Who is a broker in the Forex market ?

Who is a broker in the Forex market?

  Brokers play an important role in Forex trading as they are the crucial link between the individual you the retail trader and the Forex market. Individual investors cannot trade in Forex directly via the inter bank market, so this is where the broker comes in.

   Brokers work to make profits for themselves by providing individual investors an opportunity to speculate in the volatile Forex market.

The primary method brokers make money is by the spread, which is the difference between the Bid and Ask price for a currency pair.

The second method a broker typically profits from is charging commissions, but this is generally specific to the type of account, and many do not have them. The actual size of the spread charged by brokers varies, so it is critical you get a broker which has both good consistent spreads and quick execution during fast markets.

Key factors to understand when looking for broker    
Since we now know who a broker is in the Forex market, lets check out.

HOW TO CHOOSE A BROKER IN THE FOREX MARKET.

Some other things to consider regarding a broker are:

The initial deposit requirement. This is highly important for new investors who wish to start with small amounts.

Spreads should be competitive and consistent, regardless of speed of the market or when you execute your trades.

The level of leverage offered by a broker and the related margin requirements also need to be considered while choosing a broker. General leverage sufficient for Forex trading is 50:1 or 100:1.

The number of currency pairs available.

Always avoid brokers who offer or guarantee extremely