Forex Brokers, provide currency traders access to a trading platform that allows them to buy and sell foreign currencies. They handle a very small portion of the volume of the overall foreign exchange market.
They work to achieve the best for their clients, as Forex Brokers play the role of intermediates between banks providing the service of a financial intermediary for a commission.
Within the market we could find two kinds of brokers, an Electronic Clearing Network and Dealing Desk and also known as market maker brokers.
Firstly, in dealing desk broker, the dealer usually takes the opposite position to your trade, they search for other suitable options with your order, and in case they don’t find any suitable orders the y will open an opposite position to your trade. These brokers usually make money from the spread and do not charge more fees besides this spread.
The electronic Communications Network known as ECN matches the orders electronically; these brokers do not open an opposite position to your trade if your orders don’t match with others. Therefore, your trade would not be executed immediately when you have placed. ECN brokers charge commissions for each side of trading.
Commissions and spreads are the principal income of Forex Brokers, some brokers’ offers low or tight spreads and others offer variable spreads, fixed spreads high trading commissions and others. Usually the biggest the account size the lower the amount of spread in pips as brokers get higher commissions due to the volume.
For small accounts some brokers offer low or tight spreads, these kinds of brokers are popular for small traders with a small initial deposit.
In reference to customer service, Forex Brokers offer different methods of service: Email, telephone, fax, live chat, etc. It is essential to have a broker who meets your needs. Good support is very important as you will need to face any possible issue with prompt response.
Forex brokers need to comply with your needs to be the best partner for you, take into account all the characteristics you need in a broker before making any investment, a good Forex broker will provide you with personal and friendly service with high competitive service at all the times.