What is Forex? You might be asking. It’s the world’s largest market, with more than $5 trillion traded every day! So what does that mean for you? Well, it means if you’re looking to trade on this global stage, you should know a few things about the types of brokers.
Types Of Brokers
The different types of forex brokers are the best way to break down what kind of broker you’re dealing with. Knowing these can help determine if they have your best interests in mind like RoboForex or just want to take advantage of you for their own profits, so you must understand each type before beginning trading. Here are some brief descriptions on each one:
- Direct Broker
A direct broker gives traders access to several financial instruments directly from its platform without any middlemen involved. This means better prices and more control over the transaction process.
However, this comes at an expense because there will be higher fees since there isn’t anyone else between them and you taking money out.
- Introducing Broker (IB)
An introducing broker is a person who brings two parties together to make a transaction.
They can be an individual or even another company, but their job is to bring traders and brokers together to make purchases (or sales) easier.
- Multi-Dealer Broker (MDB)
This type of forex broker will act as both IB’s and direct brokers in many cases, giving them access to multiple dealers while also providing you with better prices than other types since they’re not paying out commissions like most traditional banks do.
Some MDB’s are able to offer lower spreads because they work directly with market makers that manage liquidity within the financial markets, which means less price fluctuation on your end when trading.
- Market Maker/ Electronic Trading
A market maker is a type of broker that provides liquidity to the financial markets. They’re able to do this by matching buyers and sellers while also taking special orders from other brokers to make more profits for themselves.
The Bottom Line
These are just some brief descriptions on each one so you can get an idea of what it means when someone says they use a certain type of forex broker like tickmill or another term related to trading. Each has its pros and cons depending on your needs as a trader, which should be considered before deciding upon anything else since there’s no one size fits all situation here.
