Forex brokers are specialized companies whose main activity is the provision of intermediary services on international market currencies In particular, they act as intermediaries between retail clients and financial institutions. Brokers in the Forex market are key figures. They provide private traders with the opportunity to have access to trading on the foreign exchange market. Forex brokerage companies act as a link between banks and traders.

Forex broker functions

We will try to answer the question of what the activities of Forex brokers are and what functions they perform. First of all, it is worth noting that it is thanks to them that clients have access to a trading platform that allows them to enter currency market and carry out trading operations. The trading platform is the main tool of any trader. Using it, you can open and close trading positions and, in addition, receive the most current currency quotes and monitor the movement of their value.

Secondly, Forex brokerage companies provide clients with leverage, thanks to which traders can operate in the market with amounts significantly exceeding their deposit. That is, with only 100 USD on the account, with a leverage of 1:100, a trader can make transactions for amounts up to 10,000 USD. But at the same time, it is necessary to remember that margin trading is associated with risks - after all, with an increase in leverage, not only the trader’s potential profit increases, but also his possible losses.

It is also worth noting that currently almost all largest forex brokers provide their clients with access to analytical information, which makes it much easier to predict price behavior for any currency.

How does a Forex broker make money?

How do Forex brokers make money? This is another one of the most pressing questions asked by most new traders. Like everyone else commercial organizations The main goal of Forex brokers is to make a profit.

One of the main sources of income for a brokerage company is the commission imposed on each transaction concluded by a trader. It can be imposed in two different ways: as a small addition to the spread, or as a direct charge for each transaction performed. In addition, it is worth noting that any honest broker (if it is not a Forex kitchen) is very interested in traders working with them for as long as possible, since he continues to earn as long as his clients work and earn money.

Regulation of the Forex broker

Russian legislation exercises virtually no control over the activities of brokers. Besides, government bodies in fact, they do not regulate or license their activities in any way, since they do not have any objective data on the volume of transactions performed.

Largest Forex brokers

Approximately a third of the total turnover of the forex market in Russia falls on the share of three or four large companies servicing most of the most active Russian traders. It is worth noting that investors who are engaged in such activities professionally prefer to cooperate with brokers who represent foreign brands, as they provide better security and offer clients the most complete information transparency.

All possible risks can be minimized if you follow one very simple rule: turn to the services of Forex brokerage companies that occupy one of the leading positions in the foreign exchange market in terms of the total number of active traders. It is worth noting that the value of this indicator is, as a rule, directly proportional to such the most important indicators, such as reputation, trading conditions and reliability.

According to the rating of Forex brokers, currently the largest and, as a result, the most popular are the following Forex brokers:

Alpari is one of the world's largest brokers, uniting more than half a million traders in 160 countries. Alpari has offices in 20 countries.

Forex Club is also one of the largest brokers. Most popular in the CIS countries, the European Union, China, the USA and Brazil. It is also worth noting that the Forex club provides the opportunity to maintain NDD accounts, which allow you to withdraw completed transactions to external counterparties.

TeleTrade entered the forex market back in 1994. Since then, more than 200 representative offices have been opened in more than 20 countries. The company's main office is located in Moscow.

Forex brokers are people who are purposefully engaged in trading on precious securities exchanges and electronic money. Cooperation with a broker reduces risks in the first steps in investment trading, since you invest money under the strict guidance of a professional, and most of the analysis and operations are carried out without your direct participation and investment of time. It is advisable to choose a broker with a good reputation (and with a reputation in general), since in any business, including Forex trading, encounters with unscrupulous people are possible.

How to choose a Forex broker?

Choosing a broker for trading on exchanges should begin with collecting information about successful transactions and openness in working with clients. A good quality broker has its own portfolio of transactions and a large number of reviews from clients. The easiest way is to check the published lists of traders, which are constantly changing and updated. The trader with the most reviews will offer one of the safest working conditions. We also recommend paying attention to how the process of registration and depositing and withdrawing money goes with a particular broker.

Forex broker license

Having a broker's license allows you to judge his integrity and degree of seriousness in his approach to trading. A licensed broker is more likely to settle all transactions and conduct them with benefit not only for himself, but also for the client. But in order to obtain a license from well-known world communities or government agencies, a broker needs to seriously try and earn a certain reputation. If you see that a broker's license was issued by an unknown office located on a distant island, this is not the broker you should deal with.

Forex broker rating

On the Internet you can find several independent ratings of popular brokers. Traders here are sorted by the quantity and quality of reviews, operating time and other important parameters. Here it is recommended to pay attention to the number of closed transactions, the regularity of payments to clients, and not to trading leverage or promised interest. In general, the first steps in trading with the help of brokers should be taken with caution, using small amounts. Hence the preference for traders with experience and safe conditions.

Who are Forex brokers?

