The forex market is decentralized. So how is it regulated and who regulates it? The answer is – Banks. And they do so with bank orders forex. The four major banks which participate in day-to-day forex trading are Deutsche Bank, JP Morgan Chase, UBS, Citigroup and HSBC and more than 50% of the daily trading volume is done through these banks.

Thus it is a case of common sense that these interbank and through bank trades are those which determine the whole forex market. So for a prosperous gain in bank order forex, you must understand as to how forex is both guaranteed and unstabilized by banks.

What is interbank forex?

This sector is where highest single volumes of forex trading are done. Banks engage in forex to balance their equity or their inventories according to market status and market futures. They engage in a deal with another bank, deals quite easily crossing the millions threshold to offset their positions according to the market. There are two platforms which interbank traders use, viz. – Reuters Dealing and EBS (Electronic Brokerage Service).

Why is it important to a trader?

To explain, let’s consider a situation wherein two banks participate in a deal between USD/JPY. To offset each other’s’ positions as per the market, they exchange the cash for a ratio which suits them both. The impact of such a huge cash deal will quite obviously be felt in the market with time. For a trader, a pre-disposed knowledge and awareness to such deals can prove to be a huge gain.

Where do banks get the money for trading?

The answer is quite simple, from its customers. The assets of a bank are used by it for forex. But banks are also platforms where investors give forex trade orders. These orders are known as bank orders forex where it is a bank who acts as the medium for forex trading. Investors who prefer a bank as trading platforms instead of online trading platforms often have a huge sum at their disposal, a sum which they deem too large for open forex trading, ranging above $1million mark.

A bank order forex is a three-step process. Every bank has a separate group known as its Foreign Exchange Sales and Trading Department to deal with FX trading. And each group further has a customer service desk or in official words a sales and trading desk which answers to the interested customer. It is this sales desk which takes an order from a customer, gets a requisite quote from a representative trader and relays the same to the customer awaiting his/her further decisions of regarding it.


To conclude upon the matter at hand, bank orders forex refers to both intrabank orders and forex through banks. While the former is a market where participants are only banks, the latter is where a bank acts as a medium through which a forex trade is being made.

It is mentionable that when a bank oversees and runs a forex order, it is the bank who acts as the participant in place of a customer. Thus for any individual pondering on a bank order forex, it is advisable to understand all that it refers and conjures before investing in it. And do remember that 

Proper Investments Prosper.”

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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