It works as an intermediary between its clients and the foreign exchange market. It is also known as a retail forex broker. It is defined as an entity or financial services company that provides easy access to forex trading. They do trade of currencies on behalf of their customers to earn profit from their customers’ investments. Thereare four types of brokers mentioned below.
1. Forex Broker
2. Stock Broker
3. Full-service Broker
4. Discount Broker
All of these mentioned brokers serve different purposes. The underlying assets are of many types through which trading takes place. In the case of the forex market, currencies work as an underlying asset. Customers speculate on the price of underlying assets and make investments accordingly. If the price of the assets increased they make a profit and if the price decreased they lose the amount. The forex market works on speculating the price of currencies throughout the world and makes a profit from it.
How does it work?
To get involved in the forex trade, one needs a forex account to carry out all the purchases and selling. Forex brokers provide all the facilities from opening an account to running the account for trading purposes. They earn a profit by handling your account and providing you with the facilities for the best experience of trading. There are varieties of options to choose from while searching for brokers and the online presence of brokers made it easier and more accessible.
Investment in the forex market is considered to be risky until you are not skilled enough in this field. A forex broker provides you with skill development planning and education about the forex market. The benefits of multiple services under a single entity are also a reason for such companies growing tremendously over the years.