FOREX TRADING
For trading in a foreign exchange market or for Forex trading, a broker is needed; an individual cannot participate in the market activities on his own. For speculative currency trading there are two types of retail FX brokers, who offer the opportunity of trading. Brokers and Dealers, Dealers are also known as market makers. On behalf of the retail customers, brokers seek the best price in the market, and do the dealing for a retail order, as in the broader FX market the customer cannot do the trading on their own, so the brokers serve as an agent of the customers. They charge commission for their work, or sometimes add the amount to the price obtained from the market. Dealers or we can also call them as market makers are totally different from these brokers, their price is fixed, they deal with the price which is quoted by them, and the customers have to decide whether they want to trade with the given price or not. Against the retail customers these dealers act as principal in the transaction. The customers should see whether the person who is providing service is acting as an agent or has his fixed price and is acting as a principal.