Between the market and your screen,the broker stands as go-between.
An intermediary that facilitates trading between buyers and sellers in the forex market.
Brokers provide the platform, leverage, and market access that retail traders need.
In plain words
A broker is the firm through which an individual reaches a market. It provides the trading platform, quotes prices and holds the client’s account, and it either passes each order on to other institutions or takes the other side of the trade itself.
See it move
Stage 2 of 3: Broker
Why it matters
The broker’s prices, costs, method of execution and rules are the conditions a trader actually deals under. Whether and where the firm is regulated determines which protections apply to a client’s money.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A trader presses buy on one standard lot of a pair quoted at 1.1000 bid and 1.1002 ask (invented figures).
- 1The platform sends the order to the broker
- 2The broker fills it at the ask, 1.1002, from its own book or through a liquidity provider
- 3Spread cost = 2 pips × 10 = 20 US dollars, plus any commission
The trader never deals with the wider market directly: the broker is the counterparty or the route to one.
A common mistake
It is often assumed that every order is sent to an exchange. Spot forex and CFDs are traded over the counter, meaning directly between firms, and a broker may itself be the counterparty to a client’s trade.
Check yourself
Educational information, not investment advice or a recommendation to trade.