General Types of Brokers By Forex

Brokers Nature of a Broker

One of the most important investment decisions that you have to make is determining the right broker. You

need to find someone who will handle your buy and sell orders and will act as the “agent” for your

executing your other investment activities. A broker is the entity through which investors hold a brokerage

account. The broker is usually in contact with the leading players in the major financial aspects such as

banks, insurance companies, food, private companies, clothing industries and a lot more. He possesses an

in-depth knowledge of the financial market.

There are different types of brokers in the financial worldBasically, there are different types of brokers in

different industries.

1. Online Broker

These are the type of brokers who do their job through the use of brokerage websites and present

investment database information to the Client online. Specifically, brokers provide data like the graphs,

charts and investment strategies.

Stock and the forex trader are sometimes categorized as an online broker in general.

2. Forex Broker

Forex broker, referred as currency trading broker, lets the potential clients to use a demo account first so

they would acquire some necessary knowledge on trading and how their system works.

3. Stock Broker

This kind of broker trade stocks (the bonds and mutual funds) on behalf of the Client via a brokerage

account. Stock brokers can be categorized in two, namely, Discount brokers and full service brokers.

Discount brokers provide a cheap manner of buying securities for the investors who are certain with what

they want to purchase. They usually charge less expensive than the full service broker because they only

transact your trades, but they don’t provide advice or research. These brokers also depend on doing

business in volume. Full Service brokers offer a more personal service, like recommending specific

investment strategies and plans. Their service covers retirement planning, estate planning and other long

term care planning, plus creating practical investment strategies for their specific financial goals. They

usually conduct a one-on-one meeting with the client, that is why they usually charge higher fees.They get

compensated based on how often you trade

4. Insurance Broker

Insurance Brokers are from insurance companies. They inform the Client about the best available policies,

fix customer claims and gains through commission basis Most of insurance brokers deal particular type of

insurance, like health, life, home and auto.

5. Real Estate Broker

This is one of the most common type of brokers. They serve as an intermediary between the buyer and the

seller of a property. Before making deals or transactions he must have a formal license and have to pass

real estate law exam. The broker is also not allowed to make major decisions on behalf of the client.

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