In order to answer the question of who Forex brokers are, you need to have a clear understanding of how the trading market works. Brokers (dealing centers or DCs) are licensed companies that provide traders with professional intermediary services for access to trading on the international foreign exchange market. The success of working on Forex depends on the competent choice of a dealing center, so preference should always be given to a reliable and experienced intermediary with a solid selection of trading instruments, who has a large number of completed currency transactions on his account.

How do Forex brokers provide access to online trading?

An important advantage of Forex trading is the ability to trade from anywhere in the world, since Forex brokers give access to online trading. The trading process itself is carried out via the Internet and requires the installation of specialized software (trading platform-terminal). The choice of terminal depends on the preferences of the DC: different companies offer their clients trading through different online platforms that differ in performance and functionality. Popular platforms include MetaTrader4 (MT4), MetaTrader5 (MT5), Mirror Trader, ZuluTrade, etc.

How do brokers make money?

Naturally, brokerage support in the foreign exchange market is not free, and dealing companies, just like traders, pursue certain financial interests. How do brokers make money? By providing comprehensive support for trading transactions, such intermediaries receive income, which is the difference between the purchase/sale prices of traded currency pairs (spread), or receive direct payment from the trader for each trading operation performed. Depending on the chosen work scheme, a brokerage company may receive only commissions or have additional sources of income.

Reliable Forex brokers

How to find a dealing center to which you can safely entrust your own trading operations? One of the surest ways is to choose a broker based on the recommendations of traders who have already worked with one or another intermediary. Numerous ratings will also help make your choice easier, in which information about the most successful and reliable Forex brokers is regularly published in the public domain. In addition, it is worth paying attention to such important points as the transparency of the information provided about the activities of the dealing company (including legal documents) and the availability of 24/7 support.

There are 3 main categories of brokers

There are 3 main categories of brokers in the modern foreign exchange market. Classic (the most expensive) intermediaries work in a full-service format, providing clients with a full range of services - from accepting orders to legal support of accounts. Discount dealing centers (discountbroker) provide orders for the Forex market, and as payment for their work they receive a monetary reward in the form of a percentage commission. Electronic or online brokers specialize in Internet transactions and have recently become extremely popular.

Stock trading broker

Brokerage companies that specialize in operations with securities are also becoming increasingly popular in trading. Trading quoted on stock exchange shares are worth a colossal investment, and it is such intermediaries that allow you to avoid paying exorbitant amounts of money for a place on the market. To do this, a trader just needs to choose a suitable broker for trading shares, pay for his services and gain access to trading platform for further transactions with securities. The size of the commission in most cases depends on the monthly volume of transactions.

Cent DC

The so-called cent dealing centers can be called an ideal option for novice traders who want to practice before entering the large foreign exchange market. main feature, which cent DCs provide clients with - the opportunity to work with minimum sizes currency transactions amounting to just a few cents. Many brokerage companies also offer no-deposit bonuses and allow automated trading. There are many resources on the Internet dedicated to Forex, where current ratings of cent dealing centers are published.

ECN brokers in the Forex market

Despite the fact that such a concept as ECN brokerage appeared relatively recently, it has already become firmly established in traders’ everyday life. ECN brokers in the Forex market differ from traditional DCs in that they form trading system with a large number of participants. At the same time, the dealing center allows the orders of the serviced trader to interact with the orders of other clients, and all participants in such an ECN network can trade with each other, offering their own intra-system prices for the purchase and sale of currency. Trade orders at the same time they are received and registered in the common database of the ECN system.

Advice from Sravni.ru: Successful work with a broker begins with strengthening your position. Establish mutually beneficial cooperation, check the work of the trading broker small amounts. Check the latest broker ratings. Serious interest will not escape you, but the consequences of thoughtless and hasty trading will be difficult to correct.

Hello!

A quick question: are a broker and a forex dealer the same thing or not?

In this article I will not only answer this question, but also give specific explanations about over-the-counter market dealers. I’ll go through specific names, tell you who works under licenses and who operates not entirely according to the law.

I will show you what characteristics a company must have to become a Forex dealer, what legislative acts regulate the activities of this market in our country. And at the end I will analyze the reviews of clients of the largest Forex dealers.

Forex dealer (forex-dealer) is a company that provides intermediary services in finding a counterparty for its clients on the over-the-counter Forex market. The transactions themselves are formed on behalf of the company and at its expense, by establishing financial responsibilities in agreements between customers and the dealership.

As a fee for services, this financial agent takes certain commissions, which are set in the form of spreads from the asset price. The more difficult it is to find a counterparty for an instrument (due to its insufficient liquidity), the higher the spreads are assigned.

