Skip to content

When buying and selling things like currencies, buyers and sellers typically go to brokers. Your relationship with the market is mediated by the forex broker. In other words, a broker will connect you with the appropriate seller or buyer if you need to discover a buyer or seller of currencies. However, they also act as a middleman between you and a person who is referred to as a "liquidity provider," in addition to serving as a middleman between you and another buyer or seller like us FXCM as the reliable broker for Forex app Malaysia.

Liquidity provider
We'll start with the fundamental concept of liquidity before elaborating on liquidity suppliers. Let's imagine you wish to buy a specific amount of a given currency by exchanging money.

There must be someone selling that currency to you in order for you to purchase it. Someone must be prepared to purchase the currency from you in order for you to be able to sell it.

You will probably be able to sell if there are lots of buyers for the currency you are offering. It is more likely that you will be able to buy the currency you want if there are numerous people selling it. The market is referred to as "liquid" when there are many buyers and sellers present.

A market can also be liquid in another manner. Consider a situation in which you want to purchase currency but find that there are fewer dealers of bigger sums of currency than there are sellers of smaller amounts. Market trading is still active. Massive banks or other financial institutions that conduct extensive currency trading are the sellers who are selling in such large quantities, and they are referred to as liquidity providers since they are genuinely supplying liquidity in the markets.