Forex Liquidity means the degree to which a currency can be bought or sold in the forex market without affecting the the quoted currency's price. As forex market is an Over The Counter (OTC) Market (which you are not dealing directly with the exchanges), the complexity would means how possible your broker obtain enough relationship with multiple banks that facilitate the buy and sell volume requested by the clients. The limited liqudity by certain broker will therefore causes the order rejections and slippage.

A high level of trading activities contributes to high liquidity - this is especially working well with Electronic Communication Network (ECN) forex brokers. In a high liquidity forex market, a currency can easily be bought or sold, therefore terms as liquid currency. In forex market, a highly liquid currency usually referring to the major currencies such as USD, EUR, GBP, CHF, JPY, AUD, NZD, CAD which form the currency pairs.

The highly liquid currencies also allow you to convert an asset (open position in market)to cash (close an order) quickly, therefore you have less worries of your assets depreciating in value when the market go against you, but you couldn't find a buyer or seller to close the deal. Hence many traders prefer to trade the highly liquid currency pairs such as the EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, EUR/JPY, GBP/JPY, EUR/GBP etc. These currency also have a lower spread compare to the less liquid currencies / exotic currencies pairs such as USD/AED, USD/ARS, USD/BRL, USD/CLP,
USD/CNY, USD/CZK, USD/EGP, USD/HKD, USD/HUF etc.

A closer understanding on the market execution technology such as the dealing desk, non-dealing desk, ECN and Direct Market Access (DMA) before we are certain that our order reach to the forex liquidity providers. As you are trading an OTC market.

As we know in the early days the forex market was dominated by the bankers and other financial institutions. These parties act as the sell-side of the currencies and provide the liquidity to the market for buy-side such as the hedge fund managers, traders etc. Today although the forex market is still dominated by them but more retails forex broker have seen the lucrative revenue by allowing the retail forex traders to get access and trade in the forex market as well.

Most forex brokers realize the lucrative revenue potential by providing a market demanding platform such as the Metatrader, but a forex brokers who is genuinely intended to work for their clients should demolish the dealing desk and go for more forex liquidity providers, forex liquidity providers are the financial institutions in the sell-side includes Citibank, Bank of America, Barclays Capital, Commerzbank, BNP Paribas, Deutsche Bank, J.P. Morgan, Morgan Stanley, UBS, Nomura etc.

Submit your request now and we at INFINITE FX can provide you with additional 12 forex liquidity providers for your Metatrader Server to add to your Metatrader Liquidity and DMA access to the forex market, this helps to keep you from requote, slippage and rejection and a happy trading experience for your clients - which is inevitable in a higher competitive market now.