What do brokers do?

Do brokers buy and sell assets for big companies etc. or their job is something else? Before I started trading I used to think that they execute every trade but you can acutally enter and close trade using platform, without contacting a broker as man, so what do they exactly do?

1 Like

By definition broker is someone or firm that acts as a bridge between an investor and an exchange.

The exchange provides the data liquidity.
You are the investor who’s interested in investing based on those data.
The broker is the middle man, that execute your investment back to the exchange.

They get paid through commissions from each investments you make when you win and trades you lose.

So yes A broker can buy and sell assets on behalf of you but also profit by trading against you if you are a consistent losing investor

Contrary to popular belief none of what they do affects your profitability (at least good renown brokers), not until you start trading large figures account anyway, that you’ll start to feel their presence. Some huge portfolios firms (100 millions type stuff) don’t even rely on brokers, they go directly to the source, the liquidity providers themselves (something I read in Market makers)

choosing a broker is a very dedicated decision and tough game also , because the broker can affects the result of our trading with certainly.

should choose the broker which is more appropriate to the concept of trading that will be used , if love doing scalping should choose the broker which allows trading concept such as this.

choosing a right broker is not a easy deal because almost thousand of brokers are available in this retail market place and most of them are found to be scams.

There is no way to trade without a broker.

We all know what a broker does. To invest in the market, a broker is a platform that gives us that place. And there are many more types of benefits that brokers offer.

How brokers operate is covered in our Broker 101 lessons.

Rather than be in a hurry to start trading with real money, new traders should take the time to read through these lessons.

Read my post.

But you are just using platform when you open or close position, you don’t need a real man to do something for you.

I didn’t ask that, please read my post.

But don’t they do something more than just opening opposite trades of other retail traders? I mean it is necessary to have a degree and some licence (I think) to become a broker so they should probably do something more complicated than just looking at other’s trades and doing the opposite.

They are liquidity providers.

A forex broker provides access to trading platforms that can be used to buy and sell currencies. Forex brokers charge a fee, usually in the form of a spread. This is the difference between the buy (offer) and sells (bid) prices, which are wrapped around the underlying market price.

That’s exactly are they facilitate trade execution

But that is actually done just by click on the button, my question is what is job of broker employed in brokerage firm.

That wasn’t my question.

Basically what a broker does is help the traders in their trading experience in exchange for some commissions. Another thing that brokers do is they may trade against you in the market and win money from your losses. So be careful there.

each broker has its own approach to work and to its traders, even more so

Yes well, they need real “humans” to manage all of that. I don’t think there’s a single human for every single customer. It’s managing it, perhaps creating algorithms to deal with the market movements etc.