What is liquidity?
In order to understand the role of liquidity providers in the forex market, it’s important to first understand the concept of liquidity. Liquidity is a term that is used to describe the ease of locating buyers and sellers in the market. Having greater liquidity facilitates easier transaction flow without any major impact on the exchange rates. On the other hand, low liquidity indicates higher volatility causing the prices to fluctuate.
Market liquidity impacts everything from the speed to open and close positions,slippage to difference in bid ask spreads. It is therefore clear that the role of liquidity providers is important to bring price stability in the market.
Who are Liquidity providers?
Liquidity providers function as intermediaries who enable traders to open and close positions easily without the need to find buyers and sellers themselves.
What are the best type of liquidity providers?
The top liquidity providers are called tier-1 liquidity providers. They connect a broker with giant commercial banks and funds which makes them capable of providing tightest spreads and faster execution to their clients. The broker who is connected to a large number of liquidity providers is considered better because traders may not face any gaps in the prices while executing trades.
You would be surprised to know that most of the brokers don’t like to share the information about their liquidity providers with their clients. Some brokers only share this information if the client wants to deposit a big amount and has provided the proofs for that.
However, here is a list of three best brokers who not only get their liquidity from tier-1 liquidity providers but are also transparent about this information:
1. TurnkeyForex
TurnkeyForex aggregates their liquidity from 20 tier-1 banks to provide best quotes.
Spreads: 0.0pips on ECN accounts,
Minimum deposit: $10
2. SageFx
SageFx is another best broker who gets their liquidity from tier-1 banks.
Spreads: starting from 0.1 pips
Minimum deposit: $10
3. AmegaFx
AmegaFx is also a tier-1 broker
Spreads: Starting from 0.0 pips
Minimum Deposit: No minimum deposit.
4. Coinexx
Coinexx too gets their liquidity from top liquidity providers
Spreads: starting from 0.0 pips
Minimum deposit: $5
I would suggest anyone using the scalping or intraday trading strategy to not overlook this important aspect in a forex broker. Because a lot depends on the spreads, which are essentially dependent on the LPs.
In order to understand the role of liquidity providers in the forex market, it’s important to first understand the concept of liquidity. Liquidity is a term that is used to describe the ease of locating buyers and sellers in the market. Having greater liquidity facilitates easier transaction flow without any major impact on the exchange rates. On the other hand, low liquidity indicates higher volatility causing the prices to fluctuate.
Market liquidity impacts everything from the speed to open and close positions,slippage to difference in bid ask spreads. It is therefore clear that the role of liquidity providers is important to bring price stability in the market.
Who are Liquidity providers?
Liquidity providers function as intermediaries who enable traders to open and close positions easily without the need to find buyers and sellers themselves.
What are the best type of liquidity providers?
The top liquidity providers are called tier-1 liquidity providers. They connect a broker with giant commercial banks and funds which makes them capable of providing tightest spreads and faster execution to their clients. The broker who is connected to a large number of liquidity providers is considered better because traders may not face any gaps in the prices while executing trades.
You would be surprised to know that most of the brokers don’t like to share the information about their liquidity providers with their clients. Some brokers only share this information if the client wants to deposit a big amount and has provided the proofs for that.
However, here is a list of three best brokers who not only get their liquidity from tier-1 liquidity providers but are also transparent about this information:
1. TurnkeyForex
TurnkeyForex aggregates their liquidity from 20 tier-1 banks to provide best quotes.
Spreads: 0.0pips on ECN accounts,
Minimum deposit: $10
2. SageFx
SageFx is another best broker who gets their liquidity from tier-1 banks.
Spreads: starting from 0.1 pips
Minimum deposit: $10
3. AmegaFx
AmegaFx is also a tier-1 broker
Spreads: Starting from 0.0 pips
Minimum Deposit: No minimum deposit.
4. Coinexx
Coinexx too gets their liquidity from top liquidity providers
Spreads: starting from 0.0 pips
Minimum deposit: $5
I would suggest anyone using the scalping or intraday trading strategy to not overlook this important aspect in a forex broker. Because a lot depends on the spreads, which are essentially dependent on the LPs.
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