2 questions on how forex brokers work

Discussion in 'Trading' started by joebann, Jul 15, 2007.

  1. joebann

    joebann

    1. How much volume moves the forex market 1 pip through a retail broker?

    Does anyone know in order to move the forex market 1 pip, (say on EURUSD with a retail broker), how much volume would need to go in at a specific price point?

    To contrast with the stock market, if we look at a thinly traded stock, buying a few hundred shares may be enough to move the stock up a penny.

    How does it work with forex?

    (In other words, if 1000 people with $10,000 each used 100:1 leverage to buy 10 contracts at a given price, would that market move up, or would it not even react as that volume is nothing for the forex market?)

    2. How do retail forex brokers fulfill orders?

    If they are taking the opposite side of the trade, do they simultaneously close out their side of the trade by offsetting the trade somewhere else? Or do they hold onto that trade and close it with the next brokerage customer that is trading in that direction?

    If anyone has any insights, or can direct me somewhere I can find the answers, it's appreciated.

    Joe