Trading 101: Different Types of Forex Market Participants

Trading 101: Different Types of Forex Market Participants

The forex market is worth trillions. So it’s not really surprising to know that this particular ProfitiX Broker financial market has a lot of market participants. On the other hand, all of these participants have different goals and motives.

And if you understand their motives and goals, you can have better chances of accurately predicting their behavior in the market. In addition, some of these participants have very deep pockets, have more information, and are more active than others.

In this article, we will describe different forex market participant and their roles and functions in the market. Read on to know more about them!

Forex Dealers

Forex dealers are one of the biggest participants in the forex market. They are also known as broker dealers. Most forex dealers in the world are banks. It’s for this reason that the forex market is also known as the interbank market. On the other hand, there are many notable non-bank financial institutions that deal in the forex market.

These dealers take part in the forex markets by offering bid-ask quotes or currency pairs at all times. Not all brokers participate in all currency pairs. Instead, they may specialize in a particular currency pair.


The forex market is mostly devoid of brokers. This is because one doesn’t necessarily need to deal with brokers. If one has sufficient knowledge, they can directly call the dealer and acquire a good rate.

On the other hand, there are still brokers in the stock market. These brokers are in the market because they add value to their clients by helping them obtain the lowest buying price or the highest selling price by making available quotes gotten from a number of dealers.

Central Banks

Central banks from different countries take part in the forex market to some extent. In most cases, their participation is official, although there is still much participation that is made through covert means. This is because every central bank has a target range in which they want their currencies to fluctuate.

If the currency moves out of this target range, the central banks usually do open Profitix Broker Review market operations to bring it back in the range. In addition, when the currency of a nation is under speculative risk, central banks participate extensively in the market to defend the currency.

Retail Market Participants

Retail market participants include tourists, students, and even commoners who travel abroad.  Then there are also a plethora of small businesses that take part in foreign trade. Most of these retail participants take part in the sport market, while people with long term interests operate in the futures market.

This is because these participants only buy and sell currencies when they have a personal or professional requirement to do so, where dealing with foreign currencies is not always a part of their regular activity.


Speculators are a class of traders that sports no unique requirement for foreign currencies. They only buy and sell currencies with the view to make a profit from it. The number of speculators goes up when the market sentiment is high and bullish.

Speculators typically do not maintain open positions in any currency for an extended period of time. Their positions are transient and are only designed to make a short term profit.

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