Definition of a Broker: Duties, Responsibilities, and Types

Understanding Brokers – In investing in stocks or forex it can indeed be used as additional income or often people say passive income. However, if you want to enter the world of forex, you cannot directly make a transaction/trading. In other words, you need the help of a broker.

This needs to be done because the first thing you need to do is create an account with the broker. A broker can be said to be a company or individual that intermediaries between a bank or a major producer with a trader or consumer.

So, to make it easier for you to understand what is meant by a broker, you can refer to this article. So, read this article to the end, OK?

Definition of Brokers

A broker is an individual or company that intermediaries transactions between investors or consumers in the capital market. Why is a broker needed? Because consumers only accept orders from individuals or a company that is a member of the exchange. Therefore, a trader really needs the services of the members of the exchange.

Actually, the role of a broker is to make recommendations to investors based on an analysis of a trend similar to the market economy and the reputation of the company owner as well as information related to existing actions in the capital market.

This recommendation greatly affects a broker’s reputation. In other words, the more broker recommendations, the higher the reputation of a broker.

In Indonesian, a broker is also often referred to as a stockbroker and according to KBBI, a broker is an intermediary trader who connects one trader to another in terms of buying and selling or sellers and buyers.

In following the client’s request , the broker can also carry out a research, investment plan, as well as analysis of the stock market provided to investors. So, to become a broker, you must be good at observing the stock market.

Duties and Responsibilities of Brokers

In order to be successful, the main goal of a broker is to understand the client at a certain level, such as micro and macro. At the micro level, you’ll want to understand the goals and objectives for your existing business, but at the Macro level, you’ll want to understand how the project fits into them as a whole.

However, there are still some goals from another broker. This is the purpose of a broker.

1. Assessing Customer Needs

The duties and responsibilities of a broker do not go far from assessing customer needs. Yes, that’s right, because being a broker means having comprehensive insight into its products and services and providing advice to customers to understand the product or service that is currently needed.

2. Maintain Good Relations

In providing the best service for consumers, it can be said to be the main function of a broker. Of course, a broker must maintain good relationships, which means mimicking a customer need, identifying client problems, providing solutions, and assisting on a regular basis.

In building a strong relationship with clients so that they feel comfortable and being open and honest, proper and efficient communication is needed. That’s why the key to communicating clearly and consistently while being a broker is something that is very important and needs attention.

One of the best ways for a broker is to build a strong clientele by developing a reputation as an expert who delivers unrealistic results. In setting reasonable expectations, then you have to give yourself an opportunity to really impress the client and position yourself as someone who wants to continue working with.

3. Increasing buying and selling transactions

The next task of a broker is not far from increasing buying and selling transactions. This task is of course not easy because they have to educate the customer until the agreement has been made. On the other hand, a broker means that he has to make sure that there is no disappointment on the part of the party concerned.

Once done with the deal, a broker should be responsible for preparing and completing all existing paperwork required for the sale.

Although dealing with clients is professional, a friend-like approach is a very helpful step. This is because being a broker means being able to see personal fit.

You have to look confident because as a broker you have to be seen to radiate confident energy because clients can feel the enthusiasm and enthusiasm of the broker at work, so it makes people happy to be around him. Because in the end, the client will be happy to work with him.

4. Providing Educational Information

If the client isn’t well versed in your area of ‚Äč‚Äčexpertise, they may not be as knowledgeable about the process. This can make business processes stall due to ignorance. Therefore, a broker must start communication by providing information that is educational in nature so that it can help clients understand what the broker is doing.

To build a strong client relationship, the job of the broker must be trustworthy because the client will rely on you as an expert. That is why it is so important to have broad insights and angles in everything.

Types of Brokers

There are five types of brokers, here are the types of brokers and their explanations:

1. Retail Brokers

The first type is a retail broker, which assists an investor in receiving a commission from each transaction that is in accordance with the results of sales or purchases by clients

2. Full-Service Brokers

This second type is a broker that provides full services to investors or individuals who become their clients, such as providing analysis reports, providing information, carrying out client transaction orders, and providing options or steps that the client wants in a product.

3. Deep Discount Brokers

Of this third type, deep discount brokers have the job of making purchases and sales as well as managing client accounts.

4. Discount Brokers

This fourth type of broker provides services in the form of placing orders to buy and sell under the direction of the client and offers advice in the form of analysis reports and the latest information. Usually, investors who use brokerage services generally have basic knowledge of the capital market and can read the data provided by the capital market.

5. Online Brokers

This last type of broker, online broker is a broker that provides services through the internet network. With the rapid development of information technology at this time, more and more online brokers are interested because people are trying to transact with a small capital of only IDR 10,000. Because using the internet, transactions can also be done anytime and anywhere. In addition, the commissions paid are much cheaper than conventional brokers.

What are Forex Brokers?

After we get to know about the broker as a whole, now to focus more on a platform used for investing that is most in demand by the public, namely forex brokers.

A forex broker is a body that brings together individual traders and sellers to carry out a currency buying and selling transaction.

