Forex market compared with other financial markets

In this article we will list the major players or participants in the Forex market. As it is understood in a market where hundreds of variables are involved as is the case of the currency market, a quote is the sum of different factors that affect in one way or another the exchange rate of the currencies.

Commercial Banks and Investment Banks

Several of the major players that influence the behavior of the foreign exchange market are commercial banks and investment banks. Specialists put them at a level above the Forex market which is known in the investment community as interbank market.
It could be considered that it is a form of parallel negotiation which is stablished by different banks that have their own trading platforms and data access prices in a similar way as Forex investors who connect with their own Forex broker. However, transactions between banks have a much higher level of liquidity, so that the interbank market is a high level market with transactions of many millions of dollars a day.
The peculiarity is that banks and liquidity providers work primarily with two trading platforms to trade on the foreign exchange market:
  • Reuters Dealing
  • EBS (short for Electronic Brokerage Service). 
An important fact is that depending on the liquidity and buying power of a bank, the institution can get better prices that in turn will benefit "retail" brokers or brokers for retail investors.

Central Banks

Central banks are the major players in the Forex markets because these institutions play a very important job determining the general direction of the market in the long term, as their policies may change the supply and demand of their respective currencies. The responsibility and scope of the central banks is varied depending on their own mechanisms; its scope will be higher or lower depending on how they are structured and legislated by each of the countries.

Despite what many initially think, the main task of the central banks as goverment institutions is not performing transactions to achieve own benefits, but to establish the monetary policies that favor a government or region. That is why, so central banks as major players in the Forex markets, will try through various monetary policies to control inflation by adjusting interest rates. They try to control the money supply, inflation, and interest rates. In addition, central banks can use their own foreign exchange reserves to try to stabilize the market.

Companies and Corporations

Other major players in the Forex markets are perhaps "secondary characters" but set a high volume of trading in currency trading. At this point we have companies and corporations of a certain level that generate a large cash flow thanks to their many high volume buy/sale transactions.  This is because they are businesses that have commercial orientation based on the import and export of products and services.

Online Retail Brokers

The online brokers in the Forex trading scenario could be defined as those companies that provide investors and retail traders the tools to perform operations in the market without any requirement other than the opening of their an account and the deposit of funds. Usually Forex brokers provide services like updated quotes, online trading platforms, educational resources, training and consulting services and other.
Within this category of brokers, there are several types depending on their own infrastructure and how they manage the operations of their customers through their own infrastructure and technological resources.

Individual Trader

Finally within the major players in the Forex markets we have the retail trader. The individual trader is the person that we ourselves reflect; these are people who through an trading platform which is provided by a Forex broker, can make buying and selling trades in various authorized markets and currency pairs of Forex.

Today this type of operation is fully automated and channeled through different platforms and servers through the Internet which in turn connect to the relevant markets or liquidity providers (depending on each case).

As we have explained on more than one occasion in the Forex market, being at a market that is totally decentralized, the trader has the advantage of not being limited by a schedule of market opening and closing as with the stock exchanges for example.

Trades can be performed virtually all day. But regardless of the above, we can say that there are trading venues with relative importance such as London, New York or Tokyo.


In this article we will list the major players or participants in the Forex market, which includes central banks, investment banks, traders, brokers and companies.

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