Can You Trade Forex Without a Broker?
The answer to the subject of today’s article is yes, you can trade forex without a broker and chances are you have traded forex before. As you’ll see, it’s probably not the type of trading you may have been thinking about.
One of the missions our team of Forex Consultants has is to be a single source of all information related to online forex & CFD trading. Part of the reason we developed our Forex Trading Glossary is to answer some of the most commonly addressed question about forex trading. An example being a question we are often asked, “can you trade forex without a broker?”
We All Have Experience Trading Forex
If you’ve ever traveled to another country, then you’ve traded forex. Forex is simply an abbreviation for the term “foreign exchange” so whenever have exchanged your dollars for Euros or Canadian dollars for pesos, etc, then you’ve traded forex, albeit on a smaller scale.
The reason the above examples would be considered a “trade” is that the values of currencies are constantly changing in relation to one another, so if you left a few Euro or dollars in your pocket after a vacation, you may be surprised to learn that they have either appreciated or dropped in value.
Exchanging Money vs Forex Trading
Those who are asking about trading forex without a broker are probably wondering if one can trade online forex without a broker. The answer to this question is no, for a very important reason. The main advantage that forex brokers offer to investors is the concept of leverage.
The idea of leverage is simple. With a small deposit of margin, you can magnify your trading ability. With 100:1 leverage you can trade up to 100,000 units of currency (EUR, GBP, JPY) without committing the full amount of money. Leverage always comes with risks, so bear this in mind.
The important distinction here is that without a forex broker, you would need $100,000 or the equivalent to make a similar transaction. In essence, that would be trading on 1:1 leverage, which isn’t what most investors are looking for. For the average investor this is simply unreasonable, so a broker is required to speculate in the forex market due to the leverage being offered.
Forex Consulting Services – Guidance in Selecting a Forex Broker to Partner With
One of the core services we offer is help in selecting a reliable forex broker to trade and partner with. If you require our assistance in selecting a reputable forex broker to open an account with, don’t hesitate to contact us today. We look forward to hearing from you!