Recently, Tianyan Jun found that the market often appears those who use 5 million US dollars to recruit professional technical team, 10 million US dollars to recruit technical team banner, according to Tianyan Jun understand that they are advertised to open the liquidator of LMAX, need the trader after the funds, and finally the account funds to the trader. Just happened to have talked to others about liquidation recently, so let's talk about what is bridge and what is liquidation?

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What is bridging?

In fact, for Forex brokers, Forex trading platforms, liquidity providers and customers are all crucial. A platform with rich features, smooth service and strong liquidity can attract more customers for brokers and is an important factor in determining the strength of brokers, and bridge technology is the key to connecting these three.

We will temporarily divide forex brokers into two types, one is the broker with trader platform, traders' orders can be digested internally, and the other is the broker without trader platform, then it is necessary to use bridge technology to connect customer orders to liquidity providers.

Generally speaking, "bridge" is a bridge, and "connection" is a connection, so bridge technology is a bridge of connection. The two sides of the bridge are traders' orders and liquidity providers. In other words, if a trader places an order on the forex trading platform, its order will be "bridge" to the interbank forex market for matching and return to execution.

Bridge technology currently has two models: STP (straight-through processing) and ECN (Electronic Trading Network), the former is to direct traders' orders to the liquidity provider, the latter is to throw traders' orders to the platform composed of liquidity providers and other relevant institutions for optimal matching and rapid execution. So regardless of the model, bridge technology provides traders with strong liquidity and the ability to connect with the best price and spread at the time.

There are many services that bridge technology can provide, almost as follows:

First, bridging technology allows traders to pair their orders with several liquidity providers. Traders can choose the most suitable clearing counterparty, get the best quotes and spreads, and flexibly configure according to their own needs.

Second, bridging technology can be optimized for traders. For example, in the many clearing prices provided by the counterparty, it provides the best trading price and trading method for the trader, optimizes the trader's instructions and so on.

Third, bridging technology can also provide traders with a lot of choice and room for manoeuvre. Its traders can choose the currencies they want to liquidate, and can set their own orders such as limit prices and stop losses. Not only that, the bridge technology can automatically configure reports.

In general, good bridging technology should be able to provide a more flexible and stable service, and the other end of the bridge should also be able to connect with greater mobility. In addition, in the process of the development of bridging technology, some bridging companies have developed some other features to meet the needs of broker customers. For example:

1, can filter: according to the configured currency varieties, formulate users and user groups, etc., to determine which need to be cleared, which do not need to be cleared;

2, multiple channels: designated clearing counterparties, provide multiple simultaneous clearing technology;

3, optimize the price: according to the price of the clearing party, specify the way to the customer's transaction price;

4. Order mode optimization: conversion and execution optimization of limit orders and stop loss orders;

5, large transaction optimization: large number of transactions when the order split, batch execution, etc.

So what is forex clearing?

The settlement of foreign exchange funds is a process and method used by international and domestic banks to settle the creditor's rights and debts in international settlement and payment through accounts and relevant monetary transfer systems.

In addition, the settlement of foreign exchange funds consists of three parts: the settlement of foreign exchange funds by overseas banks, the settlement of foreign exchange funds by domestic banks and the settlement of foreign exchange funds within the system. Including domestic and foreign trade, the system of foreign exchange funds transactions, regular deposit, open and release, accounting verification and other business processes.

How to clear foreign exchange margin?

As we all know, foreign exchange margin trading, as a kind of foreign exchange derivatives, plays an important role in global foreign exchange trading. How do they liquidate? In simple terms, it is the clearing between the dealer and each individual of its clients, the clearing between the dealer and its own PB(primebroker clearing investment bank), if the dealer does not have its own PB, it will be cleared through the LP(that is, we often hear the clearing broker). Due to the strictness and scarcity of PB, at present most forex brokers are through the clearing house. This clearing mode of foreign exchange margin trading can be called hierarchical bilateral clearing.

As far as retail forex brokers are concerned, it is very important to choose a good liquidator, which will help their brokers to provide good risk control and to some extent become the guarantee of good operation of the brokers.

Of course, some people ask here, is there an absolute STP+ECN broker? Tianye Jun's answer is no, most platforms are DD+STP, but we do not have to worry, in the mainstream platform trading, the problem will not be very big. The general mainstream platform can accommodate $50W of funds, as for security problems are not very big, $500,000 is a critical value, but also a watershed.

Because it reaches $50w, you can directly go to LMAX to open an institutional liquidation account, and the liquidation is directly done by the liquidator, but the leverage is slightly lower, and the leverage of LMAX is 50 times, as for the choice of liquidation or platform brokers, we can choose according to their own needs.