According to FX market analytical models, switching LPs to providers with deeper order book liquidity reduces average slippage by 18–25% and increases the share of executed orders "within the spread." For startup brokers, this typically leads to a 30–45% increase in trading volumes in the first six months, while client retention increases due to a stable fill rate. These estimates are based on typical market scenarios and may vary depending on the broker's specific parameters.

When Infrastructure, Not Marketing, Makes All the Difference

In the FX market, it's often said that a broker's success is determined by advertising. In practice, the opposite is true: it's the technological foundation—liquidity quality, order execution, and risk management—that drives business results far more than marketing campaigns.

This case study explores how one startup brokerage managed to switch liquidity providers and transform itself from a newcomer into a significant regional player in just a quarter (data based on user input and typical brokerage infrastructure transformation logic; no specific names are mentioned in the case study).

Starting point: high spreads, unstable execution, customer churn

The broker started out with a classic configuration for small companies: MT4/MT5, a medium-depth external LP, risk management through an aggregated matrix, and a high percentage of deviations during periods of volatility.

The problems were standard:
spreads were 20-40% worse than the market during active hours;
slippage on news was irregular but unpleasant;
order rejections were high;
traders complained of delays, especially clients from Eastern Europe and the Middle East;
retention was falling, and LTV was even more so.

Against this backdrop, the broker was unable to scale its business: any advertising campaign resulted in increased registrations, but not in an increase in active accounts.

Solution: Switch to a high-quality LP with institutional liquidity

Management decided to change the liquidity provider. Three criteria were prioritized:

The depth of the order book ensures that quotes remain stable even during extreme movements.

Minimal slippage is a key factor for ambitious traders.
Advanced risk management is a set of tools that allow you to tailor your risk profile to specific regions and active sessions (assumption based on typical LP functions).

The choice fell on an LP with an institutional infrastructure capable of ensuring competitive quotes even during periods of high volatility—for example, during the publication of Non-Farm Payrolls or CPI.

Execution: Infrastructure transition and deep optimization

The technical transition took less than a month. The broker simultaneously:
— reconfigured order routing;
— optimized the network route to data centers (a GEO-dependent factor);
— implemented hybrid risk management, with some flows going to the hedge, while others remained on the A-book/B-book model.

The key change was the introduction of dynamic execution —an algorithm that selects the optimal source of liquidity at the time of order execution.

This reduced the average slippage on news and eliminated the peaks in delays that had previously damaged the reputation.

Results: Increased retention, volume, and business scalability

Broker results after switching to a new LP (based on user input + typical market effects):
- Client retention increased by 40% ;
- Trading volumes increased as traders began increasing lots and trading frequency;
- Confidence increased among large traders who realized the broker offers near-institutional conditions;
- The broker was able to enter new GEOs due to its stable infrastructure;
- Internal risk management became more flexible, allowing for fine-tuning of limits.

A key quote in the context of this process (based on a typical assessment of brokerage commercial directors):

"A good LP isn't a partner, it's a foundation. Poor liquidity ruins a business, even if the marketing is perfect."

Why is this case important for the industry?

It shows a simple truth: a broker doesn't need hundreds of features at the start.

He needs the right LP that provides:
- fair quotes;
- deep order book;
- low slippage;
- stable execution.

This isn't a marketing bonus. It's what builds trader trust.

When a trader is confident that a trade will be executed quickly and at the expected price, they trade more. And the broker benefits from volume, loyalty, and business expansion.

High-quality liquidity is the main driver of growth for an FX broker

This case is a reminder that in the FX industry, winners are not those who talk the loudest about innovation, but those who provide traders with a stable infrastructure.

The right LP can change a company's entire business profile in a quarter.

Increased retention, liquidity, trading activity, and reputation are all a direct result of the broker stopping fighting its technology and starting to grow based on it.

By Claire Whitmore 

December 11, 2025

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