If you want to trade in the forex markets, you need a broker. But what exactly is a broker? To understand this, consider the following:
Let’s say you want to buy an apple, so you go to a street market. The apple is what you want to buy – the street market is the place where you can do this, because that is where people are selling apples.
Similarly, imagine you are now selling apples and need to find customers; you can go to the street market because that is where your customers are – that is where there are people buying apples.
The street market is a place where buyers and sellers meet. However, when you go to a street market, you do not generally see many people selling apples to each other; they will be sold through a stall.
In the forex markets, this is no different. You have buyers and sellers of different currencies – they need a place to come together and there needs to be a facility to actually buy and sell those currencies.
In the forex markets, however, the buyers and sellers can be thousands of miles apart. In order to find each other, there must be a mechanism that matches their interests: this is where the broker comes in.