Would like some info from you guys and gals regarding the maximum 'practical' number of tradable lots through a FX broker...i.e. whats the maximum number of lots one could enter a trade with to ensure that liquidity isnt an issue...?
If you trade the CME currency futures (okay, so it doesn't answer your question directly, but should help to a degree), there are usually 50+ contracts within a one-pip spread on either side - a few hundred is not that unusual.
if you're talking about dealing in the spot through an FX bucketshop then your available liquidity pool is limited to whatever size the firm wants to let you trade before they start giving you slippage. This might be as little as $5m lots or less depending on the firm.
If you want to do serious size you should definately consider the currency futures as JOC points out - the euroFX market will typicall have 200 lots a side on the immediate bid/ask on a 1 pip spread - thats $25M equivalent cash liquidity each way (1 futures contract is specced at $125k lot size).
If you think you'd be swinging bigger size than this around then you would perhaps want to look at the wholesale ECN's such as Currenex, Lava or Hotspot if you really must deal in cash spots.
Many thanks all, yes the transition from a bucketshop straight to a wholesale platform is probably the preferred route. Any comments at what level of trading capital this transition should take place. $100,000? $250,000? $500,000? $1m?