Trade systems on Forex | ForexGen

Trading with brokers. Foreign exchange brokers, unlike equity brokers, do not take positions for

themselves; they only service banks. Their roles are to bring together buyers and sellers in the

market, to optimize the price they show to their customers and quickly, accurately, and faithfully

executing the traders' orders. The majority of the foreign exchange brokers execute business via

phone using an open box system — a microphone in front of the broker that continuously

transmits everything he or she says on the direct phone lines to the speaker boxes in the banks.

This way, all banks can hear all the deals being executed. Because of the open box system used

by brokers, a trader is able to hear all prices quoted; whether the bid was hit or the offer taken;

and the following price. What the trader will not be able to hear is the amounts of particular bids

and offers and the names of the banks showing the prices. Prices are anonymous. The anonymity

of the banks that are trading in the market ensures the market's efficiency, as all banks have a fair

chance to trade.

Sometimes brokers charge a commission that is paid equally by the buyer and the seller. The fees

are negotiated on an individual basis by the bank and the brokerage firm.