An introducing broker (IB) is a person or company that refers clients to a brokerage and earns a commission for doing so. While the IB does not handle trade execution, they support clients with onboarding, education, and localized assistance. The broker manages all trading and back-end operations.
Key Takeaways
- IBs connect new clients to brokers and earn a percentage of revenue.
- Brokers handle trades, platforms, and risk management, not the IB.
- IBs often help clients understand platforms and trading basics.
- They speak your language, understand your market, and offer tailored service.
- IBs earn a share of spreads, commissions, or volume-based revenue.
What an Introducing Broker Does
An introducing broker acts as a middleman between a trader and the main brokerage. Their job is simple: refer clients and provide front-end support. They don’t execute trades or offer direct liquidity; that’s the brokerage’s job.
What IBs do is build relationships. Whether they’re working independently or running a small business, they help new traders open accounts, understand the trading platform, and get started with confidence. Often, they provide valuable educational content, webinars, and even one-on-one guidance.
Many successful IBs develop niche communities like regional WhatsApp groups or Telegram channels where they post signals, news updates, or platform tutorials. Their earnings come from commissions paid by the broker when referred clients trade. The more the clients trade, the more the IB earns.
How Introducing Brokers Earn Commissions in Forex
IBs get paid by generating trading volume. Each time a referred client opens and closes a position, the broker earns from spreads or commissions. A portion of that revenue is shared with the IB.
For example, if a broker charges 1 pip per trade and the IB has a 40% deal, they earn 0.4 pips per lot traded. With active clients trading 10–50 lots weekly, earnings can scale quickly. Some brokers offer tiered rewards. The more volume, the higher the share.
Top brokers, like Defcofx, even provide dashboards for IBs to track their earnings, referrals, and performance in real time. Most IBs build client trust through support, and when clients stick around and trade actively, it creates a win-win.
Benefits of Working with an Introducing Broker for Traders
While traders could open accounts directly with brokers, going through an introducing broker offers perks. Many IBs provide added value like:
- Local language support
- Platform walkthroughs
- Educational videos or PDFs
- Fast-track onboarding
- Personalized updates or tips
In some cases, IBs offer rebates which is a portion of their own commission paid back to you. This gives traders an edge in lowering costs.
Also, new traders often feel overwhelmed with platform settings, lot sizes, or withdrawal methods. A helpful IB can make this learning curve much smoother.
Differences Between Introducing Brokers and Full-Service Brokers
| Feature | Introducing Broker (IB) | Full-Service Broker |
| Client Interaction | Front-end onboarding & support | Full platform + trade execution |
| Execution of Trades | No | Yes |
| Commission Source | Referral commissions | Spreads, commissions, markups |
| Regulatory Licensing Needed | Only for marketing/education (in most cases) | Must be fully regulated for trading services |
| Capital Requirements | Very low or none | High (infrastructure, risk management) |
In short, IBs act like business development reps by building trust, driving referrals, and educating clients while the broker manages all trading activity, compliance, and client funds.
Want to earn commissions while helping others learn forex? Defcofx offers a great IB program with fast payouts, multilingual support, and a trusted platform.
Join the IB Program
How Banks Participate in the Interbank Forex Market
While retail brokers operate on platforms like MetaTrader, banks interact on the interbank market, which includes large financial institutions like JPMorgan, HSBC, and Citibank. This is where massive forex orders are processed directly between counterparties.
Banks execute trades through electronic communication networks (ECNs) or private dealing desks. They quote bid/ask prices to one another and act both as buyers and sellers to provide liquidity.
IBs operate several layers below this ecosystem. Their clients trade on retail platforms, but through them, they indirectly access pricing and execution that trickles down from the interbank market. This structure allows even small traders to participate in the world’s largest market.
Real-Life Example of How an IB Adds Value
Let’s say you’re a beginner from the UAE who wants to trade forex. You find an English-only broker website confusing. You stumble upon a local IB offering account setup help in Arabic, tutorials via Zoom, and fast WhatsApp support.
You sign up through their link. Every time you trade, the broker shares part of its earnings with the IB, but you pay nothing extra. In return, you get guidance, resources, and peace of mind.
This is a perfect example of the mutual benefit behind the IB model.
Final Thoughts on the Role of an Introducing Broker
The role of an introducing broker in forex is crucial for bridging the gap between traders and brokers. They focus on building relationships, offering support, and guiding clients through account setup and platform navigation, while the broker handles everything from execution to security.
Brokers like Defcofx enable IBs to succeed by offering transparent commissions, real-time tracking dashboards, and 24/7 multilingual support. Whether you’re a trader looking for help or someone who wants to grow a forex business, working with or becoming an IB can be a smart move.
Become an IB with DefcofxFAQs
IBs earn a portion of the trading fees paid by clients they refer to a broker. The more the clients trade, the more the IB earns. This is often on a volume or commission-sharing basis.
Yes, especially if you build a loyal client base. Some IBs earn thousands monthly by serving 50+ active traders who generate consistent volume on the broker’s platform.
In most cases, no, unless they give direct trading advice. IBs focus on education and onboarding, not regulated financial advice. However, laws vary by region.
IBs help with account setup, platform tutorials, education, and ongoing support. They’re your first point of contact before reaching the broker’s main customer service.
Yes. IBs represent specific brokers but won’t control your account. You maintain full access and can trade normally. The IB simply helped you register and start.
Affiliates typically drive traffic through links or ads. IBs go further. They build personal relationships, onboard clients, and offer education or support.
Yes. Defcofx offers a transparent, high-paying IB program with real-time dashboards, multilingual support, and fast commission payouts. They are ideal for growing your own trading network.
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