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Answer:
To add to forex ninja's answer, those brokers who simply match buyers and sellers can make money off the spread. When trading with a broker, there are always two prices, the bid and the offer. The difference between the two is called the spread. When you buy a pair, you buy at the offer rate but when you close out your position (or sell), you have to pay the bid price, which is lower. Now remember, when you close out your position, your trade will be matched with an order of another trader, who is buying at a higher price than what you are selling. Where does the difference go? That's right - to the broker. Also, take note that other brokers charge transaction fees per trade, or on interest rate differential. These fees add up and add to the brokers profits.
