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What do forex brokers rely on to make money?
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lavis_book

Member Since Jul 09, 2019  34 posts lavis_book Jul 13 2019 at 06:18
A forex broker has the responsibility of carrying out trade on behalf of his client trader. He does the job of executing the buy and sell orders for the trader concerned. Forex brokers normally operate in an OTC (over-the-counter) market so that very less rules and regulations are binding on them and they can work according to their will.

Now, how does the forex broker make money? These brokers charge their clients a basic commission for each trade or spread. Broker’s spread is basically the gap between the ask and the bid price of the transaction. There is no bondage on the broker to charge either a commission or a spread. He can, at anytime, charge both of them from the client.

There may be a possibility that some traders offer to work on commission-free basis for clients. But this is basically a way to fool the traders, as such forex brokers earn their revenue by widening the gap between their bid and ask prices.

Kenkatzia

Member Since Dec 27, 2018  17 posts Kenkatzia Jul 21 2019 at 15:11
In return for executing buy or sell orders, the forex broker will charge a commission per trade or a spread. That is how forex brokers make their money. A spread is a difference between the bid price and the ask price for the trade. ... A broker could also charge both a commission and a spread on a trade.

AniLorak

Member Since Apr 18, 2017  864 posts AniLorak Jul 23 2019 at 15:28
Kenkatzia posted:
In return for executing buy or sell orders, the forex broker will charge a commission per trade or a spread. That is how forex brokers make their money. A spread is a difference between the bid price and the ask price for the trade. ... A broker could also charge both a commission and a spread on a trade.


Yes; that’s the general way of money making by Fx brokers! But market maker brokers do trade against the traders!

AmDiab

Member Since Apr 18, 2017  652 posts AmDiab Jul 23 2019 at 16:25
lavis_book posted:
A forex broker has the responsibility of carrying out trade on behalf of his client trader. He does the job of executing the buy and sell orders for the trader concerned. Forex brokers normally operate in an OTC (over-the-counter) market so that very less rules and regulations are binding on them and they can work according to their will.

Now, how does the forex broker make money? These brokers charge their clients a basic commission for each trade or spread. Broker’s spread is basically the gap between the ask and the bid price of the transaction. There is no bondage on the broker to charge either a commission or a spread. He can, at anytime, charge both of them from the client.

There may be a possibility that some traders offer to work on commission-free basis for clients. But this is basically a way to fool the traders, as such forex brokers earn their revenue by widening the gap between their bid and ask prices.


Buddy; there have so many new traders here who are interested to know; how traders make consistent money from this market! Brokers make money here quite easily; but for the traders it’s too challenging!

Fearlesswalker

Member Since Jul 26, 2019  19 posts Kelvin (Fearlesswalker) Aug 31 2019 at 19:45
They do rely on your transactions in reality, see my point ? So I do hope it will make wonders here no matter what. I really should understand that from the start and I would select much better broker that way, I hope you will follow my advice as well.

AniLorak

Member Since Apr 18, 2017  864 posts AniLorak Aug 31 2019 at 19:56
Fearlesswalker posted:
They do rely on your transactions in reality, see my point ? So I do hope it will make wonders here no matter what. I really should understand that from the start and I would select much better broker that way, I hope you will follow my advice as well.


You are correct & I think; your better broker means, regulated & good service provider broker’s; isn’t?

Wrathdragon

Member Since Nov 15, 2019  15 posts Wrathdragon Feb 03 at 19:38
Your commisions, and I assume on that thing which is called leverage for something like that. I do not really want it to be seen honestly. Can you please make it possible anyway? That's why I am completely switching to the stock market soon.

finnishpension

Member Since Sep 09, 2019  11 posts finnishpension Feb 04 at 14:57
Brokers reply on people who are unhappy with their financial situation and have an addictive personality type

Johannes92563

Member Since Feb 11, 2020  6 posts Johannes92563 Feb 26 at 11:22
willtradr posted:
  Forex Brokers earn money through various sources like :
    • They charge commission or fees,some of them hidden too per trade or spread.
    • Payment Processing commission- Online brokers deduct this fees only when you deposit or withdraw money.
    • Leverage- So many brokers offer high leverage. For example 1:100 leverage,it multiplies your trading volume but with this a broker can probably make a commission by widening the spreads or trades.

I agree with you

SofieAndreasen

Member Since Jul 23, 2020  56 posts SofieAndreasen Aug 28 at 00:38
Broker’s authentic way to make money from spread and commission. However, scam broker steal traders fund.

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