Yes you only trade with people that have accounts with you. Bank trader has to consider their existing reserves, how much they can get in interdealer and swap markets, where they can source liquidity from etc. they may need to temporarily be short the underlying currency, etc. Note: in real life bank traders are not really taking risk in spot (outright long or short a currency). They are mainly long positive carry and and short negative carry to generate some carry spread, while being hedged outright delta. Corporates, institutional investors, and speculators all trade through a broker. So the broker can see information on flow in aggregate. Imagine you’re a car dealer and you’re noticing a lot of bids on a certain make and model.. you can share that information with a buyer/seller who is also interested in that make and model. Dollar-Nokkie is trading lingo for usd to Norwegian krone.
How do big corp Y or big corp X decide which big bank to open an account to? Do they open one on multiple big banks? That would make sense from an opportunities standpoint for big corp. Right?
Yeah you’ll typically have at least 3 broker relationships (sometimes this is mandated by board of directors), though a primary bank with whoever hands your corp bank accounting needs (called treasury services).
What's a typical set of criteria big corps use to choose one big bank over the other? What's an example of "treasury needs" beyond the "can I get some nookies for our new warehouse we're buying over there please"?
Haha the nookie thing is just trader lingo for usd/krone. And you’d always say “dollar - nokkie”. Corporates choose banks for a variety of reasons. Bank offerings are relatively the same within each tier of bank (regionals, nationals, money center/int’l). Relationships are usually a big driver. Think about all of the bank accounts a corporation will need and services around those accounts (payroll, processing, lines of credit, credit facilities, etc.).
skinny, start with the favourite strategy and one major. The majors are highly correlated and there are basically only two strategies so the task is not too intimidating. You will never need 30 markets on your watch-list because you will never be able to wring the maximum profit from 29 markets so that you need and extra one to achieve your financial goals. So the reward is small and diminishing. The risk however grows logarithmically as each market is added and as work-load increases.
I chose pairs for trading based on tight spreads and not strong volatility. That's why I trade majors, mainly EURUSD and GBPUSD.