For a long time, many people have been sceptical and judgey when it comes to forex trading and the forex marketing. With time, the trade has grown more popular as more people have started investing their money in this sector. The current turnover from forex is slightly more than 5 trillion dollars, which makes it one of the most leading liquid markets in the financial world. One of the main reasons there is a great turnover and popularity gain in the financial market is because of the dedicated work of the forex brokers.
Who are forex brokers?
Forex brokers are firms that work to provide the traders or consumers with a platform where they can purchase and sell currencies. Forex brokers are known as forex retailers or retail forex brokers and they control just a small part of the forex market. They provide a 24 hour market which means you can do the currency exchange at any time of the day. Most of them also provide a platform for major world currencies that include; AUD/USD, EUR/USD, USD/CHF, USD/JPY, EUR/GBP, and GBP/USD.
Basically, they make it real easy for people around the world to access the market. By definition, a forex broker is a company or entity whose main work is to connect the basic retail foreign exchange trader to the forex market. This is because the retail traders hold a very tiny portion of the forex market. It makes it impossible to trade as individuals, which is why brokers provide larger markets for such people.
What are the main roles of the forex broker?
Educating the trader
Besides acting as the link between the market and trader, the forex broker can provide trading education to the trader. Most forex brokers provide plenty of information on when and how to trade so that their clientele can maximise their profits.
The information is very helpful especially for people who are new to forex trading. It can help you learn great things that you would never have without the platform of the broker. The brokers give every client a demo account which they can use to practice how to trade. This is a great way if you are new to the game and offers you a chance to learn without using any money.
The trading on your behalf
In some platforms, the broker offers to trade on behalf of the retailers. This mostly happens when the broker has links to major players in the forex market. So every time the broker and players are trading, an agreed percentage of the retailer’s money is invested. The retailer then gets a proportion of the proceeds from the trades. This increases your chances of you as he retailer to make more profit as the players have been in the game for a long time and can make a better judgment when compared to you.
This is just one of the methods some brokers use to connect with the retail trader. Different brokers offer different services depending on several factors. There are multiple was toy can make profits in the forex market without having to make moves in the trade.