Forex major market participants

The Forex trading is the biggest and most popular financial market in the world, traded globally by large number of individuals and organizations. It is conducted Over The Counter and open 24/5 a day.

In the forex market, traders determine who they want to trade with depending on trading conditions and attractiveness of prices. This has attracted a large number of people from different regions to participate in the global trading.

Forex market is the most highly liquid in the global market because it has many participants who place their trades daily for a profit. Electronic trading and internet made it easy for individuals to participate in trading alongside the big banks and organizations.

Like we mentioned previously, The main players are, the interbank, central banks and the governments, big corporations and the individual investors known as speculators. We shall now get in details and see  how each of these contribute to the market and their trading mechanism.

Inter banks;  These are known as market makers in the market, who quote both the buy and the sell price of financial instruments hoping to make a profit on the bid-offer spread. The greatest volume of currency is traded in the inter-bank market through the electronic network. They facilitate transactions for clients and at the same time speculate trades from their own desks. These define the forex market. Some of these banks are: Barclays capital,Deutsche bank, Citigroup and UBS.

 Central banks and government;

The country’s central bank and the government play an important role in the forex market. They greatly affect the forex market through setting of policies that can increase or decrease the value of the country’s currency.

They monitor the amount of money in circulation through using either the expansionary or the contractionary monetary policy to regulate inflation and achieve its objectives. The rising and cut of interest rates, bank reserve rates and financial security and bond rates are the other ways used by the central bank to influence the forex market.


These are the big companies that buy and sell their currencies with the aim of running their business globally. They are required to change their local currencies when they are on travels or purchasing goods from foreign countries which involves them in the forex market.

These are mainly exporters and importers and they use the financial market to hedge their operations against any risks as a result of exchange rates( future fluctuations).

Individual investors/speculators

This is you and me in the market. The speculators and individual traders carry on trade through a broker on the platform and aim at earning from making predictions about the future direction of the market.

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