex broker?
Forex brokers are firms that provide traders with access to a platform that allows them to buy and sell foreign currencies. Transactions in this market are always between a pair of two different currencies, so forex traders either buy or sell the particular pair they want to trade.
 

Clay Davidson

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From what I know it was established that a normal person at home cannot take part in forex trading because they would have to travel to places which would be quite impossible. A broker is the middle man that does all of these for you and gets a small percentage from your trades.
 

Tahntaman

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A forex broker acts as a middle man between you and the forex market. Belive it or not you would not be able to do forex trading if there were no brokers. The brokers simplify the trading process for us so that we can do it at the comfort of our homes. Forex is complicated for us to do on our own.
 

Marceloguedes

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To put in simple terms, broker is just an intermediary between a forex trader and the forex market, giving you a platform to trade in this market.
 

Stizza

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I'm newbie, but i think that you can't do this deal alone, the entry fee is very high. Broker, with a lot of us, can enter this markets (sorry for my english)
 
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