How Forex Brokers Make Money? ☝

🔴 Trading is Risky! 74 to 89% of retail investors lose money when CFD trading/spread betting!
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How do forex brokers make money? Have you ever wondered how your CFD broker or spread betting provider makes money?
These brokers typically have big infrastructure costs, technology costs, staff costs, marketing costs..etc yet they still seem to make decent profits. How do they do it?
The first one is the spread - this will be in pips if we're talking forex. With major pairs the bid-offer spread will be quite tight but spreads will widen for the more exotic pairs.
Number 2 is overnight financing that the broker will charge you for holding positions overnight. You will be charged a small fee for each day that you hold onto the trade. The longer you hold an open trade, the more you will be charged.

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📜 Disclaimer 📜

69.9% of retail investors lose money when trading CFDs and spread betting with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

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[JohnPickup-CDHS-zeqd]

There's only one hanging question... Why would any broker want their traders to lose? When traders lose, they give up, and when traders give up, brokers lose business

[whoaitstiger]

I can tell it's going to be a good one when I see a cartoon character on the whiteboard. :D

[samricher]

The amount of knowledge I have learned from this guy is over 9000

[kisharnwhattodo]

I love this man especially the way he speaks and all. But for those of you who are in Asia and have difficulty to understand him speak. You could probably slow down the playback speed to 0.75x 😁

[jabumathe]

Your terminologies are for people who are used to the market

[supplanter]

am I missing something here...? It is commonly said that the broker hedges your trade to avoid risk to themselves. However it does not seem possible for the broker to avoid risk by hedging though right? For example if I take a buy trade and the broker takes the sell opposite trade and I am successful and profit from the trade, all the broker has is the sell trade which is a loss. So how does this cancel risk for the broker?

[antoniusgerber]

Thank you Mark. You answered a nagging question I had regarding Brokers. Great channel.

[laxide]

all i know is that they make a lot more than i do

[kwameenoch]

I thought the broker was just a middle man, well that sucks if they are the ones you're dealing with

[mreza]

then the question is how Liquidity Provider (LP) make the profit ?

[alevtinashubina]

wow... now I know how to make money in the right way... thank you

[javierandre-orlich]

Thank you for the awesome explanation! One thing I would like to get clarified if possible: how come brokers are able to leverage all those individual trader's deposits and still make a profit from it? It seems to me that using leverage to "borrow" money from the brokers would put brokers at a very high risk if the price moves against the trader's forecast. I understand most of the trades get cancelled-out by traders on both sides (buying vs selling), but by using more money than is actually deposited on trader's accounts shouldn't that make the broker lose money? Still can't figure out how that part works.

[haiderrizvi]

The book B type brokers takes more risk to get vertical spread on client exposure.

[johnholme]

Thanks for the info, that was very interesting. I always wondered how it worked.

[andyshortland]

is there any chance you’re able to produce a video on fading a trade (in depth), great video 👍🏻 📈

[aliarif]

Hi!
One of my friends joined the fx company as a sales executive, he told me a strange thing that he gets paid both on In and Out of a trade e.g if the eurusd spread is 1 pip he gets paid a fixed percentage of 20 Dollars. Is this possible? how broker charge us spread twice? Please explain.
Big time fan, long time follower.
Thanks

[petar]

Can anybody explain me what if Dave takes trade with 2000 lot i didn't understand what is happening then.

[Gabriel-icm]

Great, thank you! Very knowledgeable!

[aravindhanr]

I'm from india, i can't get what you said sometime, so speak slowly sir, I'm following your channel for 2 years