What is a Broker in FOREX? What do they do?

What is a Broker in FOREX? What do they do?

What is a Broker in FOREX? What do they do? When it comes to online commerce, the BROKERS are the best option for those beginning investors of the matter, because these are assets of easy understanding and management, which sooner or later originate profits of high volatility.

A BROKER is the person or a company that helps us organises the transactions that are made between a buyer and a certain seller, and through this process, earn a commission once the transaction is made.

The main objective of a broker is to gather buyers and sellers so that they can negotiate among themselves and analyse the conditions of the currency market in order to earn income when exchanging the currency pair that is being operated.

The best form of FOREX speculation is done with the help of a good “BROKER” or mediator who has his knowledge in the area. To start trading in the currency market, the first thing to do is creating an account with a “BROKER” (if it is recommended, its better) and makes the first deposit.

Another great contribution that BROKERS offer us is to generate information about the currency market, what are the prices, products, and current conditions that the market presents.

A BROKER can represent either the seller (90% of all cases) or the buyer (10% of the time) but not both at the same time. Currently, brokers represent a vital part of the buying-selling process in the currency market; thanks to them we can obtain the best financial services.

A BROKER will only limit himself to the search of the best prices and conditions for his clients and his work will be finalised once there is an agreement between the buyer and the seller of the assets, after that, it proceeds to receive the established commission.

ADVANTAGES OF HIRING A BROKER

  1. In the first place we could say that these people (or companies) have already established an extensive relationship with the foreign exchange market, that is, they know the market and know what they are doing, making us have easy access and understanding of the processes carried out for the purchase/sale of the currencies.
  2. We can reach the base of our capital due to the knowledge, tools, and resources that they possess.
  3. In some cases, we can find BROKERS that have signatures with banking entities or financial institutions that could help us to have greater access to resources.
  4. They tend to be inexpensive. We can find companies that offer us to open accounts with low capital and only charge small commissions.

It is very important that, before opening an account with a BROKER and start investing in what we want. We must investigate which are the best options that the market offers us and choose the one that meets all the conditions and has a good adaptation to the Contractor needs.

TYPES OF CORRIDORS IN FOREX

When we start in this world (FOREX) as completely independent operators, we can choose among countless brokers (from illegal to internationally recognised ones).

  1. Market makers: they are the most used because the processes are simple; we can make small deposits and provide us with benefits such as online support.
  2. Market Makers: Unlike the previous ones, they require high capital if they want to operate.
  3. NON-MARKET MAKERS. This type of broker is used by banks or financial institutes because they allow easy and direct access to the interbank market.
  4. SPREAD-BETTERS: These brokers charge a differential income between the two exchanged coins. They negotiate products such as stocks, indexes, and commodities. Currently, these types of brokers are not legal in some countries.

BROKERAGE FIRM

What is a Broker in FOREX? What do they do? They are financial institutions that allow us to make the purchase-sale of the assets. The brokerage firms help those companies or investors that provide foreign exchange, raw materials and, among others, through electronic platforms.

Normally, these firms offer a quality, complete and serious service to all their clients, where they promise to investigate with responsibility the markets that they consider appropriate for the exchange of the established products. In some cases, investments can be made on credit, where the conditions are established by both parties.

Once the signature is made, the BROKER goes out in search of the current values of the market and tries to find the buyers/sellers for the clients with whom he has agreed.

COMMISSIONS

The commissions that will be received are established in advance between the contracting party and the BROKER. These commissions can be fixed or flexible; everything will depend on how many operations are carried out and how much money will be negotiated.

A good broker is defined by his capacity in the field, the technical tools he uses, the quality of service he offers, the speed of his answers and the trust he acquires for each transaction he makes.

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