The Major Players In the Forex Market

The Forex market is the single largest market around the world not just in terms of average daily turnover and average revenue per trader but also the largest market in terms of participants.

Here is a list of the major players in the Forex markets:
Commercial Banks – Banks are usually involved in both large quantities of speculative trading and also daily commercial turnover. Some trade in billions of dollars in foreign currencies everyday. Some trade on behalf of clients. Others trade proprietary accounts.

Central Banks – Central banks play an important role in the Forex market and that role is controlling the supply of different currencies. Besides having to worry about regulating inflation and interest rates, they are also responsible for stabilizing the Forex market.

Investment Firms – Investment management firms commonly manage huge accounts on behalf of their clients and require the exchange of foreign currencies so they have to facilitate these transactions through the use of the foreign exchange market.

Retail Forex Brokers - This group handles a fraction of the total volume of the entire Forex market that is estimated at between 25 to 50 billion dollars each day or about 2% of the total market volume.

Speculators - These are the risk-taking individuals or private investors who purchase and sell foreign currencies and profit through fluctuations in their price.

Algorithmic Traders – High-frequency algorithmic traders or algo traders have managed to change the landscape of Forex CFD trading. Today’s world of electronic trading and computerized trade-matching has allowed a proliferation of programmed high-frequency traders using among others highly sophisticated pattern recognition analysis to enter the trading arena under the guise of liquidity providers.