What a broker actually does
Video: SpiritFX Trading Academy
A broker is the company that gives you access to the market — the app or platform where you actually place your trades.
They're not your friend and they're not your enemy. They make money from spreads (the small difference between buying and selling price) or commissions, whether you win or lose. That's important to understand — your broker doesn't need you to lose for them to profit.
What matters most when picking one: are they regulated, do they let you withdraw your money without drama, and do their spreads stay reasonable during real news events, not just quiet hours.
Regulation is the detail beginners skip and shouldn't. A regulated broker has to keep your money in segregated accounts, separate from the company's own operating funds, and answers to a financial authority if something goes wrong. An unregulated broker can, in the worst case, simply disappear with client funds — it has happened, repeatedly, in this industry.
Execution type matters too. "Instant execution" means your order fills at the price you clicked, or the broker rejects it if price moved too fast. "Market execution" fills you at whatever the current price is the moment your order reaches the server, even if it's slightly different from what you clicked. Neither is inherently better, but knowing which one you're using explains why your fill price sometimes differs from what you expected.
Key takeaway
A broker is the road you drive on, not a competitor in the race. Pick one that's regulated and treats withdrawals fairly.
Example
Exness, for example, makes money on the spread — the small gap between the buy and sell price you see on every pair. That's the same whether your trade wins or loses, which is exactly why a broker doesn't need you to lose.
Try this
Open your broker app (or a demo one) and find where the spread is shown for XAUUSD. Compare it during a quiet hour and during the London/New York overlap — note if it changes.
This lesson is part of the free TDWK Academy — 40 lessons from zero to funded trader, with progress tracking and a certificate exam.
Continue in the full Academy →