COMMISSION BASED | Forex Broker


Category: COMMISSION BASED

Commission is something, such as a percent or a particular fixed amount of money a broker gets after he executes a trade for its services. Similarly commission based forex brokers charge commission per transaction either you earn profit or loss. Commission based forex brokers usually dont add their transaction fees into the spread, they offer their clients the same price they get from the international liquidity provider but will charge their commission when you trade. Other brokers who dont charge commission, earn by adding transaction fees into the spread which means that they add some price or you can say they widen the spread. Spread is basically the difference between the bid price and the ask price.

Forex trading is never a win-win game, if one side earns other side gets loss, but the commission based brokers profit dont get affected. Rate of commission is different amongst brokers and depends on the services they provide. They better services they give, the more they charge. These brokers charge either a flat fee or a fee based on the size of the trade. Higher commissions are charged by electronic communications network (ECN) brokers, who provide extra services: real-time trade execution with the largest audience of counter parties, and access to bid/ask orders piled up on either side of the last trade. This bid/ask data can help savvy traders precisely pinpoint their market entry and exit points.

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