What is a broker? Why do you need one and which one is the best for you?

Abdulmajidkhs

Well-known member
What is a broker? Why do you need one and which one is the best for you?

  As a trader, it is almost impossible to trade or enter the market without a broker. Forex transactions which usually take place in the billions of dollars all happen through banks and financial institutions. Without big funds, you cannot play with the big boys. Hence why we retail traders need a broker to act as our intermediary between us and these financial institutions, as well as afford us more buying or selling power. But with that being said you need to familiarize yourself with different types of brokers that are out there and the ones which are best suited to you.

  To find the best broker for you it‘s best you first search through WikiFx. This app allows you to find the best-regulated brokers as well as shows you which brokers to clearly avoid. Finding a broker can lead you down some scan brokers who will happily take your money. So don’t walk through a minefield blindfolded. Trust WikiFx.

  There are different types of brokers out there but there are two you should be most concerned about. There are desk dealing brokers (DD), and direct market access brokers (DMA).

  DD brokers are also known as the market makers and act as the intermediaries between you and financial institutions. They buy up large positions from liquidity providers and sell these positions in chunks which are then affordable to traders. They essentially take the other side of your trade. The benefit of such a system is that you get

  · No commissions on a trader

  · Low entry barriers

  · Fixed spreads

  · Fast trade execution

  The disadvantage of such a broker are

  · They take the opposite of your trading position, meaning they are incentivized to make you lose

  · They are able to manipulate the market as they are market makers

  DMA brokers are given direct access to the interbank Forex market. At this point, the pricing and entry of your trades are then done by the banks as opposed to the broker as the banks act as the liquidity provider. The benefits of such a broker are

  · There is little manipulation of the marker by a brokers

  The disadvantages are

  · Each trade the broker will charge a commission as that is where their profits lie

  · The barriers of entry are much higher as you will need a lot more cash to get involved in the markets this way.

  As a trader, it may seem the DD brokers may best serve us but be careful as once again these guys make their money by your losing trades. So they need you to lose and some brokers have done some shady things in the name of making you lose. Because they are the liquidity providers for you they might not be so keen to pay up when you withdraw profits as well. There are many cases of traders being swindled out of their money due to this financial structure. But then again you may not have big amounts of liquidity to gain direct market access to the bank. And the other issue is that with DMA brokers is that the speed of transactions may be slower due to the fact that your trade has to go through the broker to the FX interbank.

  So the best choice would be a DD broker but it is about finding the right one. Butnlike a said before your best bet is looking to look at your broker using WikiFx. This app aids you in finding the best-rated brokers with the best reviews. They have connected the regulatory boards throughout the world so they can guarantee that if your broker commits any misconduct, they will be put right back into line. Trust me, these guys can save you a lot of Hustle and grief, so give them a try. You are going to need to find a broker in any case so best you go with them


What is a broker? Why do you need one and which one is the best for you?
 
There are advantages and disadvantages of the broker, however, all traders need a broker to work trading in the forex market, without a broker maybe retail traders will face difficulties joining in forex trading market because of the high minimum contract to buy one lot.
 
The Forex broker is an intermediary body that acts as a middleman between retail traders and the forex market or the interbank system, in which major banks trade with each other. A forex broker equips forex traders with an advanced trading platform, tools and other financial services.

The broker you choose can affect your trading experience. When you decide to open a forex account, a major consideration is to choose among the different types of forex brokers to handle your forex transactions. The choice you make will impact the quality of service you receive, transaction fees and spreads.

Choosing a regulated forex broker is a major decision in your trading journey, as your broker is considered your trading partner. The term regulated signifies that the broker’s financial activities are monitored and supervised by financial regulators, whose primary goal is to prevent fraud and significant risks in the forex market. Regulated Forex brokers ensure that the privacy of their clients is protected and that the information disclosed is accurate. Read the AximTrade review to find out the benefits of trading with a regulated forex broker.
 
The broker I trade with (coinexx) falls under the category of DMA brokers, and yes, they do charge a commission of $1/lot, but minimum requirement to start trading is only $10, plus the spreads are generally low.
 
Using Hugosway myself I find the spreads tight minimum is $50 to get started not the lowest but still affordable by most retail standards . May not be the cheapest but certainly reliable for me
 
Very informative, I think a lot of new traders don't realize the difference or spend the time looking at enough brokers. Choosing a good one with low fees is certainly one of the most important first steps one needs to take to be successful. I opened a CedarFX account and haven't had any troubles, but one of my old friends actually went with some popup DMA broker and it didn't work out well for him. I tried to warn him. :eek:
 
I'm using deltafx. this broker provide account's with fix spread and guranty the stop-loss and take profit by providing no slippage account and clinet can copy the professional trades in their account by using pro trader system in deltafx.
 
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