🏦 Brokers·beginner

Broker

The company that gives you access to the forex market — the middleman between you and the currency you want to trade.

A forex broker is the platform that lets you place trades in the currency market. You don't actually trade directly with other retail traders — you trade with (or through) your broker. They provide price quotes, execute orders, handle margin, and give you access to leverage. Brokers come in two main types. Market makers (or "dealers") take the other side of your trade and quote their own prices — they profit when you lose. ECN/STP brokers pass your orders straight through to liquidity providers (big banks) and only profit from spreads and commissions — they don't care whether you win or lose. Pros prefer ECN/STP. Choosing a broker matters more than most beginners realize. A bad broker with slow fills, wide spreads, or dirty withdrawal practices can eat your profits even with a perfect strategy. A good broker is worth paying a slightly wider spread for.

Real trade example

Traders who had accounts at Alpari UK in Jan 2015 got their funds frozen for months after the CHF shock put the broker into insolvency. Broker choice IS risk management.

Related terms

ECN Broker

intermediate

A broker that routes orders directly to a network of liquidity providers without taking the other side — no conflict of interest.

STP Broker

intermediate

A broker that routes orders straight through to liquidity providers without dealer intervention — similar to ECN but less transparent.

Spread

beginner

The difference between the buy (ask) and sell (bid) price — your cost of entering a trade.

Leverage

beginner

Borrowed money from your broker that lets you control a large position with a small deposit.

Broker Regulation

beginner

The government or industry body that oversees a broker and enforces rules on capital requirements, disclosures, and client protection.

CFTC (Commodity Futures Trading Commission)

beginner

The US government regulator for futures, options, and forex — enforces strict rules on retail forex brokers operating in the US.

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