Forex Brokers

A foreign exchange or forex broker represents any venue that can provide traders with access to a platform, enabling the buying and selling of multiple currencies.

Forex brokers are a key component of the retail forex industry, which have grown to become a sizable and mature industry in recent years.

This includes an expansion to nearly every major jurisdiction, which in turn has been met with new regulatory oversight to police the sector.

Retail traders can rely on forex brokers for leveraged trading in a 24-hour-a-day market.

Retail forex brokers are a rather small portion of the greater forex market, when measured against the institutional sector.

Why All Forex Brokers Are Not Equal

Like any industry, forex brokers vary across the board in terms of offering, customer service, and terms.

Most commonly, differences include trading platforms, currency pairs supported, leverage, and spreads, among other attributes.

Most forex brokers outside the United States also offer contracts-for-difference (CFDs) and exposure to commodities such as precious metals.

The most commonly supported trading platforms used by forex brokers at the time of writing include MetaTrader 4 (MT4) and MetaTrader 5 (MT5).

Given growing competition in the sector and a desire for more client retention, forex brokers have also strengthened their educational offerings and customer service gains.

This has taken the shape of online portals designed to promote optimal forex trading techniques.

In addition, forex brokers now regularly offer free webinars, encyclopedias, trading tools, and other techniques have helped educate retail traders, many of which lose money trading forex historically.

Forex brokers are located around the world but are bound by their service offerings in many instances.

In many jurisdictions, these brokers require licenses from regulatory authorities to trade forex.

Over the past few years, retail brokers have dealt with a wide range of challenges that has redefined the playing field.

This includes new regulation, leverage restrictions, compliance costs, payment processing challenges, and more.