How do forex brokers work? Do they really transfer their clients' money to the interbank foreign exchange market or work on the principle of "kitchen"? In fact, there are three models of forex brokers: A-book, B-book and mixed. Let's figure out what is their difference, and what are the pros and cons each of them carries for an ordinary trader.
Before analyzing the specifics of brokerage activities and looking for the benefits of each of the above types, it is advisable to familiarize yourself with the history of the Forex market, because it is this information that will help you understand the important subtleties and nuances of many modern trends and current processes. Forex, as we know it, emerged rapidly after the end of the procedures related to the cancellation of the Bretton Woods agreements, as a result of which the US government announced its refusal to exchange dollars for gold, refusing to comply with a fixed proportion. In parallel with these events, the authorities of many developed countries notified the public of the signing of an agreement, according to which the range of exchange rate fluctuations of other national currencies against the dollar expanded significantly.