Most retail forex brokerages act in the role of dealers, often taking the other side of a trade in order to provide liquidity for traders. Brokers make money with this activity by charging a small fee through a bid-ask spread. Before the emergence of retail forex brokerages, individual trading amounts less than US$1 million were discouraged from entering the market by high bid-ask spreads.4)

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With the advent of the internet, many brokers have allowed their clients to access accounts and trade through electronic platforms and computer applications. A broker in the past was considered an individual member of a profession and often worked at a special agency known as a brokerage house (or simply a brokerage). Nowadays, the term “broker” is often used as shorthand for a brokerage.1) 

Most retail forex brokerages act in the role of dealers, often taking the other side of a trade in order to provide liquidity for traders. Brokers make money with this activity by charging a small fee through a bid-ask spread. Before the emergence of retail forex brokerages, individual trading amounts less than US$1 million were discouraged from entering the market by high bid-ask spreads.4)

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