Is Your Forex Broker Working for You?

People new to foreign exchange trading may be surprised to find that their forex broker may operate in some surprising ways. In fact, some companies offering forex trading services are not brokers in the traditional sense at all.

Traditionally a broker would work for you as a client, placing your buy and sell orders for you through their dealing desk and charging commission (for stock exchange transactions) or making their money from the spread (the difference between bid and ask prices) for forex trading. At one time orders would be placed by telephone. Now they are placed online, with you in full control of your account.

But standard forex accounts require significant investment. Typically the minimum deposit is anything from $10,000 to $50,000. Now that forex trading can be done from home, there are many new services springing up with lower deposit requirements, offering forex mini accounts. But their business model is not necessarily the same as traditional brokers, and this can have implications for you.

So these days, there are other types of companies that operate in different ways in order to provide services to the smaller investor. Most of these do not have dealing desks of their own.
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