Do you want to get into the world of FX trading? If yes, then to do that, you first have to contact a broker. A broker is like a key for you to enter the online market of forex.
And to get in touch with a broker in a world where hundreds of brokers are available, you have to know about FX brokers. You should know who they are, what they do, and most importantly, how they can help you. Right?
Then read this article completely to know about the term FX broker:
What is an FX Broker?
A foreign exchange broker is an agent. It also works as an agent between a trader and a network of banks or a single international bank. FX trading is buying and selling of foreign currencies to earn profit. And to buy or sell foreign currency, a trader has to contact those countries’ banks or banking networks whose currency he wants to trade with. Got it?
And an individual never has direct contact with any banking network from a different country. Right? So, that’s where a broker comes into action with its services as an agent to facilitate traders. But if all brokers’ responsibilities and tasks are the same, how are they different?
In reality, all provide extra but different services to attract tarders towards themselves because they want to stand first. Some offer variable leverage, while others attract traders with bonuses and promotions. Globex360 broker is also one of them; Globex360 bonus is one of its best competitors.
The Role of FX Brokers in Foreign Exchange
Do you think that you have direct access to many bank networks worldwide and you don’t need any FX broker? If yes, you should think twice, but before that, you should understand the role of FX brokers in foreign exchange.
There is a term G10 in the world of the FX market, and it means ten globally traded currency pairs. In FX, the trading of currencies takes place in pairs. Currencies that are involved in G10 are:
- U.S. dollar (USD)
- the Euro (EUR)
- And the Swiss franc (CHF)
- the Japanese yen (JPY)
- the New Zealand dollar (NZD)
- the pound sterling (GBP)
- the Australian dollar (AUD)
- the Canadian dollar (CAD)
These eight currencies are used to make ten currency pairs that are mostly used in the global market. But there are many other emerging currencies as well that are used in FX markets like ZAR (South African Rand)
Note: You can only trade in pairs, so you have to sell and buy the same pair to earn a profit like USD/EUR and USD/ZAR.
Now, let’s suppose you are a trader and want to buy and sell USD/EUR pairs. If you want to exchange American Dollars for Euros, you will buy USD/EUR pair. Here, you are buying dollars using euros. After that, you will close the trade by selling both currencies, and you will earn a profit.
Here, the broker will do all the processing; you just have to click a button to sell or buy any currency pair. But all the processes will be done by the FX broker.
If you still have any queries about FX brokers, please let us know!