How do forex brokers route orders to liquidity providers?

Brokers using STP or ECN models typically connect to multiple banks, prime brokers or non‑bank liquidity providers. When you place an order, their systems aggregate quotes from these sources and either match your trade internally or execute it with the best available external price. Smart‑order‑routing technology can split larger orders across several providers to reduce market impact and maintain tighter spreads. Some brokers operate hybrid models, internalizing smaller trades while sending larger or riskier flows outside. The specifics of routing are usually not fully disclosed, but high‑quality firms tend to emphasize straight‑through processing, minimal manual intervention and clear execution statistics. Ultimately, effective routing aims to give clients fast fills at competitive prices while allowing the broker to manage its own risk efficiently.