A broker is an individual or a firm that acts as an intermediary between buyers and sellers in financial markets, including the forex market. In forex trading, brokers provide traders with access to the interbank market, where currencies are bought and sold.
Forex brokers offer traders a trading platform and other tools and services that allow them to execute trades, monitor market activity, and manage their accounts. Brokers earn a profit by charging a commission or a spread on each trade, or by charging other fees such as account maintenance fees or withdrawal fees.
Forex brokers can be classified into two main types: dealing desk (DD) brokers and no dealing desk (NDD) brokers. DD brokers are also known as market makers, and they set their own bid and ask prices based on their own inventory of currency. NDD brokers, on the other hand, provide traders with direct access to the interbank market, where they can access the best available bid and ask prices from multiple liquidity providers.
Choosing a reliable and trustworthy broker is an important part of forex trading, as it can affect the quality of the trading experience and the profitability of trades. Factors to consider when choosing a forex broker include regulatory compliance, reputation, trading platform, trading conditions, fees and commissions, customer support, and educational resources.