Forex retail trading is a very small market compared to the retail stock market. The difference is huge, however the Forex market has larger profit margins for the brokers involved.
As a retail trader, one will notice the trading conditions are the most important factor. For example the spread, the leverage, the price guarantees if any. Let’s talk a bit more about spread. The spread is the difference between the buy and the sell price, so in other words this is the profit for the brokers.
In forex the spread is the broker’s profit, compared to stocks where the spread is not controlled by the broker but by market forces. Some forex brokers have also been moving to the model of fees, where they let the spread be decided by the market but then charge you a fee on top of it. Either way, forex trading is a very lucrative business for the forex broker.
There is another important factor, forex trading rebates, this is provided by a 3rd party referrer, for referring clients to a forex broker. Party A refers client Mr.B to a forex broker, so party A is entitles to receive rebates for the trading activity of Mr.B. Those rebates could then be shared with Mr.B or simply kept by the referrer.
So who is the referrer? A service ran by FxRebateGurus.com does exactly what we explained, they share the revenue they receive from the forex brokers with the client. How much you might ask is there to share? Well quite a bit of money is involved in the referral business, a broker could pay anywhere up to 1-1.5 pips per trade to the referrer, which is then shared with the customer. A typical customer could make anywhere from $100 to $250 per month. Some would make a lot more, as high as $2000-$3000. It all depends on the number of lots traded. The service is totally free and there is no extra risk involved in taking part of this forex trading rebate service.