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Who is a broker: in simple terms about what he does

A sharp look, a daring grin, a white collar - this is how a typical stock exchange employee looks in the public mind. Modern culture portrays them as always shouting, energetic and rude traders. But who is a broker really? To give an answer, first, you should refer to the history of trading. For consideration, we will take not the ancient stages of the formation of the market (from barter to currency), but the era of already formed market institutions.

Definition of a broker and his activities

Who is a broker in simple terms? Depends on the site on which it is presented. In some cases, it is a person (or group) conducting trades instead of a trader, in others it is the only access to trading platforms. The activities of brokers are regulated by the laws of the state and the principles of the platform. Most often they are presented on the market in the form of companies. They can be divided into:

  • FCM — the company participates in trading using the client's finances
  • IB — provides access to the market, but does not save the customer's money

It is advisable to choose a model of interaction with the market in advance, otherwise the trader may leave in disappointment after the first deal. It is important to familiarize yourself with the company's recommendation list, the terms of the platform and the principles of the “game”. A broker is not only about access to the exchange or a hired "player". This is both an analyst and a teacher, sometimes a consultant. On some sites, the broker is just the one who finds profitable deals for the trader, on others - the only actor. Let's take a look at them and the role they play, one by one.

Who are traders and brokers? What are their differences?

A trader is a full-fledged subject of the market. His assets are a bargaining chip. In large markets, traders are often representatives of enterprises or banks.

The broker, in turn, is an intermediary. He is the one who finds the best deal and the one who “plays” with other people's capital. In addition, he conducts training and analytical work. Remains a civilian employee, is responsible for the customer's money. In the modern world, there are almost no "wolves from Wall Street" left as the speed of acceptance of deals and the appearance of proposals has increased (in comparison with the 90s) at times. These are now semi-automated companies. Bots search for deals and analyze market trends, while people make decisions.

Now that we know the answer to the question “what is a trader and a broker”, we can start to get down to more pressing questions.

What does a broker do and why is it needed?

What are the features of exchange platforms? Who is this broker? Why are these people necessary? You will find the answer to these questions by reading the article further!

For a correct understanding of the exchange and the people working on it, you should delve into the very essence of capitalist relationships. It consists in one word - speculation. You can find an analysis of the term in the article about traders. But besides the principle “Buy cheaper, sell more expensive” there is “something else”. Namely, the derivative of globalization and unification is conventional units.

With the acceleration of production, the numerical increase in goods, and simply with the growth of the rate of trade, people have a need to create conventional units. The first exchanges appeared in the 19th century (and their local counterparts even earlier) and represented trading platforms like the "Chicago Mercantile". Commodity-oriented, they were the first to transact with no bargaining points at hand. Gold was the only means of payment at the interstate level. Cumbersome, attracting unnecessary attention, it severely limited the trading process. To make life easier, it was customary to store gold bars in specially designated places; their place in the daily life of the market was taken by securities implying a certain denomination.

At the same time, the broker profession began to emerge. Since traders simply did not have enough time for quick bargaining, the need for an “intermediary” was felt especially sensitively. The first brokers were employees of large industrial organizations. Responsibility for the capitalization ratio of the enterprise fell on their shoulders. Coping with the load, qualified personnel soon flooded the exchange, some of them organized by private companies.

The broker was already acting as a civilian employee. He was obliged to analyze market trends, adjust to them and increase the capitalization ratio by all possible methods. On the commodity exchanges, he was engaged in finding deals, forecasting prices and analytics.

Что делает брокер

With the advent of multinational companies, the realities of the market have changed completely. In addition to the increased speed and consumer needs, there have appeared players who are able to simultaneously invest large sums in promising developments or enterprises. For the most effective investment of funds, skillful people were needed who could quickly analyze the situation on the stock exchange and make the right decisions. Brokers became them. After decades of processing trades and the rise and fall of stocks, they crystallized into market speculators and took on a modern look.

At the beginning of the 20th century, large joint-stock companies have already formed in the developed countries of the world. De facto, it was they who managed corporations, defining desirable and not so desirable paths of development. In the 1920s, the number of middle-class investors increased several times. Even a tiny percentage of the shares gave profit and the ability to exert, albeit indirect, but pressure on the corporation.