In this forex trading, there are no demands on one particular currency to be able to get profit. Apart from that, most importantly, a trader must be able to analyze the conditions in the market (supply and demand) and make the right decision when to buy or sell it.

Many people think that forex trading is the same as exchanging currency through an offline money changer. In fact, transactions carried out by forex traders are carried out online with the aim of making a profit.

How Does Forex Trading Work?

Basically, trading forex is quite easy to do. Moreover, at this time there are many platforms that provide facilities such as trading robots that help consumers who don’t have time to check market conditions or are beginners by analyzing the market with algorithms.

However, even though there is such a facility, you have to be very careful and ensure the results of the analysis because trading robots currently do not have legality in Indonesia and are at risk of lots of fraud or falsification of information.

Strategy for Making Forex Transactions

In order to avoid being scammed, you must be able to pursue this activity optimally and it is very necessary to fully understand how forex trading works. The following is a strategy for making forex transactions:

1. Get used to envy with existing investment instruments first

In general, these Forex traders have quite a long experience and ability in the investment world. The trader performs this instrument as a side profit addition by investing in a number of products such as Mutual Funds, Bonds, Stocks, and others. As much as possible, before trying this forex trader, you are advised to understand and familiarize yourself with investments in order to understand the risks and how to trade them.

2. Learn How to Trade Forex

After understanding and understanding how it works in the investment world, then start learning about how Forex trading works. You can learn more about forex trading by buying books or buying courses online.

3. Set up Cold Funds

Same with other investment activities. Try to do this forex trading using cold money, the goal is that financial conditions remain conducive and not risky which causes losses that can mess up financially.

Before losses occur, make sure to start trading with a small nominal fund first, for example 10-50 dollars. Only if you are familiar with how transactions work and find tactics to get more definite profits, only then will you be able to raise higher capital.

4. Choose a Trusted and Guaranteed Broker

This is no less important, make sure to choose a brokerage service that is trusted and guaranteed for safety. Check first whether the service is legal because in order to avoid the risk of existing fraud.

5. Maintain Attitude when doing Forex Trading

This last point may be very important, why? Because in trading it is very necessary to have a thorough, disciplined and consistent attitude in order to be able to get optimal results and minimize losses. Because ordinary traders must follow their emotional attitude more often and that is what causes big losses due to chaotic time management.

Risks When Trading Forex

If we talk about investing, especially in the world of Forex, we certainly won’t be far away from talking about risk. The following are the risks of forex trading, including:

1. Has a high risk

The first risk in the world of forex trading is that it has a very high risk when compared to other investment instruments such as stocks, bonds and mutual funds.

This high risk can be obtained because of the existing leverage system in Forex trading. The point is a system that allows its users to make transactions in large numbers even though they use small capital

2. Having currency movements that are very difficult to predict

In this second risk, currency movements are difficult to predict, because in general currency movements are very volatile. Therefore, before starting forex trading, it is very important for users to know about foreign currency movements well.

In the world of forex itself, there are many factors that can affect the movement of foreign currency itself, such as economic, geopolitical, and transactions that are being carried out.

3. High risk of fraud

In this third forex trading risk, there is a high risk of fraud. Because forex trading transactions are carried out digitally or online through internet channels, the transaction process which is carried out without a face-to-face process makes the possibility of fraud occurring higher.

4. Requires high enthusiasm and activity

In this last risk of forex trading, high activity and enthusiasm is needed, because this must be done so that you as a user or user can avoid the possibility of fraud. Therefore, in general, people who trade forex are also active in monitoring the market movements they are doing.

Tips for Choosing a Good Forex Broker So You Don’t Get Deceived

Below are tips for choosing a good broker so you don’t get fooled easily:

  1. As a trader, you should choose a broker that according to regulations can be adjusted to the deposit requirements that have been determined according to the amount of funds approved by the trader.
  2. Make sure the broker you use is easy to withdraw, not just easy to deposit money. Look for those who process deposits and withdrawals in just one day.
  3. Try to keep the cost of commissions, interest (swaps), and the difference between the selling price and the buying price, which is often referred to as a low spread. Because that determines the amount of profit or loss we get when carrying out trading activities
  4. Choose a broker with a large number of pairs. What are pairs? The pair can be said to be a pair of two different currencies, where one currency value is quoted by another currency, for example USD / JPY means USD as the base currency or first then JPY is referred to as the quoted currency. This will benefit traders if one of these pairs experiences a sideway condition or is called a market condition that tends to be full of doubts.
  5. Pay attention to the customer service provided. Generally, if a trusted broker will have services that can be accessed 24 hours a day, 7 days a day.

Closing

A successful consultant must be very quick to adapt to styles, formalities, and methods of communication and make use of emotional intelligence.

If you are already in this business, keep in mind that communication is key to building a trustworthy relationship and to talking to your clients to get a feel for what they value most and link preferences to workflows.

Thus the discussion about the broker to the types of brokers. Hopefully all the discussion above adds to your insight. So, do you want to become a broker?

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Originally posted 2022-03-07 00:49:53.

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