5 Tips For Selecting a Liquidity Provider

Reputation, product availability, and trading conditions are some of the factors to consider when choosing an LP.

Due to the maturity of the forex industry, there are now many different LPs (liquidity providers) that brokers can select from. Similar to shopping for clothing, there isn’t simply a one-size-fits all solution; each case depends on the unique needs of your business. With many providers and offers to select from, it can often be difficult to decide which is the best LP to work with. To offer some guidance, we’ve outlined what we feel are the most important criteria:

#1 Reputation, Regulation, and Transparency are Key

We intentionally made this our top consideration because nothing matters more than the level of trust you have in the partner you work with. Just because a firm is a liquidity provider, doesn’t necessarily mean it isn’t vulnerable to bankruptcy. For this reason, it’s crucial to do your homework on the LP you decide to work with. Check out their regulatory status, complaints, and anything else questionable before signing paperwork.

#2 Product Availability

It’s important to decide which trading products you’d like to offer before choosing an LP. Recently crypto currencies have been very popular, but not all LPs have begun offering this service. Would that be a deal breaker? What type of non-forex products, like diamonds, stocks, or energy are you looking to offer? Is there a certain region you wish to target?

#3 Know Your Clients

To ensure a positive trading experience for your clients, it’s important to be up front with your LP about the type of traders you’ll be targeting and bringing. The reason this matters is that the pricing and other conditions are based on the type of business you are running. If an LP is expecting X and your broker delivers Y, it can result in execution and other problems for your clients.

#4 Level of Service and Quality

Although this appears obvious, it’s important to ensure the type of service offered by the LP meets your needs. Do you have access to an account manager on your time zone? If you need 24 hour support, do you receive that with your current offer?

#5 Conditions

Finally, the specific conditions offered by the LP are important to review before signing up. It’s suggested to have a few offers in mind so you can better compare and contrast.   In addition to these basic guidelines, Atomiq Consulting is able to assist you in selecting the best liquidity provider for your specific needs. Don’t hesitate to contact us for a free consultation.  

Have a look at some of the additional services our clients have found to be helpful in the growth of their business.



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