In addition to the influence of investors, stock and commodity exchanges contributed to the development of trade between states. One platform could skip thousands of trades per day. Each of them established both diplomatic and economic relations. The proliferation of similar platforms was the last step towards globalization. Brokers, without investing their own funds, developed trade and were partially responsible for establishing diplomatic relations.

It is impossible to build a city without roads for cars and railways. The fanning blackouts due to the monstrous shortage of coal defy explanation. The modern world, its conveniences, the speed of life appeared only thanks to globalization and the emergence of trading platforms. Even at the household level, we can notice the effect of these processes. This is how tea and coffee appeared in our life. Electronics and Internet.

By the time of the development of transnational and transatlantic companies, exchanges familiar to us with well-known rules and restrictions have already formed, we will talk about them later in the article. Finally, we will mention - the speed of decision-making, exhausting trades and regular nervous breakdowns - this is what a broker means!

Let's take a closer look at its work and trading tools.

Who is a broker and what does he do?

"So what is the broker doing?" the reader asks. The answer will surprise you - his “plays”. Although the term is unofficial, it reflects reality extremely accurately. "Game" to increase or decrease the value of conventional units (stocks, goods, currencies). But just to come and start “playing” is not enough. In addition to a number of registration procedures, you need to learn how to use the tools and master the basic understanding of transactions. Read on to find out more!

Fibonacci Levels and Andrews' Pitchfork are used to analyze the current state of the market and specific assets. You should read them separately:

  • “Fibonacci Levels” is a charting system that works on the “waves” principle. Each level is a point that disposes either to buy or to exit the trend. Using the chart, it is relatively easy to determine the prospects for investing or withdrawing funds. Fibonacci is mentioned in the name for a reason — the leap length corresponds (approximately) to the “golden section” parameter — 1.618.
  • "Andrews' Pitchfork" is a tool that functions in conjunction with Fibonacci Levels. It consists of 3 trend lines. Through the use of "Andrews' Pitchfork", it is possible to determine when to buy or sell assets. Its principle is to draw 3 lines on the graph of growth / fall of assets.

Before considering the types of exchanges, let's talk about the standard “tricks” of brokers that are relevant on all platforms.

Since the broker receives money from the difference in amounts, he is interested in increasing or decreasing the value of the "unit". Let's start with the basics — long and short positions.

A person who first plunges into the world of speculation, assets and constant trading often hears the words "long" and "short". You could understand their meaning by the name, but let's go through them in order.

A short position (Short) is trades with a short time frame. The time frame is from a couple of hours to a day. Short trades are most popular on the currency exchanges (forex). They allow you to "roll" money in several projects in a few hours, which will allow you to quickly recover in the event of a "loss".

Shorts are popular with a specific type of trader called "bears". They benefit from falling prices. The most effective in this tactic are deals with a short position.

Long position (Long) — in turn, a deal for a long interval. It is done in anticipation of the growth of certain assets. This type of transactions is most popular on stock and futures exchanges. Thanks to a competent calculation of market trends, the broker invests money in promising enterprises (or contracts) with the expectation of long-term growth. The time taken for long trades ranges from weeks to years.

Longs are most often used by "bulls" — a type of brokers and traders who make money on the growth of assets. They buy shares and other securities and contribute to their growth. The transaction itself is already a significant help in the "game", as it affects the strengthening of assets.

Finally, it should be mentioned — bears and bulls are the antagonists of the stock exchange. They are the ones who create the movement on the exchange. Their activity leads to the rise and fall of stocks. Stability, obviously, was never dreamed of by any markets.

These actions contribute to the development of many combinations. Most of them are only possible when plotting support and resistance. “Fork” is considered to be one of the main and winning ones.

Brokers use this technique to quickly react to changing trends. The “fork” allows you to literally reverse the strategy and act, avoiding the risk of losing funds. To apply the technique, you need tools such as Andrews' Pitchfork and Fibonacci Levels.

What does a broker need to know?

