What is a Forex broker and how to start trading Forex?

What is a Forex Broker?

The advent of the personal computer (PC) and the Internet have fueled more retail traders to the market than ever before. Online trading has spread all over the world, and brokers, having discovered this opportunity, offered access to the world’s largest foreign exchange market – Forex.

Thus, a Forex broker is a link between the market and the trader. With the help of leverage, it provides traders with the opportunity to speculate on the movements of the foreign exchange market.

Today, a Forex broker is more than just a broker that provides access to the foreign exchange market. Its role has expanded with the emergence of completely new markets and their growing popularity.

From one trading account, a retail trader (individual) can trade in the gold, oil, or even cryptocurrency markets. This increases the number of strategies that can be used from the same account and makes it possible to diversify the account according to market movements.

See a list of Forex brokers

Forex broker’s trading accounts

Depending on how the Forex broker is organized, there are different types of trading accounts, and different trading conditions corresponding to them.

For example, some brokers are organized as market makers or so-called Dealing Desk. They reflect the real market and offer traders similar conditions through the trading platform. In fact, the trader deals directly only with the broker: positions are not brought to the market. In this case, most likely, this type of broker offers an account with fixed spreads and charges a commission.

Other brokers send all or only some of their client’s orders to the liquidity providers they work with. In case all transactions go through liquidity providers, the brokerage company works on the No Dealing Desk principle. If some trades are directed to liquidity providers and the rest are processed internally, the broker’s model of operation is hybrid.

Obviously, the more liquidity providers work with a broker, the better trading conditions it can offer to the client – tight spreads, low commissions, several types of trading accounts.

Trading accounts also differ depending on the broker’s business model. For example, No Dealing Desk brokers use ECN and/or STP technology.

In this case, the broker offers floating spreads that change depending on market conditions – they narrow when market volatility is insignificant or absent, and expand with the release of important economic news, or in case of low or no liquidity (for example, during the transfer of a position from one day to another (rollover)).

A significant advantage is that the broker guarantees execution when there is a market (quotes are running) and does not send requotes to the terminal with a refusal to execute.

Check out FBS’s FX Trading Account Types

How to start trading with a Forex broker?

All brokers are represented on the Internet and advertise their services to both experienced and potential clients – newcomers to Forex. To register with a broker, you just need to follow a few simple steps:

1. Fill in personal data;
2. Go through personal identification (verification);
3. Answer a few questions regarding the trading experience;
4. Replenish a trading account;
5. Download and install the trading terminal offered by the broker (often MT4, MT5, web terminal or mobile application for trading).

Sometimes it is necessary to wait from several hours to several days to get started. It mainly depends on the identity verification process and the method of funding the account.

Open FBS MT4 or MT5 FX trading accounts

How does a broker make profits?

The main source of income for a Forex broker is the spread (the difference between the bid and ask price). Each currency pair or financial instrument provided by a broker has two prices – bid and ask . Buying always occurs at the ask price, and selling at the bid price. The difference between the two is called the spread. It is very similar to the rates of buying and selling currencies in a regular bank.

In other words, suppose you bought EURUSD at 1.1030 and the quote rallied to 1.1058. The difference between the two prices is 28 pips. You used the ask price when buying. If you decide to close a trade, you must sell the same pair at a bid price that is less than 1.1058 by the amount of the spread.

The size of the spread is different for each currency pair and financial instrument. For example, the tightest spread tends to be with the most popular EURUSD currency pair, while cross pairs (i.e., those in which the US dollar does not participate) have wider spreads.

In addition to spreads, brokers also charge commissions that depend on the volume of each trade and the type of trading account. Also, some brokers may charge a withdrawal fee.

Go to FBS’s Official Website

How to start trading Forex?

Regardless of whether the currency is growing in price or becoming cheaper, there is always an opportunity to make money on Forex!
How to Trade Forex? Imagine that a country’s national currency is an asset like stocks, commodities, or precious metals. The whole secret is to buy an asset at a lower price, and then sell it at a higher price. Alternatively, you can sell at a higher price and then buy at a lower price. Regardless of whether the currency is growing in price or becoming cheaper, there is always an opportunity to make money on Forex! The main thing is to recognize the market trend correctly and in time. Analysis of economic news, as well as paid and free indicators and automated trading systems and signals, will help you with this.

• Register with FBS;
• Open a trading account;
• Verify your account;
• Download and install the Meta Trader 4 trading terminal.

Join the largest financial market and earn by trading with the big players!

