Due to the growth of foreign exchange market, the liquidity providers(LPs) are also increased in the industry. It makes a little difficult for brokers to select from thousands of liquidity providers and to understand which one will work best with their platform. There are some facts which needs to consider while choosing a liquidity provider.
Reputation, regulation & transparency
Some liquidity providers can be vulnerable, for that reason, it’s very important to gather all the knowledge about liquidity providers you are planning to work with. It’s crucial to check their regulatory status complaints, reviews and other related questions before making the contract.
You also need to be clarified and be confident enough about which trading product you will offer before selecting liquidity provider. Because not all the LPs provides the services for every trading product such as cryptocurrency.
Know Your Clients
To increase the positive impact on the trader also improve their trading experience, broker needs to discuss their requirement about traders with LP and get to know are these services helps to grow trading or not. Price as well as type of business also matters in this case because if LP is expecting X value and broker will get Y value then it wont work.
Level of Services & Quality
Its very crucial factor to check the quality as well as the services of each and every LPs and make sure that its meeting your needs or not. Services like do broker will get access of LPs in particular time zone, will they provide 24 hours support and more.
Finally, some terms and conditions of Liquidity providers are needs to review before signing any contract. It’s better to have few other LPs contracts with you to compare effectively and choose wisely. These are the basic guideline for the brokers who are looking for Liquidity Providers with their specific requirements.
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