Where do retail traders orders go?


I searched a lot about this and everywhere it’s said that it’s going to the liquidity provider(throughout the broker) and the liquidity provider is in the hand of the banks. but don’t banks trade forex but us the retail traders trade CFD’s? we trade different kinds of Property than the banks it’s so illogical to me. so is retail trading just between retailers(and market makers and brokers) and the liquidity provider is the agglomeration of retailers CFD’s orders (and the brokers also)? and who is the actual liquidity provider for retailers?

and another question is who is the liquidity provider of the banks?

thank you in advanced

You have explained the entire thing in the simplest way possible. Yes, Liquidity provider is not any bank in particular. They are just the medium to provide liquidity in trade orders. They can be banks, financial institutions etc

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thank you but I just want to know how exactly does this market work it’s so confusing.
I can’t find the link between the liquidity between retailers and the liquidity that banks need for trading

thank you
yes but the bank’s orders is in forex and the retailer’s orders are in CFD’s right so this are two different things so how this two different kind of liquidity is provided?

I think, @arman0077, that you are confusing real money that the interbank market trades with and nominal money that the retail trade industry trades with. As retail traders there is no currency money at all changing hands, we are only taking “bets” if you like about which direction price is going to move.

The interbank market is trading constantly. making price markets in all markets, i.e. offering both bids and offers. They trade with each other and with their clients and other customers. They also make prices for the retail brokers, which form the benchmark prices that the broker then offers onwards to its own customers.

But there is no currency changing hands with the broker. We just take a view of price for a nominal sum (e.g. one standard lot) and then settle the difference in price when the position is closed.

In other words we bet that the price of two oranges will rise from the current price of $1 per orange. We later close the bet at a new current price of $2 per orange. So we win $2 on the deal for 2 oranges - but we never actually bought any oranges, nor did either we or the seller even own any oranges…

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I cant understand how the banks make the liquidity for the brokers when there is no currency changing?

In its simplest form, liquidity just means that the banks always quote a bid/offer price. If a broker has several liquidity providers then there will be small variations between them and the broker can use the best bid/offer from them to form the basis of the price it then offers to you.

They can only do this if they have a price. In many cases your broker will not even pass your trade through to the providers and will remain itself as the counterparty to your trade, which is just a bet between you and your broker where the price will go next. Get it right and the broker owes you, get it wrong and the broker collects from your account. The liquidity provider has done nothing more than provide the core price.

ECN and STP are different. But that is something else.

You can find a lot of info and explanations about these things on internet that might help more.

You are most welcome! its not like bank orders forex and retailers orders CFD’s, it looks like you are getting confused with that is the main purpose of liquidity providers. Check out this link, it might help you. We can discuss it further. What is a liquidity provider? | FIA

thank you a lot
I am reading a lot coming back soon to ask my questions

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Sure… Give as much time as possible to learn your basics.

When you lose your money, there is always someone who is making money including investors, speculators, banks, institutions, etc.

No matter what, the trading system that you use while trading has to be reliable. Go back in time and measure all your trades. Get an idea about how profitable your winning trades were and how much you lost in your losing trades. This will help you in calculating expectancy and can also help you determine how much you should risk per trade.