The easiest way to understand how the market is quoted between the various entitie is to think of those bank listed in our previous post has the wholesalers.
The wholesaler is generally a company that buys in volume and therefore gets the best price.
The goods or services are then broken up into smaller order sizes and bought by higher price by retailers,who then sells the product in single quantity to end user you and me in other word.
The forex market works in much the same way
Price from the interbank pool follow the same principles.This group of ten major banks effectively set the wholesale rate for the rest of the market,with every 'retail and distributor' (large or small broker)in the chain quoting a rate that allow them to make a profit.
This is basically how the price arrive at our screen.