Requirements for Forex dealers

The law imposes the following mandatory requirements on these companies:

1. Must be a member of a self-regulatory organization.
2. You cannot combine the activity of a forex dealer with other types of activity.
3. The company must have funds at its personal disposal in excess of 100 million rubles. Plus, if the amount of client funds placed on the Forex dealer’s accounts exceeds 150 million rubles, then his personal funds must be replenished by 5% of the amount exceeding the threshold limit.
4. You cannot install additional agreements that reduce or eliminate a company's liability.
5. The obligation to familiarize the client with the full list of risks that he bears when making financial transactions on the forex market.
6. You cannot provide clients with leverage higher than 1:50.
7. Money transfers to client accounts must pass exclusively through the Russian banking system.
8. It is necessary to maintain complete records of all customer transactions.

New legislation requirements

On April 1, 2019, the Central Bank introduced new requirements for Forex dealers. All of them are aimed at additional disclosure of information.

In this regard, such companies must now publish on their website:

1. Description of the company's contact and legal details, incl. full and abbreviated name.
2. SRO, in which the financial agent is a member.
3. Additional information about protecting the rights of clients and the possibility of communication for the purpose of sending complaints and appeals.
4. More detailed information to clients about their risks when trading on the foreign exchange market.
5. Information that demo access is not similar to real trading.

In addition, financial intermediaries are prohibited from unreasonably widening spreads on instruments and oppressing the rights of clients.

What does SRO require from forex dealers?

To join self-regulatory organization Forex dealers are required to provide:

1. Certificates confirming the professionalism and sufficient competencies of the organization’s employees.
2. Transfer of information about all persons who can have a significant impact on the business of the financial agent.
3. One-time contribution in the amount of 2 million rubles.
4. Monthly membership payments to SRO.

Possible consequences of innovations

All additional restrictions lead to the fact that many large Forex dealers (Forexclub, Alpari, Teletraid, etc.) lose their licenses.

But they continue to work in Russia through their foreign structures, providing services that are regulated by foreign legislation.

However, for clients of companies that were nevertheless able to obtain licenses, serious legal support appears, which is, of course, a positive moment for the consumer.

Difficulties of legislative regulation

So far, the legislative norms are not yet perfect enough and have many legal flaws. A large number of requirements at specific points contradict each other, making it almost impossible to fully comply with them.

Differences between a Forex broker and a dealer

Now I’ll tell you about the difference between a dealer and a broker. In fact, the difference is not so obvious. And mainly it lies in the legal plane.

Dealer activity may imply the formation of an internal quotation base for its users, which will be agreed upon based on the interests of counterparties. All this must be confirmed by special contracts, which are some kind of derivatives, the obligations under which are formed in relation to concluded transactions. The broker provides only an intermediary relay function of entering the unorganized market for the client.

Russian legislation recognizes only forex dealers. Even the word “Forex” is officially assigned in the Russian Federation to these structures. Only they “play” by the rules, but have some restrictions on the terms of trading and are required to comply with a wide range of requirements, which, in turn, are ignored by representatives of other jurisdictions.

But on the other hand, rights protection is only covered for the user base of licensed local financial agents.

Which is better: trading through a broker or dealer?

Here everyone chooses for themselves.

From the point of view of protecting your rights, it is better to choose licensed Russian representatives dealer activities on the Forex market. However, the conditions, opportunities and entry threshold are more attractive with foreign brokers.

The main thing you need to understand is that when choosing a Forex broker you should be very careful and choose only large, time-tested representatives. And don’t get involved with companies that in a week can take their clients’ money to some resort.

How dealing centers work

I’ll tell you about the operating principle of dealing centers, and not licensed Forex dealers.

They help clients enter the Forex market with small capital. Some provide the opportunity to make trading transactions starting from a couple of thousand dollars, while others provide micro-account services where you can trade amounts of less than $100.

This is an exclusively speculative game; you cannot buy currency here for any other personal purposes.

The dealing center receives profit both through commissions and through the provision of various services, training and credit funds.

All dealing centers of this type are foreign agents, so in the event of a force majeure situation with client funds, you will have to defend your rights in offshore zones, which is extremely costly and often unjustified. This is always an additional risk that is worth considering.

To choose a reliable financial agent, you should first go to the website central bank https://www.cbr.ru/finmarket/supervision/sv_secur and in the section “ professional participants securities market" download information about the current list of forex dealers who currently have valid licenses.

As of August 2019, licensed participants are:

• Alfa-Forex LLC;
• VTB Forex LLC;
• PSB-Forex LLC;
• FINAM FOREX LIMITED.

Rating of the best dealers

1. FINAM.
2. ALPHA.
3. PROSMVIAZBANK.

What is the danger of dealers

With a licensed financial agent, the risk of losing capital due to fraudulent activity is extremely low. Yes, and there is legal support here, so in this regard you can be calm.

