I’m a newbie in forex investment. When learning forex knowledge, I got confused by the concept of “liquidity” and the connection between liquidity providers (LPs) and brokers.
Would it be better for a broker if it can access more LPs? I mean, if so, the broker can provide more choices for customers, so that orders can be executed more efficiently. Am I right (Maybe more LPs indicate more expenditures for a broker. I don’t take this into consideration)? How many LPs would a broker choose? What are the factors that should be taken into account?
Are you having problems with order execution from your broker, like delayed orders or too much slippage?
Having multiple LPs is a plus point for the broker and the trader also as at signifies that you will get the accurate market price, however, the LP charges the fee for their service so practically for a broker 2 or 3 tier-1 LPs are sufficient.
Which country are you from? Trying to figure out if I even know my broker’s LPs o_O
For us armchair speculators, your broker is his own LP. He sets the price, he takes your contract, he sits on the other side. Don’t believe the hype otherwise
This is an old thread but FXNET_LTD makes a reasonable point about obtaining details about the LP of a broker before making a choice.
Thank you. It seems like brokers would seek an equilibrium in brokerage service, between faster execution and cost.
Thank you for referring this article. But the passage didn’t tell us how to find the number of LPs. We still have to ask one by one, if I have enough time to compare several of my favorite brokers. LP is an important indicator, at least in my opinion.
You’re putting the cart before the horse bro. Your retail broker is under no obligation to inform you whom their liquidity provider is. As previously stated to which I think you have ignored, your broker is his own liquidity provider. Your OTC contract is with him. You are at risk that they might just not be financial to pay your return if your lucky enough to get one. A good retail broker will disclose that fact, but again none of them are under any obligation to disclose the nature of their business operation to you.
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Right, because he wants to serve his client with better services and at the same time he has to minimize his operating costs.
LOL, honestly cobber, your broker has your best interest at heart???
Hahha if he wants to survive for a longer term in the market then he must work in the interests of the client.
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My broker handles 1/2 trillion $$$ each n every month. I’m sure he is very concerned with my $2G account and 0.05 lot trades.
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Yeah, but still each and every customer is a valuable asset for the business. Otherwise your point is also valid, no one cares about others.
That depends on the broker. Some brokers would just relax and take trading fees from both side. All they provide is the platform and LPs. I am more comfortable with such brokers.
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Yeah, that is the kind of brokers I was talking about!