1. Forex Broker Guide: Introduction
  2. Forex Broker Guide: Broker Basics
  3. Forex Broker Guide: Platforms And Account Details
  4. Forex Broker Guide: Broker Support
  5. Forex Broker Guide: Advanced Features
  6. Forex Broker Guide: Conclusion

As of January 2012, foreign exchange market accounts for more than $4 trillion in average traded daily value, making it the largest financial market in the world. No central marketplace exists for the forex market; rather, traders must conduct their trading activities through forex brokers. An increasing number of forex brokers are available, and traders should take the time to research, evaluate and compare options to find the broker that best fits their needs. This guide will explore the various important considerations when choosing a broker in today's competitive forex marketplace. (In this article we'll look at five considerations when choosing a forex broker. For more, see 5 Tips For Selecting A Forex Broker.)

Forex 101
What is Forex? Forex, often abbreviated FX, is the market where currencies are traded. It is the largest, most liquid financial market in the world, and trades 24 hours a day, five and a half days per week.
What are currency pairs? All forex trades involve the simultaneous buying of one currency and selling of another. In the popular currency pair EUR/USD (euro/U.S. Dollar), for example, the first currency (EUR) is called the base currency; the second (USD) is called the quote currency. When a trader buys a currency pair, he or she buys the base currency and sells the quote currency.
What are the major currency pairs? Four forex pairs are the most heavily traded in the forex market. They are called the majors and include Euro/U.S. dollar (EUR/USD); U.S. dollar/Japanese yen (USD/JPY); U.S. dollar/Swiss franc (USD/CHF); and the British pound/U.S. dollar (GBP/USD). The majors trade under the greatest volume and liquidity.
Why do forex traders need brokers? A forex broker acts as an intermediary between the two parties involved in a forex transaction: the buyer and the seller. While it is possible to buy or sell currencies directly through banks and other institutions, brokers offer services that typically benefit traders such as charting platforms, analysis tools, and access to leverage.



Forex Broker Guide: Broker Basics
Related Articles
  1. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  2. Trading

    The Pros & Cons Of A Forex Trading Career

    Trading foreign currencies can be lucrative, but there are many risks. Investopedia explores the pros and cons of forex trading as a career choice.
  3. Trading

    The Forex Market: Who Trades Currency And Why

    The forex market has a lot of unique attributes that may come as a surprise for new traders.
  4. Trading

    10 Ways To Avoid Losing Money In Forex

    When approached as a business, forex trading can be profitable and rewarding. Find out what you need to do to avoid big losses as a beginner.
  5. Trading

    Forex Trading: A Beginner's Guide

    Learn about the forex market and some beginner trading strategies to get started.
Frequently Asked Questions
  1. What Factors Cause Shifts in Aggregate Demand?

    Find out how aggregate demand is calculated in macroeconomic models. See what kinds of factors can cause the aggregate demand ...
  2. Who are Whole Foods' (WFM) main competitors?

    Learn more about Whole Foods Markets, who insists its products are sustainable. Thanks to the competition, however, its marketing ...
  3. What are the Differences Between Ex Works (EXW) and Free On Board (FOB)?

    Learn about Ex Works and Free on Board, the main difference between these Incoterms, and the responsibilities of buyers and ...
  4. What are Common Examples of Monopolistic Markets?

    Discover what causes real instances of market monopoly, how it persists and where monopoly privilege is most common in the ...
Trading Center