But in reality, there are plenty of opportunities to lose your money in the forex market. And therein lies the main danger. Providing a leverage of 1:50 effectively means that if a client opens a position with such leverage, then the asset price movement against him by just 2% will make him bankrupt. It is only a matter of time before an inexperienced participant loses his deposit during such trading.

How Forex dealers make money from their clients

If we talk about Russian licensed participants, then relationships are built on a legal basis, regulated and monitored by regulatory authorities.

But as for other companies that pose as brokers, dealers, DCs or others, they may use all sorts of tricks to extract money from their clients.

For example, the most common are:

• trading against the client;
• manipulations with quotes;
• setting too much leverage;
• fraudulent schemes for withdrawing money.

Reviews

Brokers or dealing centers are companies that provide their clients with access to trading on financial markets. The most advanced of them, including TeleTrade, cover the entire spectrum financial assets: currencies, raw materials, stocks and securities, CFD contracts.

HOW DO FOREX BROKERS PROVIDE ACCESS TO TRADE?

In order for you to be able to trade in financial markets, you must have a special program installed on your computer - a trading terminal, which is provided by the broker with whom you cooperate.

TeleTrade uses in its work trading platform MetaTrader. This is a popular, reliable and time-tested program.

Volumes trade deals in financial markets they are calculated in lots. One lot is equal to 100 thousand basic units. Basic unit in currency pair- this is the currency for which they sell or buy another currency. For example, in currency pairs where the US dollar is present, it is usually the base unit.

Margin trading allows you to trade entire lots even for clients whose initial deposit is not very large.

WHAT DO FOREX BROKERS EARN ON?

The main source of income for a broker is the spread. A spread is the payment for trading actions performed or the difference between the purchase and sale of a currency. Thus, brokers are intermediaries whose interest is to ensure that their clients make as many transactions as possible, because this is what their profit depends on.

CHOOSING A FOREX BROKER

The success of trading in financial markets largely depends on the choice of broker and the trading conditions that he offers. To minimize the risk, the company you choose should be large, have a solid history in the market, a positive reputation and many clients.

Forex brokers or, as they are more correctly called, dealing centers in the Forex market, are companies engaged in providing access to foreign exchange trading.

Now Forex brokers are actively expanding the range of trading instruments and allowing their clients to go beyond Forex.

Advanced dealing centers, which includes TeleTrade, provide clients with the opportunity to profit from the difference in prices of financial assets traded in commodities and stock markets. This opportunity is carried out through trading CFD contracts.

HOW DO FOREX BROKERS PROVIDE ACCESS TO ONLINE TRADING?

Access to currency trading and CFD trading is carried out via the Internet using special software - a trading terminal or platform. Different Forex brokers (dealing centers) use different platforms. The TeleTrade dealing center provides its clients with access to Forex trading through the popular, reliable and time-tested MetaTrader platform.

Trading volumes on the Forex market are calculated in lots. One lot is equal to 100 thousand basic units of currency. So, in the USD/JPY currency pair, the base currency (or the currency for which goods are purchased - the Japanese yen) is the US dollar, therefore, one lot of a currency contract for this pair will be equal to 100 thousand dollars, which must be held by someone who wants to exit to the Forex market.

Naturally, not every ordinary person has that kind of money. But many people want to make a profit from foreign exchange trading. For those who do not have enough money to trade a whole lot on the Forex market, Forex brokers come to the rescue, providing their clients with the opportunity for margin trading.

WHAT DO BROKERS EARN ON?

Forex brokers are intermediaries in the implementation of transactions for the purchase and sale of currencies. And it is from this activity that they receive the main income, which is generated through the spread, or the difference between the purchase and sale of currency, or the direct fee for the completed trading operation. Therefore, Forex dealing centers are interested in the activity of clients, so that they carry out as many transactions as possible and receive profit from them.

Choosing a reliable broker

The key step when starting currency trading is choosing a partner company - i.e. directly to the dealing center through which the trader plans to carry out his transactions.

At first glance, the reliability criteria are obvious: the chosen Forex broker must be stable, have a long presence on the market, have a developed network of representative offices, and have authority among the professional community - these are intuitive factors for the reliability of a partner.

More specialized information can be found in Forex broker ratings - lists that group Forex companies according to certain criteria of their activities.

How are ratings of Forex brokers compiled?

The purpose of the rating is to compare different brokers with each other according to a certain general list of criteria: withdrawal period, financial stability, list of proposed financial instruments, investment opportunities and other quality parameters. In addition to this, the rating of Forex companies may include information about commissions, supervisory authorities, online trading conditions - almost all brokers post this information in the public domain on their websites.

Rating of popular brokers 2015
Rating of Forex brokers by league

The ratings are most useful for experienced traders who can study existing offers and choose a company that is as close as possible to their trading style. Beginner traders are more interested in an all-around reliable partner with whom they can learn, gain the necessary experience and explore enough opportunities to develop their own trading tactics.