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A forex broker is a firm that gives you access to the currency market and takes the other side of your trade or passes it to a bank. It earns from spreads and swaps, sometimes from a commission too, and it must hold a licence from a regulator in the country it serves.
You cannot trade with the banks that set currency prices unless you have millions to move. A broker lets you trade small sizes with leverage. It quotes prices and holds your margin. It fills your orders. It charges for the service through the spread and the overnight swap, and some accounts add a commission.
A market maker sets its own prices and can take the other side of your trade. An STP broker passes your order straight to a bank or liquidity provider. An ECN broker matches your order in a pool with other traders and banks and charges a commission. Many brokers run more than one model, and the label matters less than the licence and the price.
Start with the regulator. Find the licence number on the broker’s site and look it up on the regulator’s own register. The FCA, ASIC and CySEC registers are online, and so are the DFSA and FSCA ones. Then check which company you will sign with. A broker with a UK licence may put clients from other countries with its offshore company, where the leverage cap, the negative balance protection and the compensation scheme all change. Read the client agreement, then test the withdrawal with a small amount before you trade size.
A broker advertises an FCA licence. Its register entry shows the UK company serves UK residents. A trader in Kenya opening an account is sent to the same brand’s Seychelles company, which offers 1000:1 leverage and no compensation scheme. The brand is the same, but the protection is not. Our country pages show which company serves each market.
Use our broker finder to filter brokers by country and platform, or start with the beginner brokers list. See leverage for the caps each regulator sets.
From the spread and from overnight swaps. Many accounts add a commission per lot. A market maker can also earn from client losses when it takes the other side of trades.
Regulation lowers the risk, and it decides which protections you get. No broker is risk-free, and the licence that matters is the one held by the company you sign with.
Sources: FCA, ASIC, CySEC, DFSA and FSCA public registers, checked 25 September 2026. Checked 25 September 2026.
Risk warning: trading forex and CFDs on margin carries a high risk of losing money. Most retail accounts lose money. Never trade with money you cannot afford to lose.