A forex broker is usually a financial institution that offers traders access to an automated platform for trading in foreign currencies. Forex is short for exchange. Transactions in the free marketplace are generally between a pair of currencies. A forex brokers with zar accounts can also be referred to as a commercial forex broker or a primary currency trading brokerage. The forex broker service provider has the responsibility of carrying out the trades on behalf of their clients.
Automated trading platforms are the most common way of accessing the foreign exchange market. Most providers offer several trading options, including options for CFD trading, equity derivatives, swaps, and forwards. Leverage is applied to the foreign exchange market when traders have access to greater amounts of money than they possess. This leverage enables them to take advantage of price fluctuations and gain a profit.
Automated Forex Broker applications (Auctions, Brokers, and Spread Betting) are usually designed for retail currency traders and carry out all the trading for them. Most platforms also provide indicators and tools to help the trader to work out which currencies to trade in and which ones to avoid. Some platforms allow users to set their margins which enable them to gain or lose a certain amount from the trade.
A Forex regulated dealer is one such organization. These organizations are governed by a set of guidelines, rules, and regulations, and the principal members of these associations are the banks that trade on behalf of the regulated dealers. To ensure maximum trading opportunities and transparency, these institutions have to undergo vigorous checks and trials to ensure compliance with their various policies.
A Forex liquidity provider is another type of forex broker service provider. These firms offer a higher level of liquidity than most other retail currency traders, allowing them to provide better prices and greater flexibility for their clients. The liquidity providers usually trade currencies instead of stocks and therefore have access to more international and foreign markets.
They usually have a high level of exposure to world markets as well as an established reputation for security and trust. They are not governed by any regulatory body, although many of them are members of the Financial Service Authority or FSA. Because they trade with a higher level of liquidity, they can afford to offer more flexible pricing options to their customers and they can reduce their margin requirements for larger trades.
Many small and medium-sized traders have used platforms offered by Forex liquidity providers to trade in smaller quantities than would be possible on their own. This has been useful for those who trade infrequently and whose budgets are restrictive.
It has also been good for those who need a platform with a wide range of currencies available on it but only a few dozen active customers at any given time. These users can use their Forex brokers as place builders and gradually build up a small amount of capital that they can test out new strategies and trades with.
