Forex Broker is a party, can be a company, institution, agency, or individual which stands to bring together between the seller and the buyer. Then what the product are traded? Surely be forex = foreign exchange = currency countries.
In the activities of trade between countries, happen currency exchange. And these exchanges already underway since economic relations between countries begin to mutually bound to each other. So arguably this forex broker that there's been since ancient times. See the development of inter connections between country's economy increasingly massive, as well as see the forex exchange market, forex brokers are certainly more and more now in the world.
Why do we need a forex broker?
In fact forex trading activity is dominated by the large central banks around the world. With most of the portion on the major currencies such as the US, Euro, Yen, and Pound. Well in order to make transactions with the banks/institutions that enormous, for us traders (small scale) are not allowed. In addition we must have relations, also there is a minimum limit of transactions.
Well, this is where forex brokers took the role of the retail broker, will be set up so that every individual could enable traders to do forex trading. So the broker will forward requests from trader to broker a larger, and so on so that later every request could be accommodated traders in the forex market is huge and massive.
What forex broker benefits?
Surely every broker has different rules, in charge for their services. No reply from attractive fee/Commission each lot no reply just from the difference in/spread between buy/sell. In this yg and generally now used a broker is of the spread. Usually about 2-3 pips for the major currencies (US, Euro, Yen, pounds, yack yg or traded), and could be more sd 5 Pips for secondary currency. From about 3 Pips that is certainly not all is the net profit of the broker, there are operational costs, the cost of the fee to the larger brokers, Commission fees to agents, etc.
Online Forex Broker
The era before there was an internet trader using the old model of communication for each transaction to the broker. That is with the phone, but now it's been advanced times (no internet) trader can direct more real time in doing forex trading. With advanced applications special (metatrader) trader can do monitor price, execution generally much more quickly and in real time. In addition traders also comes with a variety of tools for analysis, access news, chat/discussion, etc.
Supported internet connection yg more quickly, then practically almost all brokers in this world should facilitate trading online so as not to be left the trader and not outdated.
With this online forex trading, then ease for traders is very much. In addition can be done anywhere, can also be carried out whenever the trader wants.
Regulation, and the legality of a Forex Broker
The problem that then arises is how to choose a right forex broker between hundreds of online forex broker. When the first is still a bit off course we would not want to choose a broker imaginable, but now it's not. Surely the brokers there is definitely is good and not good. There is a nice working professionally, and consuming funds from their own clients. This we need to understand that we were not wrong in choosing a broker. So we need to be careful and do not easily tempted by lucrative promotional/bonus offered by many online forex brokers on the internet.
One of the antecedent could help us in looking broker is by finding out info about regulation/regulator wrote adhered to by the broker. Broker should follow the principle and rules imaginable in the regulator wrote him follow.
This generally is the regulator body/institution financial official under the rule of a country. The more good this regulator then wrote a rule followed by the broker will be more strict. Brokers cannot operate with a standard that is inconsequential, or permit its operation could be revoked and are sanctioned by regulators.
Surely we must also know the regulators-regulators wrote in which country? among them: NFA (American), FSA (United Kingdom), FSC (Mauritius), and many more.
Various Types Of Brokers
Generally traders no matter, and it is not possible to know how brokers manage each transaction from the influent clients. We'll just have them only. Regulation broker which unclear as well as offer spreads and seductive bonuses tend to get into the type of airport where every transaction will be countered by the broker. Well with brokers like this there is a danger, because there is a possibility the broker is lost, and eventually went bankrupt. We recommend that you choose a broker type of STP/Non-Dealing, where every transaction will be forwarded to the bank or broker larger.
What is Forex Broker?
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Renvin Nelwan
