What is a Forex Broker?
Learn what forex brokers do, how they make money, and how to choose a regulated broker.
Last reviewed: 2026-03-06
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Overview
A forex broker is an intermediary that gives you access to the forex market. You cannot trade forex directly on the interbank market; you need a broker to execute your orders. Brokers provide trading platforms, leverage, and market access in exchange for spreads, commissions, or both.
How Brokers Make Money
Brokers earn money through
- Spreads: The difference between bid and ask. The broker keeps this as compensation.
- Commissions: Some brokers charge a fixed or per-lot commission instead of or in addition to spreads.
- Overnight fees: Swap or rollover fees for holding positions overnight.
- Markups: Some brokers add a markup to the raw spread from liquidity providers.
Choosing A Broker
Choose a broker regulated by a reputable authority (FCA, ASIC, FSCA for South Africa). Compare spreads, commissions, and platform quality. Check reviews and ensure the broker has a track record of fair execution and timely withdrawals.
FAQ
Common questions about this topic.
Are forex brokers regulated?
Reputable brokers are regulated by authorities such as the FCA (UK), ASIC (Australia), or FSCA (South Africa). Always verify regulation before depositing.
What is the difference between a market maker and ECN broker?
Market makers may take the other side of your trade. ECN brokers connect you directly to liquidity providers. Both can be legitimate; research each broker's model.
Can I trade forex in South Africa?
Yes. Use a broker regulated by the FSCA (Financial Sector Conduct Authority) for South African traders.
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Disclaimer and sources
Educational content only. Not financial advice.
Important disclaimer
Not financial advice. Do your own research before choosing a broker.