Crucial participants of Foreign Exchange Markets

Posted 2 years ago in ECONOMICS & TRADE.

One of the main reasons for the forex market achieving such immense success in the world market is the contribution of each of its participants. Y

Crucial participants of Foreign Exchange Markets

Forex market participants

One of the main reasons for the forex market achieving such immense success in the world market is the contribution of each of its participants. Yes, the forex market has many participants under its belt. These participants work concerning one another to run the whole transaction cycle smoothly and conveniently.

But wait! You don't know much about these participants? Don't worry if the answer to this question is yes, as we are here to help. This article will walk through all the essential information one should and must possess about the forex market participants to reap maximum benefits from the industry. Let us look now.

Crucial participants of foreign exchange markets

Commercial banks

Commercial banks are one prominent participant in the FX market. They pursue trading operations on behalf of their customers. Hence, they provide you with a channel to conveniently participate in the market.

The banks are essential to provide liquidity and act as the backbone of the forex market. Commercial banks support their clients to participate as speculators and facilitate their trades. These are amongst the best-informed market players because of the infrastructure, capital amount, and, most importantly, their knowledge about the market.

Hedge funds

Hedge funds are another crucial participant of the industry; these are the primary group members of speculators. Although many hedge funds are in the forex market, macro funds are the most famous ones. Macro funds trade in a vast number of calls all across the globe, while currency finds are more focused on the opportunity in the Foreign exchange market.

Real money

Investment funds that don't use leverage are termed real money. It usually includes pension and mutual funds that manage the more significant sums of money and use the forex market for transactions when dealing in foreign securities.

For instance, purchasing a large amount of UK stocks at the London stock exchange will ask you to buy the local currency, in this case, the pound sterling.

Retail trader

Now, this is the most important participant of the forex market, without which the industry can survive even for a second. Retail traders are individual traders who access the FX market via retail brokerage houses but may also use a prime broker if they have enough capital.

To become a retail broker, one has to get themself registered with one of the retail broker firms for opening an account and acquiring access to utilize the leverage.

It is pretty challenging to determine the volume of global retail trading. Still, from the Bank Of International Settlement survey in April 2019, $201 million was traded by retail traders. Hence, the volume has been steadily rising and is unlikely to change soon.


To conclude, the forex industry is the fastest growing business. And all the credit of its success goes to its participants, including real money, retail traders, commercial banks, etc. Hence, we have mentioned all the information about these participants in the article above. You can always check deriv minimum deposit for ease



Saqlain Abbas

Living in Pakistan