Tips To Choose The Right Liquidity Provider For Your Forex Brokerage

[azeeem65]

Which I learn in my whole trading let me share with you.

Choosing a right Liquidity Provider for your forex brokerage is highly essential. Liquidity though is one of the most common words used in the financial market.

Liquidity for sure is the biggest factor to understand about in the Forex industry as the transactions will be more productive and you will be one of the top brokers with deeper liquidity.


Let’s understand few important points to keep in mind when you are looking for a liquidity provider:

Slippage:
In the forex market, slippage normally occurs when volatility is high, as per the news events or even during times. Regardless of the size of your company, a forex liquidity provider which can provide data on negative and positive slippage will add high value to your FX trading.

Technology Provider:
Always go for the Liquidity Provider who offers various technical support such as MT4/MT5 bridge connections, FIX protocol and APIs, etc. Choosing the right provider for yourself will let you experience the best in the market.

Price:
The pricing offered by a liquidity provider should always be looked at. Since the spreads provided by your liquidity provider in the low commission-based market should be competitive spreads. This is very critical as one of the most important things to take care of is price. A good price hack will make your business boom, so keep this point in your mind before going to any liquidity provider.

Security:
Keeping your clients funds safe is a very big concern. It is therefore your duty, as a good forex broker, to guarantee that the funds are kept secure. Prior to actually entering into business, please make sure that accountability is upheld by the liquidity provider you are entering to be in business with and that he must also have a strong market history. It is the hard-earned money of your client, so it is solely your job to take care of the wealth of your client.

Authenticity:
Having a liquidity provider that is both controlled and genuine is very essential. Cross-checking and having the license of the liquidity provider checked is very necessary.

 

[bottomhigh]

Which I learn in my whole trading let me share with you.

Is it possible to tell apart NDD, STP and ECN brokers? Or we can get only indirect estimates of their execution models?

 

[Enivid]

Is it possible to tell apart NDD, STP and ECN brokers? Or we can get only indirect estimates of their execution models?

For European brokers, STP model can be detected by their type of their brokerage license. STP license is different than the Market Maker license (and, by the way, costs less). Another indirect evidence is commission for trading - market makers never rarely charge commission for trading (in zero-spread accounts only?) whereas ECN brokers wouldn't be profitable without such commission. Finally, ECN/STP brokers shouldn't generate requotes - your orders have to execute with a slippage instead of being rejected with a requote.