Who are Forex brokers, and what role they play in trade in the foreign exchange market?
With the development of modern Internet communications became available Forex trading for the majority of private traders and investors. If earlier to trade in the currency markets could only favorites (large corporations, banks and owners of large fortunes), but now almost everyone can afford to trade on the Forex. You do not need to make huge investments have enough in the account 500 - 1 000 dollars for a comfortable trade. To gain access to the currency market, you need to open an account with a Forex broker who is the intermediary between you and the currency market. Before you start trading Forex, you need to understand who the Forex brokers and what they do.
What are the Forex brokers?
Thus, Forex brokers - is natural or legal persons who act as an intermediary between the trader and the foreign exchange market. By law, an individual can not directly conclude the sales transaction on the foreign exchange market. All trades will be executed directly through the Forex broker or as it is called, dealing center, whose activities are carried out on the basis of licenses and Regulated by various state bodies and public organizations. To start trading you have to register online broker to open an account and fund it with a credit card or e-wallet. Access to the foreign exchange market through the trading platform, which can be downloaded on the website dealing center. Forex Brokers use different platforms, but the most popular of them is MetaTrader 4. With it, you will be able to trade, to develop their own strategies to carry out graphic analysis, used in trading technical indicators and automated trading systems.
What additional functions are performed by Forex broker
In addition to trading operations, as well as of trading instruments such as currency pairs, precious metals and CFD contracts, best forex broker also provide the following functions:
- Economic news;
- Calendar of important economic events;
- the latest forecasts by leading analysts;
- useful information for beginners;
- Free indicators and expert advisors.
How to earn a broker?
We can not also touch upon such important topics as trading brokers. For the provision of intermediary services in providing access to the currency markets Forex brokers charge a commission as a spread. Every time you open a new deal, you'll see how it is automatically added to the spread, which can be floating (0.1 points) and fixed (2-3 points). More information can be found in the specifications of the contracts with your broker. Many brokers at the expense of attracting new clients reduce the size of the spread, which is extremely beneficial to the private traders.
In the market you can find various models of brokerage firms:
- "Kitchen". These companies are dealing centers and market makers who earn less on spreads on deposits as its clients. "Kitchen" is not accessing the interbank foreign exchange market, as do reliable broker, so the money all traders remain within the company. This lucrative trade trader turns into a loss for the dealing center. In this case, market makers are doing everything possible to "survive" a profitable trader from their company: degrade the execution of orders, substitute market prices on their own, delaying withdrawals or even refuse to pay;
- Brokers and banks. The main difference from the brokers dealing centers is that they realize immediate conclusion of transactions on the interbank market through liquidity providers, which include investment funds, banks and larger brokers. As a result, the trader receives the following benefits:
- orders are executed at a high speed without re-quotes;
- slip can be both unprofitable and profitable;
- trader gets the best price and the minimum spread;
- maintain complete anonymity at the time of the trade;
- trader can see their own and others order in a glass applications.
As a reliable broker is only an intermediary between traders and liquidity providers, the Trades traders are not losses of the company, so the broker does not enter into conflict with them and quickly displays earned profit. On the contrary, the more the trader will open trades, the more you earn the broker regardless of profitability or unprofitability of completed trade deals. There are also brokers with a banking license. Despite the more stringent requirements to the size of the minimum deposit and withdrawal method, the banks can be attributed to the most reliable and trusted broker kompaniyam.Nekotorye brokers instead spread may charge a flat fee for the total volume of transactions. This can be very convenient for those traders who open a large number of transactions per day.
How to choose a reliable broker?
If you do not want to get into a situation where dealing center refuses to pay you honestly earned cash you need with great care in choosing a broker, then you will save both time and money. When choosing a broker is usually recommended to pay attention to his age, reputation in the market, as well as the presence of positive reviews on the internet. But that is not all. Choosing a broker is also dependent on the style of your trade, as there are highly specialized brokers for scalping, hedging, trading advisors and so on. D. Take the right decision will help our broker rating Forex, in which all brokers are classified in such important criteria such as the size of the spread, availability of licenses and other important security features broker.