Broker: understanding, types and Tips on choosing the right Broker

While talking about the forex business, one of the key players in this business is a forex broker. Play forex or foreign currency trading broker is required which is a professional company that could also shape the Agency, institution or individual that serves to bring together between the seller by the buyer in the transaction of buying and selling foreign currency (forex).

In the world of buying and selling foreign currency, in fact these activities are dominated by big banks from around the world. With the major world currencies such as the US, the Yen, the Pound and the Euro, then a large portion of the buying and selling of currencies dominated by the central banks of major countries. Therefore, since we are running forex business with limited nominal and small scale, it is not possible to make deals with the major banks.

What's more, we also need a partnership liaison with the major banks where there are restrictions on the minimum nominal to perform transactions with the big banks. This is where it takes the role of a broker. Forex brokers can serve the retail transactions will be set up so that every individual could enable traders to do forex trading. In practice this retail forex broker will forward requests from trader to broker a larger, onward to every request could be accommodated traders in the forex market.

There are 2 models of Forex brokers Benefit, the following Mechanism

  1. Forex brokers who take fees from each lot transactions that occur between the seller and the buyer,
  2. Forex brokers are just taking profit of the difference/spread between buy and sell. Current forex broker generally uses the difference in spreads
Brokers take advantage expressed with units of pips, where 2-3 number of pips is quite widely used forex brokers for the US currency, the Euro, Yen and Pound, and will usually take more than 5 pips for secondary currency. But the brokers profit is a net gain, since it would still cut to operating costs, the cost of the fee to the broker and Commission fees to agents.

Online Forex broker, an intermediary Transaction Solution in the Digital age

Prior to the internet era, when a trader wants to do the transaction, then it must use the communication with old technology, i.e. the phone. With the presence of the internet era, it is now a trader can trade forex in real time.

An application is referred to as metatrader which can be used by traders to be able to monitor the price, do the execution order with a much shorter time. With this tool, the trader can have access to news-news on forex trading, chat or discussion and others.

Online forex broker is the solution needs of online trading transactions in the digital age. Online forex broker forex trading provides convenience, so that nowadays nearly all forex broker can give you online trading facilities to traders who take shelter under it.

Tips on choosing the right Forex Broker

  1. Choose the Forex Broker with Complete Service according to your needsEvery broker has a policy, Ministry and service. Therefore, first you need to have a list of a number of forex brokers that cater to trading in Indonesia. Then do some checking to the respective website service providers the broker, that way you will know the service and offer what they provide and match with your desires and needs.
  2. Pay Attention To The Safety Factor, Make Sure The Broker Got Permission BappebtiIn choosing a broker, then the security factor is the most important thing for prioritized. By choosing a forex broker is good, then it can guarantee the existence of our money and our money was taken to prevent escapes by the broker. To ensure the security of the broker, then we need to check the ownership of a brokerage permit Agency commodity futures trading Watchdog (Bappebti) which the Agency acts as the regulator and supervisor of the Department of Perdangangan Indonesia.
Usually in addition to having permission from Bappebti, a broker is also a member of the two futures exchanges are there in Indonesia, namely Indonesia Futures Exchange (JFX) and the Indonesia Commodity and Derivatives Exchange (ICDX). Then to ensure our money is secure, make sure that the broker of your choice becomes a member of the Futures Clearing HOUSE or Indonesia. HOUSE party will provide a guarantee on any incoming funds, traded, settled and withdrawn by the customer.

A broker who became a member of the HOUSE will have a Segregated Account where we enter the funds, then these funds do not go directly into the accounts of brokers, but are on a third party, so that the broker has no chance to escape the customer's money.

The need to look out for is illegal brokers who still operate that typically offer price and the costs are very competitive to attract many clients do forex trading transactions through them.