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Due to the exciting and high income environment of the foreign exchange market, legions of professional, private, experienced and novice traders are participating in forex trading today. The forex market is the biggest market in the world, and the potential for income is limitless. Experienced in forex trading, these people offer their services to speculators to assist them in making the most optimal decisions in the foreign exchange market. A forex broker can either be a single individual or a company that does the trading for a speculator on the forex market. They hold the trader’s money for them and either buy or sell depending on the trader’s decisions. While forex brokers do not charge commissions for placing buy and sell orders, they get paid based on the spread of a trade. Spreads are defined in terms of pips, or the smallest movements of the currency traded on the market, such as 10 pips, which is equivalent to 0.1%. The higher the spread, the bigger the broker’s fee for a trade is.

While there are many legitimate forex brokers in the market, a fair number of them are likely to be running scams. There is as much chance of finding unscrupulous individuals posing as forex brokers as there are legitimate brokers available. The forex being a global market, there is no one regulatory commission that monitors forex broker activities around the world. However, there are many regulatory agencies per country where forex brokers have to register to start their business. In the United States, the CFTC, or Commodities Futures Trading Commission regulates forex brokers. Without registration, a broker cannot accept deposits from traders and cannot make their trades for them.

Each trader may have their own particular preference of trades and trading styles. Before choosing and hiring a broker, it would be wise to have a selection criteria based on the type of accounts a trader usually holds and the trade platforms a trader uses.