Five Main Points to focus before Choosing a Forex Liquidity Provider?

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types of liquidity providers

In the Forex Market, Liquidity providers are the main key players they keep the market alive. There are different types of liquidity providers. Keeping up with this tradition, FX market participants(Fx Brokers) are evaluating their business relationships and analyzing the return and quality of the services provided to them.

If you’re a forex broker or Entrepreneur, have been looking for liquidity provider then this article is for you. Here, are the five main points to consider before choosing a liquidity provider.

Ⅰ. Overall Cost.

Whatever the business you do, the cost of expanse decides the possible profit-making ratio- cost matters. In forex brokerage, performance is directly correlated to your commission/spread expenses (average executable spread, slippage, rejection ratio). The easiest way to check the performance of your LP is to run daily or weekly execution reports on different currency pairs. While the majority of the volume is going through in EURUSD and GBPUSD, it’s also worth checking the likes of spot Gold, Platinum, and some of the active crosses as well.

** Please remember that you can overpay a lot in slippage and rejections without realizing it.

Ⅱ. LP Behaviour.

Not like the other market, forex LP could manipulate their clients account for profits this can make you lose. For instance, market crashes, high market volatility or unexpected market moves would unstabilize market happenings. If your LP fails to support or disconnected from the market activities then its a threat for your Business. It’s very common this too ends in disaster for many businesses.

Ⅲ. Industry Reputation.

Reputation is not just a number or status, it’s a rating/opinion given by the clients for what they experienced with the LP. A good reputed LP will stand for the client’s needs/requirements. Annual reports, mergers, investments, press releases, and changes on the executive level are good indicators of company health(LP).

** If you get two or three warning signs indicating problems with your LP then it might be time to search for an alternative partner or a backup solution.

Ⅳ. Technology Master.

Forex market is a technically growing market, day-by-day the growth reaching its new height-Technically. Being with modern updated technology is the turn-key to survive in the Forex Market. If your LP doesn’t have the modern technology or using the third-party service then its time to find someone who is more passionate about modern trading technologies.

My advice is to do research on the technology provider and platforms used to facilitate trading. Also, if you are not offered full market depth and not educated on the frequency of the received quotes, you may be using outdated technology.

You must also be able to settle open exposure via a reliable, tradable interface, independent of MT4 or MT5 Platforms.

Ⅴ. Support.

Real-time customer support for all kinds of quarries is a reliable source to trust an LP. When all of your queries were answered in a single touch, what else you need?


If you are planning to set-up a brokerage firm then these are the points to consider before choosing the LP. Choose the best Provider to shine your business. Try Launch Best Liquidity Provider.

If you are like to know more about this topic, contact us. We’re happy to help you out to get the Best.

If you want to know more about forex then read this

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