Newcomers to the exchange often use dishonest algorithms. They often close a surprising number of successful deals in a matter of days. As a result, the administration of the exchange launches a check and, in most cases, blocks the account of the unlucky broker. What should you do to avoid a premature ban and just achieve success in an honest way? Time-tested broker strategies will come to the rescue. What are they and how do you use them? Consider further!

A distinctive feature of the "game" on the stock exchange is the need for improvisation. While there are guidelines and tactics for doing business, they simply aren't enough to be successful. Among the main methods of working in the market are:

  • Trading with the trend means “going with the flow”. Best Newbie Tactic. It will allow you to earn "primary capital" with less risks. But it will not bring money either.
  • News trading is a strategy of experienced “players”. It involves deep analysis and thoughtful decision making. Doesn't allow for emotional factors. Allows you to influence the rate of large transactions (and sometimes the entire market). Not suitable for beginners.

Having familiarized yourself with the basics, the methods of the "game". Having received an answer to the age-old question “what is a trader and a broker”. After reviewing the background of modern platforms. After analyzing the toolkit and getting a detailed idea of ​​who a broker is, you can go to the most popular markets and platforms where he works.

Defining a broker on various platforms

Let's consider the principles of operation of the main platforms where brokers are represented.

The fundamental platform from which the development of trading institutions began was the trading exchange. She, as the name implies, specializes in the exchange of goods. An interesting feature of such sites is “multilevel”. There are exchanges where traders from certain industries, regions are represented, and there are also platforms for trading strategic goods between states.

Кто такой брокер и чем он занимается

Traders are market entities whose task is to buy\sell. They have a tangible product and are interested in selling it. At the same time, brokers are an analytical and search engine rolled into one. They look for contracts and analyze possible changes. After all, the trading exchange is distinguished by a huge number of factors affecting price jumps.

The first to mention the stock market. Thanks to modern pop culture, this phrase evokes Wall Street associations. In general, not casual, but not entirely deserved. Let's figure it out in more detail.

Stock exchanges are platforms on which securities (shares) are traded. The "game" is on the rise or fall of the assets of certain enterprises. What does a stock exchange broker do? Speculates! By acquiring some assets cheaper, it sells them at a higher price. Also, the specificity of the platform includes the impossibility of trading without the aforementioned broker. It is regulated by the features of the platform and does not apply to other exchanges. In addition to being a broker, it is an intermediary - he is the only access to trading. His services can be divided into:

  • consulting — will tell you about the work of the exchange, trading programs and basic strategies;
  • training — conducts webinars, forms courses, records lessons, writes educational articles and shoots training material for those who want to start making money on the stock exchange;
  • analytical - analyzes transactions, makes predictions, gives recommendations;
  • calculated - conducts financial analysis and generates tax returns in accordance with the law.

To understand the work of the stock market, you need to understand what assets are. To do this, let's delve into the very essence of shares:

A share is a part of ownership of a company. It secures the owner's right to receive a share of the company's profits. It also allows you to directly or indirectly influence the policy of the company. There are two types of securities:

  • Ordinary;
  • Privileged;

The former offer co-ownership of a joint stock company. By purchasing them, the shareholder receives a classic set of tools to influence the company. They imply the ability to make a profit and influence the course of the enterprise's development. Income and management depends on the number of acquired assets.

Privileged ones, on the other hand, offer the depositor a guaranteed profit (in case of problems with the case), priority payment and more opportunities in management. They are often launched to accelerate asset growth. They turn out to be an extremely profitable investment in promising endeavors.

We will also mention the system for launching shares on the stock exchange. It is not enough to organize a business and shout out “We are trading!”. The shares are listed. It includes the following stages:

  • Application for the procedure for listing securities, their inclusion in the quotation list. This can only be provided by the issuer of the specified documents.
  • Conclusion of an agreement with the stock exchange for an expert assessment.
  • Disclosure of information on material facts affecting the issuer's activities.
  • Analysis of securities for profitability, liquidity ratio, etc.
  • Consideration of the results at a meeting of the Commission for the Admission of Securities. The audit report is registered in accordance with the laws of the state in which the company and the platform are registered.

