Broker

A broker is a firm or individual licensed to accept and execute trading orders on behalf of clients in exchange for compensation. In retail trading, the term most commonly refers to a regulated (or, in some cases, unregulated) platform that provides access to financial instruments such as currency pairs, equities, contracts for difference (CFDs), or cryptocurrency. Brokers are categorised by their execution model — market maker, ECN, STP, and hybrids — which determines how orders are routed and how the broker earns its revenue.

In plain English — A broker sits between traders and the markets they want to access. Most retail trading platforms, whether for forex, stocks, or crypto, are operated by brokers. When you place a trade, the broker either routes it to an external market or takes the other side itself. The broker earns revenue on each transaction — either through a visible commission, through a spread mark-up built into the quoted price, or through a combination of both. Brokers vary widely in how they are structured, regulated, and how they handle orders, which affects the quality of execution a trader receives. Understanding which model your broker uses helps you interpret your trade confirmations and calculate your real costs accurately.

A trader decides to buy a currency pair. They log in to their trading platform, which is operated by a broker, and place a market order. The broker receives the instruction and either routes it to a liquidity provider (in a no-dealing-desk model) or matches it against its own book (in a dealing-desk model). Either way, the order fills and the broker records a fee — either a commission line item or the built-in spread. The trader sees the entry price on their open trade; the broker has already earned its fee. Institutional traders often access markets directly, without an intermediary; retail traders almost always route through a broker.