Learn how to trade Forex with FBS

Example of Forex trading

Forex currencies are traded in pairs such as Euro / Dollar (EUR / USD) or British Pound and Japanese Yen (GBP / JPY). Forex trading is buying one currency and selling another at the same time. The exchange rate shows the value of one currency relative to another. For example, the quote USD / CHF 0.93160 / 0.93170 shows how many francs are needed to buy or sell one dollar.

Depending on the central bank’s discount rate, time of day, government policies, market participants’ expectations, and a variety of other reasons, exchange rates are constantly changing. For example, the forecast suggests that the Euro will rise in price against the US dollar (i.e., the EUR / USD pair is growing). You buy Euro (open a buy position on EUR / USD). And then, when the Euro rate has risen, you sell the Euro more expensive (close the position on EUR / USD). The difference between the buy and sell price is your profit from Forex trading.

Remember that Forex is a high-risk financial market. There are many opportunities to make money on it, and your potential income is not limited by anything. But the risk of losses is also high. If you make a conscious and independent decision to become a trader, then, first of all, you must follow the basic rules of money management and risk minimization. It is not easy, but extremely important. Regardless of whether you are trading hundreds of dollars or millions.

Quality training will be the foundation of your success. Take the time to learn the basics of trading and practice on a demo account before you start trading Forex with real money. And always stick to the rule never trade with funds that you are not ready to lose.

FBS MT4 and MT5 Forex platforms. Which is better?

What is Forex?

Forex (Foreign Exchange market) is an international currency exchange market, the largest financial market in the

Forex is the most accessible market for novice traders and traders with little capital.
The main market participants are commercial and central banks, large corporations and hedge funds. But you don’t have to have millions or thousands of dollars in your account! Thanks to leverage , even if you have $ 100 or $ 500, you will be able to participate in trades on a par with major market participants. Special micro and mini accounts make it possible to trade even with a $ 1 deposit!

Unlike the stock market or the futures market, Forex does not have a single trading platform, such as the trading floor of a stock exchange. Banks and other market participants are linked by electronic telecommunication networks (ECN). Trading is conducted 24 hours a day from Monday to Friday. The decentralized structure allows you to carry out transactions with the purchase and sale of currency without extra commissions. It also gives market participants access to trade at any time from anywhere in the world.

To join the Forex market, you just need:

• Computer, phone or tablet and high-speed internet.
• Trading terminal program.
• and an account with a broker company that will execute orders to buy or sell currency according to your instructions.

Start Trading Forex with FBS

8 reasons to trade Forex

High liquidity and best prices

There are always buyers and sellers in Forex, the market is constantly in motion. Working on the ECN model, the broker will provide you with the best prices from the largest banks, ECN platforms and other liquidity providers. It is beneficial for a broker to provide you with the best prices and minimum spread.

Access to trading 24/5 from anywhere in the world

The market trades around the clock from Monday to Friday. The broker provides you with support 24 hours a day. You choose the time for trading – European, American and Asian trading sessions replace each other. And the greatest liquidity is present in the market during those hours when trading sessions in different time zones coincide.

Even with $ 100, you can trade

Unlike other financial markets, Forex is characterized by low deposits and small position sizes. Thanks to margin trading and leverage, you will be able to operate with amounts several tens of times greater than the size of your account deposit.

The broker is interested in your success

Thanks to the ECN model, you trade directly with other market participants. If there is an opposite order at the desired price and sufficient volume, the transaction is executed. And the broker receives a commission for “flattening” your orders. With this approach, your broker does NOT trade against you and does not make money on your losses, but is directly interested in you trading successfully and in large volumes.

There is always an opportunity to make money

The stock market could crash and stocks could devalue. But in Forex, if one currency falls in value, the other inevitably rises. And you can make money on it.

Easy to follow analytics

There are only 4 major currency pairs in the Forex market. You can choose one or more pairs to specialize in. Monitoring news and analyzing 4 pairs is much easier than monitoring thousands of stock names.

Training for beginners

The broker provides training demo accounts, courses and seminars, videos, news, charts and analysis so you can hone your trading skills.

Automatic trading

You don’t have to sit in front of a monitor around the clock and watch the market. Automatic indicators and signals will inform you in time about important events or trend changes. You can also use Expert Advisors developed on the basis of your own or someone else’s proven strategy. The advisor will trade automatically, without your participation.

Open FBS’s Forex Account

Trade with FBS – an ECN and STP broker

The FBS is popular with retail traders for its reputation (more than 10 years on the market), regulation (FCA licenses, ASIC, membership in the Financial Commission), excellent trading conditions and is rightfully considered one of the best brokers in the industry. Regardless of experience and trading skills, each trader will be able to choose the most suitable account type for himself: Micro, ECN, STP, Crypto, Demo, etc.

Go to FBS’s Official Website