An interesting fact — important papers are stored in a non-documentary format. They are located in so-called “depositories” in electronic format. A distinctive feature of the storage is a security system. She will not allow manipulation, forgery of securities.

But trading is not limited to buying\selling shares. There are many types of exchanges, including futures, credit, tax, etc. But financial ones deserve special attention.

They represent brokers as intermediaries between the client and the banks. They are divided into the following companies:

  • NDD — interacts with suppliers of quotes to the exchange. They offer customers the most profitable contracts. Earn on commission.
  • STP — work in a similar way to NDD, but interact with large companies.
  • DD is a broker that does not transfer money to the exchange, but conducts transactions within the company. If the player wins, then the money goes directly to the firm. For this reason, brokers are interested in losing the customer.

Forex or foreign exchange markets are exchanges where trading is conducted not in stocks, but in money. The practice of “fast money” is common on such platforms. Its principle can be broken down into several stages.

  1. You have an amount in your account
  2. Someone on the other side of the planet (or in another time zone) needs this money
  3. You transfer it for a short time (up to 12 hours)
  4. If the case "burns out" then you get the amount back with a percentage on top.

The practice of “small” financial exchanges is widespread. They look like an analogue of large platforms, but with significantly lower turnover. It is these exchanges that have gained popularity over the past 20 years. Among them there are often platforms with a “low threshold of entry”. These are forex exchanges for "playing" on which it is enough to deposit a small, fixed amount. It often ranges from $50 to $100. Most of these platforms exist thanks to the constant flow of traders. Brokers on them often act as analysts or experts who invest the customer's funds in profitable projects.

Attention should also be paid to such an option as a binary option. On the basis of the “Fibonacci Levels”, a chart is generated showing the history of the growth of certain assets. The broker makes a forecast for growth or decline. The trader can invest money in the probability of the first or the second. The specificity lies in a small selection of rates — there are only 3 of them. A bet on a rise, fall, or you may not bet at all.

Broker, what is this? Profession and career growth!

Unlike a trader who is not obliged to report to anyone and in general “he is his own boss”, brokers are hired employees. Their responsibilities are not limited to the "game" of assets and speculation on the price. They can provide various services related to the market. From analytics to business skills training.

To work as a broker, you must have the skills of operating on trading floors, analyzing the state of assets and knowledge of the principles of the market. The ability to build up\down charts and drive strategies is the most important part of the "game" on the stock exchanges.

Although lone brokers are sometimes encountered, large traders prefer to trust companies. The reasons for this are different: doubts about the ability of one person to complete the deal; confidence in the performance of the team or simply pathological rejection of “lone wolves”; Large orders and large revenues often go to brokerage companies. As a result, newcomers (often) settle in them, who have not abandoned the market for months of wandering.

Career growth in such companies does not always look as promised by the Wall Street films. Crazy profits from large, “burned out” deals are far from all deposited in the wallet of an employee of the company. Sometimes it may seem to him that the “freelance” proceeds were even more impressive. But if the broker manages to overcome the thirst for profit even for a short while, then soon his name will become known, the reputation of not only the company, but also himself will grow before our eyes. Renome is inextricably linked with money, profitable deals will not keep you waiting long.

Why the development of your platform is directly related to lead generation

Business can only grow with the presence of a constant influx of customers. Searching for interested people, “calling” numbers from the phone book is a monstrous waste of time. Each case is set in motion by a client who is interested and ready to invest his money. It is difficult to find it, but it is possible. To do this, you do not need to spend your own energy searching forums and thematic sites. It is enough to order lead generation.

With the help of targeted and contextual advertising, you can attract customers who are exclusively interested in your services. Our company offers you broker lead generation and hot traffic generation. We use contacts of exclusively interested and active clients.

Our company offers effective lead generation for your sites. We provide complex provision of leads in such areas as:

  • cryptocurrency
  • binary options
  • forex
  • financial markets
  • trading programs
  • individual projects.

We offer services in the vastness of the EU and the CIS. Order hot leads with profit and develop as quickly as possible, and the Leads For FX team will help you with this!

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