What is an Introducing Broker?

Forex Introducing Broker Guide

The term "Introducing Broker" or "IB" (also known as a "Referring Broker") comes from the commodity futures market. The simple definition refers to a broker or referral agent who introduces futures business to a brokerage firm and is compensated for the business or transactions generated by these referrals.

Since the mid '90s, the term has become a lot more popular in the spot Forex market because of the rapid growth that foreign exchange (or "FX") has experienced. Since that time, many individuals and organizations have tried their luck at the IB business — and crashed and burned in the process. Many thought that because Forex was the "sexy" market to be in, their success was guaranteed.

It's really not that simple. Becoming an Introducing Broker is easy, but running a successful IB business takes prudent planning and good execution.  It’s very important that you follow the recommendations laid out in this guide — that is, if your goal is to experience ongoing and long term success.

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