Broker

### Your broker is usually your counterparty, not a middleman Spot forex has no central exchange. When you click buy, you are not being matched into a public order book, you are entering a contract with the broker. Some brokers pass that exposure into the wider market (A-book). Some keep the other side of it themselves (B-book). B-booking is legal and common, and it is not automatically dishonest, but it does mean your loss can be the firm's revenue. That conflict sits underneath every retail account, and it is why execution quality, not the advertised spread, is the thing you are really shopping for. The US shows what happens when a regulator prices that risk properly. Under the NFA's forex rules, only US financial institutions, financial holding companies, certain registered FCMs and registered Retail Foreign Exchange Dealers may act as counterparty to retail forex, and a Forex Dealer Member must hold at least $20,000,000 in adjusted net capital. That capital floor is a large part of why the list of US retail forex brokers is so short. ### What to actually compare - **Total cost, not spread.** An ECN account with a raw spread plus round-trip commission often works out cheaper than a "commission-free" account with a wider spread. Do the sum in pips at the size you actually trade. - **Execution on news and session opens.** This is where slippage and requotes live, and a demo account will never show you the truth of it. - **Withdrawals.** Test with a small one early, before you have a balance worth arguing about. - **Which entity holds your money.** Segregation and any compensation scheme attach to a specific legal entity, not to the brand. ### Two tells that cost nothing to read **The risk warning.** FCA and ESMA rules require a CFD broker to publish, in a standardised warning, the percentage of its own retail client accounts that lose money. It is sitting on the homepage. Read it, and read it across the brokers you are comparing. **The bonus.** Both the FCA's CFD rules and ASIC's product intervention order ban firms from offering cash or other inducements to encourage retail clients to trade. So a broker dangling a deposit bonus or trading credit at you is quietly telling you which rulebook it is not standing under.