Who integrates the forex market?

Let me start with a single question: wouldn’t it be great to sit at a poker table knowing exactly who your opponents were? Of course, that would give you a heads up in the game and while that might not assure you’ll end up winning, your chances might improve anyway.

Hopefully, Forex trading is not a poker game and you are able to understand who participates in the market even before you place your first market order.

Technology advances have made possible for most people to access the Forex market in only a couple of minutes. You can open a real trading account without moving yourself from your desk.

Isn’t it that great? And of course, such a straightforward way to access a transparent, highly-profitable market has attracted a large amount of investors.

There are FOUR market players:

Big Banks

Forex spot market is a decentralized market, meaning that huge capital moves are the ones that control exchange rates ultimately. No retail investors will be pouring so much into the market as JPMorgan, Morgan Stanley, Citi, UBS, Deutsche Bank… Do I have to continue?

Big Corporations

International companies also play an important role in foreign exchange transactions. Just think of any tech company in the United States that wants to buy products abroad. Yes, it would have to first exchange US dollars into a local currency to process the transaction.

Regulators

Did you really think government will miss the party? While some countries prefer not to interfere with the natural fluctuation of its national currency, others just don’t feel it as a problem. A clear example: the United States and China.

Central banks can access the Forex market as well, buying and selling in order to keep the currency within a reasonable target range that complies with its strategy.

Retail Investors

Yes, we’re finally talking about you. The little, yet not less important kind of actor in the market. Despite not counting on billions to trade, you can still make good profits.