Forex Broker - Their Role In Forex Trading

Forex Brokers play the role of the middle man when investing in the forex market. If you're going to trade currencies then you need a broker to put your orders through. There are a number of ways around the forex broker. Become a floor trader yourself (good luck) or deal with a large enough volume that you can deal with the bank directly.

Unfortunately, most of us lack the fortitude or the funds required for floor trading or placing orders through the bank directly. Enter the forex broker. Banks offer forex brokers rates on currency pairs. The forex broker turns around and offers us a higher rate per currency pair and makes a profit on the difference. This profit is made through the spread. Here are two of the top online forex brokers.

One of my favorite forex brokers. Oanda was the first forex broker i ever opened an account with years ago.

Back then, they were one of the few that offered different base currencies to smaller traders.

I remember choosing them because i wanted an Euro account.

Oanda started out as a currency converter for large businesses such as Samsung. It is the brainchild of Richard Olsen of the Olsen Group. Richard Olsen is responsible for two popular books on forex trading. The "Forex Traders bill of rights" and "Introduction to High Frequency Trading".

They're definitely one of the larger currency brokers and have won numerous awards ranging from the 2009 World Finance's Forex Award to the 2008 Euromoney Award For Excellence.

Their have variable spreads that are competitive. Their utilize a java based trading platform that enables clients to trade anywhere in the world with a java enabled computer and an internet connection. No downloading necessary.

I've personally found their withdrawal fees a bit steep and i tend to prefer the excellent MT4 platform but overall, a good forex broker.

Huge. These guys are probably the most popular forex broker on the internet today. But it wasn't always so. They've had a rocky past involving the scandal with RefcoFX.

Long story short, Refco purchased a 35% in Fxcm, had an accounting scandal and collapsed. Back then, Refco was the biggest player on the Chicago Mercantile Exchange. They were a futures and commodities broker.

Fast forward to 2009 and Forex Capital Management have certainly become a presence in the forex trading scene. They offer some of the lowest spreads found anywhere to micro account holders and have been branching out internationally. Their services are offered in most major languages (Chinese, Arabic, French etc) and opening a FXCM Micro account costs just $25.

Their trading platform must be downloaded and truth be told, i'm not fond of it but its easy enough to use.