A broker is a term that emerged from the old french. A broker is a person who is the point of contact for the buyer and the seller. A broker does trading on behalf of their clients for commissions. A broker can be thought of as a person who promotes the owning of financial assets.
Brokers often work in fields like insurance and real estate markets. This is something we know of, even if we do not believe in trading. Due to the internet, it is very easy for us to find a broker online as well. The internet has made it more convenient and easy to get accessed to such services over the phone. Clients just have to dial to trade, and brokers buy and sell assets on their behalf in a percentage-based commission.
The Internet has opened several ways of trading. Most brokers provide certain services where the client can access accounts and trade through their respective electronic platforms and computer devices.
Retail forex is about trading through dealers who are small or are individual investors. These firms are popularly known as “retail aggregators.” During the 90s retail forex brokers and dealers started with their business by providing a platform to those small traders who wanted to get into the market, who were being limited by large-scale companies and institutions.
Retail brokers have allowed the small trader to trade by setting up their account with a limited amount of assets that they own, and provided a virtual platform to do internet-based trading. Forex trading is now popular between individuals, as this has offered them a chance to trade in their available resources. The internet has also elevated the reach of forex broker services to many people. The internet has made such services easy to access.
Are brokers dealers too?
They acted as dealers too. They often work for the other side to provide liquidity. The brokerages were able to retail services by uniting many small traders through the internet by offering private accounts to online investors. Retail forex traders can only have access to the market only through brokers. they have two modalities of trading.
1- by acting as a dealing desk where brokers act as dealers or act from other sides of the trading position. Traders pay large spreads on average in such kinds of trades.
2- the other type is no dealing desk service. Traders have access to the inter dealer market. This allows for their easy service on their terms. They are exposed to variable spreads depending on the market .
Brokers offer other services too, such as :
- Information research and news feed service regarding the forex trading market
- Accurate Asset price charting
- Professional management of accounts