Agency Model in Forex
A clear definition of Agency Model, with practical context for reading markets and making better trading decisions.
Definition
Definition
An agency model is a brokerage arrangement in which the broker acts mainly as an agent for the client, routing or arranging the order with another market participant rather than taking the trade as its own principal position.
How It Works
Electronic markets separate the price you see, the instruction you send, and the final execution you receive. Available liquidity, order type, venue rules, and market movement can all affect what happens between those steps.
Why It Matters
This vocabulary lets you read a broker or platform screen accurately. The goal at Level 2 is mechanical literacy - knowing what a displayed price, order status, or execution record means - rather than predicting the market.
Key Takeaway
An agency model is a brokerage arrangement in which the broker acts mainly as an agent for the client, routing or arranging the order with another market participant rather than taking the trade as its own principal position.
Practical forex example
Why Agency Model matters
Understanding Agency Model helps traders interpret market information, plan decisions, and manage risk with more context.
Related forex terms
Turn the definition into trading skill.
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