What Is a Broker?
A broker is an intermediary that provides traders and investors with access to financial markets. In exchange for this access, brokers charge a fee — typically via spreads, commissions, or both.
Retail traders cannot directly access interbank forex markets or most stock exchanges without going through a licensed intermediary. A broker provides the trading platform, market access, order routing, and often educational resources and analysis.
There are several common broker models. A market maker quotes its own bid/ask prices and takes the other side of client trades, managing its risk internally. An STP (Straight-Through Processing) broker routes orders directly to liquidity providers. An ECN (Electronic Communication Network) broker aggregates quotes from multiple providers, often giving raw interbank spreads plus a commission per lot.
The choice of broker model has implications for pricing transparency and conflict of interest. ECN/STP models are often preferred by active traders for their tighter spreads and because the broker profits from commissions rather than from client losses.
Key factors in evaluating a broker include: regulatory status (is it licensed by a reputable authority?), fund safety (segregated accounts, compensation scheme), trading costs (spreads plus commissions), platform quality, and customer support.
TrustFinance aggregates independent user reviews and expert analysis to produce trust scores for brokers across all major markets — providing a reliable starting point for traders choosing where to open an account.
Ready to put this knowledge into practice? TrustFinance independently reviews and rates regulated brokers — see trust scores, spreads, and real trader reviews.
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