The core of the FX market is made up of a relatively small number of international banks, who have credit and trading limit agreements with each other. These banks may allow their bigger customers direct access to this market via a Prime Brokerage (PB) agreement. These customers include large hedge funds and individual traders, smaller banks and bigger retail brokers. The next level down includes customers who get direct access to the bank’s own pricing only.
All of these bank customers will leave market orders and the bank obviously sees them all. The best person to speak with in a bank is a salesperson who’s job it is to rustle up business and they will do this by calling their customers and telling them exactly what’s going on and who’s doing what. The absolute best person to speak to, without doubt, is the big hedge fund trader, because they get all the information from all of the big banks. Bank dealers are less willing to give out useful information as it may hurt their ability to clear their business, but friends look after friends and pass information along.
I get most of my information from hedge fund sources. and whilst it could be in their interest to ‘colour’ the information, I don’t think they need to do so.
