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CAN FOREX BROKER DO NOT DROP CUSTOMER TRANSACTIONS

  CAN FOREX BROKER DO NOT DROP CUSTOMER TRANSACTIONS
Whether the broker deals a transaction on the interbank market or not - a question that interests many traders. But at the same time, not everyone fully understands what interbank is, why it is necessary to deduce deals there and what it gives to users. And also whether a company from the Forex brokers rating can not deduce transactions of customers to interbank and why it is important to know about it. In this article, we will try to fully answer all these questions.

WHAT IS THE INTERBANK?
"Interbank" is a worldwide network in which banks (including Forex banks) and other major participants trade currencies among themselves. But traders changed this concept a little and called the interbank not the network itself, but its participants - banks, investment exchanges, large brokers and other large financial organizations. Which in fact is more correctly called "liquidity provider" - liquidity providers.

They are called liquidity providers because they have enough capital and can process almost any number of applications. Due to this, transactions are processed very quickly and are executed at the price closest to the market, that is, with high liquidity.

WHY SHOULD THE BROKER BREAK THE DEALS ON THE INTERBANK?
With that, who such suppliers of liquidity have understood, we go further. Why do they need a broker and what does this give the trader?

Honest brokers trading in the Forex market earn exclusively on spreads and commissions, so they are most interested in having traders traded as much and longer as possible. Therefore, they try to provide them with the best trading conditions.

Do it yourself, almost not realistic. At least because, independently accepting applications of traders, the broker is forced to send the same application to the interbank, wait for an answer from them and then broadcast it to the client. This causes delays in opening transactions and not only. By deducing transactions directly to liquidity providers, the broker avoids all these problems.

Moreover, since there are many participants in the interbank foreign exchange market that offer different prices and process applications at different rates, the trader has a greater choice. Due to what he gets really favorable terms of trade:

The best prices for buying and selling.
Minimum spreads.
High processing speed of applications.
Absence of slips and requotes.
As a result, everything is in the black. Brokers retain and increase the customer base, and customers receive good trading conditions.

HOW TO CHECK THE BROKERS OF THE DEAL TO THE INTERBANK
The main problem is that almost all companies say that they withdraw applications of traders to liquidity providers. But to determine whether this is actually a request for data about which of the counterparties the deal was made with is quite difficult.

First, brokers can say that this information is a trade secret. And secondly, they can provide such information if they want, but this does not mean that the deals were actually being withdrawn to the interbank market.

Therefore, it is important to choose reliable brokers, such as AMarkets, who do not hide their liquidity providers and provide the necessary information without problems. Moreover, they have official documents that confirm the broker's cooperation with the specified supplier or liquidity providers and are proof that all traders' deals are actually being withdrawn to the interbank market rather than spinning inside the company.

If the company for any reason can not provide such data, it is possible to try to determine whether the broker issues a transaction to the interbank market by indirect indications.

Regulation of the company
If the broker has a license from a serious regulator, then all applications must necessarily be displayed on the interbank market. This is stated in the annex to the conflict of interest agreement. But it is worth considering that there may be a license, for example, Mauritius, where the regulator has no control over the companies and they can do anything. Therefore, pay attention not only to the availability of a license, but also to its quality.

Technology providing quotes
Often you can meet the complaints of traders that the broker prices are very different from others and then he responds that this is his supplier of quotations. But most likely, quotes are simply twisted. Since companies using ECN technology do not have such a problem.

ECN brokers supply their users with quotes and spreads without change. Moreover, they give traders the best quotes for buying and selling from the entire flow of quotes from liquidity providers. For example, the Bid price can be from one bank, and the Ask price from another. As a result, the client has the best prices and the minimum spread.

Quality of execution of applications
Normal companies, as a rule, do not have requotes and slippage. ECN brokers process orders directly with very high speed, which completely excludes slippage and accordingly, deals are concluded instantly.

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