Forex is a very complex market; those who want to enter it must know how it works. The best way to start doing this is to know the differences between a broker and a dealer. Apps like WikiFX can help you identify whether aafx, for example, is one or the other.
Both the broker and the dealer are closely related in the trading market, but although both do basically the same job, there are certain differences between a broker and a dealer in the way they operate.
It is always advisable to use broker review platforms not only to verify if it is regulated or reliable, but also to verify if it is a broker as such or a dealer. WikiFX, among many other apps, provides this information to its users.
When it comes to the stock market, the differences between a broker and a dealer are easy to identify. First, however, there is one important similarity: both can buy and sell stocks and currencies.
Both can not only participate in Forex, but also in markets such as CFDs and the stock market; they simply have a different way of engaging in trading. Users often discuss this topic on platforms such as WikiFX.
The difference is in the way they operate, since brokers intervene in operations only as intermediaries or representation of a trader, while dealers have all the powers to operate on his behalf, i.e. they are the traders themselves.
To better understand the differences between brokers and dealers, it is important to know their characteristics.
Brokers' characteristics
When we talk about brokers in markets such as Forex, their responsibility is limited to function as intermediaries between the user and the market, providing information about currencies, products, prices and also the conditions in which the market is.
Brokers are characterized by having a wide knowledge and a clear vision of the market, playing the role of mediator between who buys and who sells during a transaction. For this reason, WikiFX is full of reviews and user opinions about aafx, among other brokers that operate on their behalf.
In addition to presenting the whole picture of the forex market to its users and providing an advisory service, brokers keep a commission from successful transactions.
Dealers' characteristics
Dealers, also called "distributors'', differ from brokers in that all transactions are in their name. If a user, for example, wants to buy and sell stocks on his own, he can do so as a dealer, assuming all the profits.
Although they effectively work on their own account and on their own behalf without intermediaries (like brokers), they are also related to entities that regulate the markets.
Dealers buy and sell for their own account, and then sell or buy at a different price, making a profit. WikiFX identifies this data through its platform so that users can differentiate between them.
Among all the differences between brokers and dealers, the most obvious is that the broker is not in charge of buying assets on your behalf, only acts as an intermediary, charging a commission on behalf of another. While the dealer acts on his own behalf.
Although the dealer obtains the maximum profit in successful operations, he also assumes the risk when they are not, while the broker, regardless of the operation, receives a small commission for the transactions.
