What is a Forex Broker?
Eddie Tobey
A Broker is an individual or firm that acts as an intermediary between buyer and seller. Forex brokers are firms that deal in foreign exchange. The foreign exchange market is quite similar to the equity markets, except that typical forex brokers do not charge a commission. However, forex brokers are required to have a license.
Forex brokers earn money from the spread (also called “pip”). The spread is the difference between the prices at which a currency is bought and sold. A pip is the smallest price increment in a currency. For example, in Euro/US Dollar (EUR/USD), a move from 0.9008 to 0.9009 is one pip. In US Dollar/Japanese Yen (USD/JPY), a move from 127.41 to 127.42 is one pip.
Forex brokers can be compared on the basis of the spread they charge. Most forex brokers publish live or delayed prices on their websites so that the investor can compare the spreads. It is, however, necessary to check if the spread is fixed or variable. Variable spreads appear small and attractive when the market is quiet, but when the market gets busy the forex broker widens the spread, meaning that the investor will gain only if the market is favorable.
Forex brokers are usually tied to large banks or lending institutions. This is because of the huge sums of money traded in the foreign exchange markets. Forex brokers are required to register with the Futures Commission Merchant (FCM), and are regulated by the Commodity Futures Trading Commission (CFTC).
A new trend among forex brokers is the emergence of online forex brokers, who offer trading facilities to “retail traders” using advanced technology. With these facilities, anyone with a computer and an Internet connection can trade in the forex markets.
About the Author
Forex Broker Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Broker Info is the sister site of Incorporating in Florida Web.
The latest information and news on Forex:
Forex: USD/JPY retreat contained by 90.15 support - NASDAQ
FXstreet.com The Forex Market
Forex: USD/JPY retreat contained by 90.15 support
NASDAQ
FXstreet.com (Barcelona) - The Dollar has dropped against the Yen European trade and pullback from 89.75/80 week-top has extended below 90.45 intra-day ...
Daily GVI Forex Forex ViewForex Hound
Daily Forex Outlook - S&...
FOREX-Dollar slips on Fed speculation; euro gains - Reuters
Boston Globe
FOREX-Dollar slips on Fed speculation; euro gains
Reuters
By Tamawa Desai LONDON, March 12 (Reuters) - The euro rose to a one-month high against the dollar on Friday as traders covered short positions and the US ...
Dollar extends falls; euro at 1-mth high vs dlrReuters
all 308 news articles...
FOREX-Dollar little changed vs majors in volatile trade - Reuters
Reuters
FOREX-Dollar little changed vs majors in volatile trade
Reuters
... and there's concern that there could be problems in Portugal, Spain, Ireland," said Michael Malpede, market analyst at Easy Forex in Chicago. ...
WORLD FOREX: Dollar Weakens Slightly On Euro After Trade DataWall Street ...
Forex: USD/CAD plunges to 1.0160, 19-month low on strong canadian employment ...
Forex: USD/CAD plunges to 1.0160, 19-month low on strong canadian employment data
Forexrazor
High-Risk Warning Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work ...
Forex: USD/CAD plunges to 1.0160, 19-month low on stro...
Japan finmin says stable forex moves desirable - Reuters
Japan finmin says stable forex moves desirable
Reuters
TOKYO, March 12 (Reuters) - Japanese Finance Minister Naoto Kan said on Friday that markets should determine specific currency levels as long as exchange ...
and more »
foreign exchange - Google News
Pound foreign exchange rates: Friday 12 March - Economy News
Reuters
Pound foreign exchange rates: Friday 12 March
Economy News
Pound Euro exchange rate is lower while Pound Dollar exchange rate is higher in morning trade in London. The GBPEUR os lower by 0.025% with 1 GBP = 1.1015 ...
WORLD FOREX: Dollar Weakens Slightly On Euro After Trade DataWall Street Journ...
Gold Has Less Luster in China - Wall Street Journal (blog)
Telegraph.co.uk
Gold Has Less Luster in China
Wall Street Journal (blog)
Now China's chief foreign-exchange regulator Yi Gang said Tuesday at a news conference during the National People's Congress that ?currently a few factors ...
China's Looking at Diversifying Foreign Exchange ReservesFor...
New finance rules add to squeeze on China NGOs - Reuters AlertNet
New finance rules add to squeeze on China NGOs
Reuters AlertNet
Regulations posted on the website of China's foreign exchange watchdog will require most overseas donations go into special foreign exchange bank accounts. ...
China tightens restrictions on NGOs: ReportZee News
NGOs in China say threat...
Foreign Exchange - Market News International
Foreign Exchange
Market News International
... plans to double US exports will threaten China's global market share, while recommending that government maintain a stable yuan exchange. ...
and more »
Dollar Falls on Speculation Yellen May Help Keep Fed Rates Low - BusinessWeek
Boston Globe
Dollar Falls on Speculation Yellen May Help Keep Fed Rates Low
BusinessWeek
?Yellen is the Fed's extended-period language personified,? said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. ...
FOREX-Dollar slips on Fed speculation; euro gainsReuters
all 30...