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I would like to know when I open a position in market, what happened or what the broker does with my position really. Do I buy/sell anything in market or just we trade in market virtually and nothing is going to be sold/bought in the market? Please give me some references for future study Thanks

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First, define "the market", particularly as Forex is not "a market" but there are different markets. Second, it depends on the broker. SOMEONE obviously has to be able to pay you the profits if you make any, or? ;) This is a wide topic, but generally SOMEONE has the other side position - either the broker (dealing desk), another client or a liquidity provider.

There is no "market" as in exchange - different Forex brokers have different order books.

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The retail forex broker can lay-off order imbalances to an institutional forex system run by large banks. So the retail forex broker allows small positions but ties-in to the largest forex market.

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Some brokers really send a buy order to the bank, But some are explicitly writing that this is just an option [ie: their commitment to future profits without real buying of property] Take a good look at FXCM's policies

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