Interbank Market

The interbank market is the global network where large commercial and investment banks trade currencies with each other in wholesale quantities. It forms the core of the forex market, with individual transactions typically exceeding $1 million and often running into the hundreds of millions. Interbank rates set the benchmark prices that retail brokers derive their quotes from, then add spread or commission to create the prices retail traders see.

Top-tier interbank players include JPMorgan, Citi, UBS, Deutsche Bank, HSBC, Goldman Sachs, and several other major banks. They trade among themselves to manage their own currency exposure, facilitate client orders, and take proprietary positions. The rates quoted between these banks during active hours set the most accurate reference for true market value. Retail traders access this deep liquidity indirectly through brokers that connect to prime brokers and liquidity aggregators, which pool quotes from multiple interbank sources into a single feed.

For example, if the true interbank mid-price for EUR/USD is 1.08505 with a 0.1 pip bid-ask spread, a retail broker might add 0.5 pips of markup and quote 1.0850 on the bid and 1.08510 on the ask. That 0.6 pip total spread is how the broker earns revenue while passing through institutional liquidity. On 1 standard lot, the cost is about $6 per round-turn trade, which is very competitive for retail conditions.

In copy trading, interbank liquidity quality affects execution and therefore performance. SteadyFlowFX's 9 algorithms trade 8 currency pairs through brokers with deep interbank connectivity. The verified Myfxbook 1.73 profit factor and 71.3 percent win rate depend on clean execution close to interbank prices. Subscribers benefit from using brokers with strong prime broker relationships and good aggregation, which keep spreads tight and minimize the gap between subscriber fills and the master account.