Who participates
Participants are not one layer but a pyramid in which each tier gets a better price than the one below. Your place in it explains why your price is not the banks' price:
| Tier | Role | Effect on price |
|---|---|---|
| Central banks | Set rates and occasionally intervene | Largest impact, though infrequent |
| Major banks (interbank market) | Make prices and supply most liquidity | Effectively set the reference price |
| Funds and institutions | Execute very large size | Create extended trends |
| Corporations | Convert currency for real needs | Steady non-speculative flow |
| Brokers | Relay liquidity to individuals | Add spread and commission |
| Retail traders | You | A tiny share of total volume |
The practical consequence: you are a price taker, not a price maker. Trying to "beat the market" with your size is meaningless; what matters is choosing when to participate — the session in which the upper tiers are active, so liquidity and cost improve.
What happens between clicking Buy and the position existing
Those few seconds explain most of what later puzzles traders. The path in short: you send the order → it reaches the broker's server → the broker decides how to fill it → confirmation returns. That third-step decision has two basic models:
| Model | What the broker does | What you notice |
|---|---|---|
| Pass-through (A-book) | Routes your order to liquidity providers | Variable spread, slippage both ways, usually a commission |
| Internalised (B-book) | Takes the other side of your trade in-house | Steadier spread, faster fills, a potential conflict of interest |
Many brokers mix both models by client and instrument. This does not make one "a scam" and the other "honest" — but it explains three phenomena wrongly blamed on bad luck: slippage (filled at a different price because price moved in transit), requotes (the old price is refused and a new one offered), and price differences between platforms. To tell brokers apart in practice, see how to choose a broker.
Why there is no single forex price
Because the market is decentralised with no central exchange, no single body publishes an official price. Each broker builds its quotes from the liquidity providers it contracts with, so you may see EUR/USD at 1.10002 with one broker and 1.10005 with another at the same instant. The differences are usually tiny and widen when liquidity thins.
Three practical consequences: comparing prices across two platforms reveals different sources rather than an "error"; automated strategy results can differ slightly between brokers because the historical data itself differs; and support/resistance levels precise to below a pip are meaningless across brokers — use zones, not lines.
How prices form
Price moves on supply and demand: a currency rises when demand exceeds supply, and falls when it doesn't. These forces respond to interest rates, economic data, and political events. See what moves currency prices and market sessions.