The Forex Broker is also known as the currency trading broker and retail forex broker. In the current financial market, this means trading on commercial or retail assets for a commission. Essentially, a forex broker is no different than a salesman, except they sell financial assets instead of cars or furniture.

The role of the brokers applies primarily to commodities, equities, derivatives, real estate markets and even insurance. Before the modern era, these brokers could be reached by phone. However, in today’s trading economy, you can make traders through advanced internet Forex Brokers exchanges worldwide. You can enter in your order of traders, and then the broker will purchase or sell those forex traders on behalf of their client. Understand that these brokers often work for significant brokerages in the European Union, South America or Asia.

Forex Currency Pairs

Forex Brokers focus on trading against the global currency pairs. There are hundreds of different currency pairs operates worldwide. However, there are only a few that are exchanges on a significant scale. When selecting a currency pair, you are choosing to buy the trade in one currency with the intention that the Forex Trade will rise. That trade will then be paid out by the secondary currency. An example of this would be purchasing a Forex Trade in Euro’s and then having profits paid out in American dollars. The most popular pairs used amongst brokerages today include:

  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF

Forex Regulation

Two regulatory entities serve the trading community. These global regulators function as a watchdog, implementing new laws and guidelines that define how brokers can trade. Subsequently, this ensures that fraudulent practices are eliminated in the Forex Brokers Market. These two regulation authorities include the National Futures Association and the Commodity Futures Trading Commission.

Key Points

  • Forex Brokers – They give traders worldwide access to foreign currency exchanges through their brokerages.
  • Retail – These brokers tend to focus on retail clients, larger banking firms or institutional clients.
  • Leverage – These brokerages allow for clients to maintain trades that have substantial leverage.
  • Bid-Ask Spreads – These spreads are where the brokerages themselves turn in a profit.

Forex Brokers Summary

Forex Brokers provide essential services required for the financial market, especially for the retail foreign exchange industry. Since these new brokers began operating a few years ago, they’ve created a new trading industry that was never available to commonplace traders. Anybody who owns a computer or mobile phone that’s connected to the internet can now open an account with one of these forex exchanges, which used only to be plausible for banking institutions or large companies. Now, the common man has access to this formidable trading market.

We recommend that before creating an account, our readers review the news, research analysis and all other information about the forex market today. This will allow for new traders to make an educated trade with the help of the Forex Broker.