Sometimes people use words like ''big boys''.. ''smart money''.. but once in a while they also blame market makers for reasons why price did what it did. From what i understand they are forex brokers that operate through dealing desk.
"Let's say you place a buy order for EUR/USD for 100,000 units with your Dealing Desk broker. To fill you, your broker will first try to find a matching sell order from its other clients or pass your trades on to its liquidity provider, i.e. a sizable entity that readily buys or sells a financial asset.
By doing this, they minimize risk, as they earn from the spread without taking the opposite side of your trade. However, in the event that there are no matching orders, they will have to take the opposite side of your trade.
Read more: http://www.babypips.com/school/different-types-of-brokers.html#ixzz2EBNx9YuV"
Here is how i understand it and i would like to see some comfirmation/clarification.
1) In step two; if broker can buy cheaper and sell higher he will do it, MMs doesn't take positions vs. their clients on purpose if they can get some small profit immediately.
(That is probably not the way to maximize profit..(as they are paying some spread too) yet they don't care... they are happy with what they get...?)
2) In part 3 they are willing for their customers to be losers rather than winners yet they do nothing to affect prices (i mean no speculation in the big market).
3) I would like to grasp some idea of what is average daily turnover for some popular broker that is MM and
How much % approximately could go into each of these 3 sections (costumer-costumer - earn spread; liquidity provider; take oppiste side)
thank you
"Let's say you place a buy order for EUR/USD for 100,000 units with your Dealing Desk broker. To fill you, your broker will first try to find a matching sell order from its other clients or pass your trades on to its liquidity provider, i.e. a sizable entity that readily buys or sells a financial asset.
By doing this, they minimize risk, as they earn from the spread without taking the opposite side of your trade. However, in the event that there are no matching orders, they will have to take the opposite side of your trade.
Read more: http://www.babypips.com/school/different-types-of-brokers.html#ixzz2EBNx9YuV"
Here is how i understand it and i would like to see some comfirmation/clarification.
1) In step two; if broker can buy cheaper and sell higher he will do it, MMs doesn't take positions vs. their clients on purpose if they can get some small profit immediately.
(That is probably not the way to maximize profit..(as they are paying some spread too) yet they don't care... they are happy with what they get...?)
2) In part 3 they are willing for their customers to be losers rather than winners yet they do nothing to affect prices (i mean no speculation in the big market).
3) I would like to grasp some idea of what is average daily turnover for some popular broker that is MM and
How much % approximately could go into each of these 3 sections (costumer-costumer - earn spread; liquidity provider; take oppiste side)
thank you