💼 What is a Forex Broker
A Forex broker acts as an intermediary between traders and market liquidity. A Forex broker may execute buy and sell orders on behalf of clients, charging either a trading spread, a predefined commission, or both.
Forex Broker General Categories
Forex brokers are categorized into two main types based on how they execute orders: Dealing Desk (DD) brokers and No Dealing Desk (NDD) brokers.
(1) Dealing Desk Brokers (DD) or Market Makers
■ Market Makers
Market Maker Forex brokers take the opposite side of their clients' trades. They typically offer fixed spreads and usually do not charge trading commissions. This type of broker is often considered ideal for Forex beginners.
🔗 More: » Market Makers / CFD Brokers Directory
(2) No Dealing Desk Brokers (NDD)
No Dealing Desk brokers are further classified as ECN or STP Forex brokers.
■ ECN Forex Broker
An ECN Forex broker provides clients with direct access to the global Forex market. ECN brokers offer variable spreads and may also charge trading commissions. They are considered the most competitive type of Forex broker.
🔗 More: » What is ECN Forex Trading | » ECN / STP Forex Brokers Directory
■ STP Forex Broker
An STP Forex broker routes clients' orders directly to liquidity providers. STP brokers may offer fixed spreads and sometimes charge trading commissions as well.
General Related Terms
What is Forex Margin
Forex margin is the minimum amount required by a Forex broker to open a trade.
What is a Forex Margin Account
A Forex margin account is the account that holds the deposited funds used for trading.
What is a Forex Margin Call
A margin call occurs when a Forex broker requests additional funds from a trader to maintain open positions.
What is a Forex Dealer
Forex dealers are individuals or firms who trade on their own account and assume their own risk, unlike Forex brokers who execute trades on behalf of clients.
What is Spread
In Forex, the spread refers to the difference between the buying (bid) and selling (ask) prices of a currency pair.
What is a CFD (Contract for Difference)
A contract for difference is a financial derivative that allows speculation on the price movement of currencies, stocks, indices, commodities, and other financial instruments.
What is a Forward Contract
A forward contract, also called a forward, is a non-standardized agreement between two parties to buy or sell an asset at a specified future date for a price agreed upon today.
🔗 COMPARE: » Forex Brokers Online | » Forex Bonus
🔗 Read More: » What is a Forex Account | » What are Forex Signals | » What is ECN Forex Trading | » Forex Trading Orders | » What is Forex Scalping | » What is Forex Bonus | » What is Forex Rebate
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What is a Forex Broker
