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    Who are the Key Players in the FOREX Market? An In-Depth Look at the Liquidity of Over $7.5 Trillion a Day

    Mushtaq Ahmed

    Mushtaq Ahmed


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      With a daily turnover of more than $7.5 trillion, the FOREX market is the biggest financial market in the world. It operates 24 hours a day, five days a week, and is accessible to anyone with an internet connection and a trading account. 

      Despite its size and accessibility, the FOREX market is still shrouded in mystery for many people. In this article, we will take an in-depth look at the key players in the FOREX market and the liquidity that drives it.

      What is liquidity in forex?

      Liquidity in forex is an indicator of how easily a currency pair can be bought or sold without altering its exchange rate.

      In the forex market, liquidity is provided by a variety of participants, including financial institutions, commercial banks, and market makers. These market makers can be thought of as liquidity providers, offering both buying and selling services to traders.

      Funds are also accessible to large amounts of capital through the money market, a segment of the larger financial market.

      The liquidity pool created by this forex currency allows traders and investors to purchase or sell large blocks without waiting for buyers or sellers.

      The Key Players in the FOREX Market

      The FOREX market is made up of several different nominees, each with its unique role to play. 

      These participants can be apart into four main categories: central banks, commercial banks, hedge funds, and retail traders.

      Central Banks

      Central banks play a crucial role in the FOREX market, as they are responsible for setting and implementing monetary policy for their respective countries. This includes controlling interest rates, printing money, and managing exchange rates. The FOREX market is also extended to central banks. They can buy and sell currency to keep their foreign exchange reserves.

      Commercial Banks

      Commercial banks are also leading players in the FOREX market, as they facilitate international trade by converting currency for their clients. 

      They also perform in the market for their profit by engaging in speculative trading and executing large currency transactions for clients.

      Hedge Funds

      Hedge funds are investment companies that use a variety of policies, including speculative trading, to generate returns for their clients. They trade in FOREX to profit from price movements in various currencies.

      Retail Traders

      Retail traders are individuals who invest in FOREX markets for their gain. They commonly have a smaller capital base and trade on a much smaller scale than the other participants in the market.

      Background of the FOREX market 

      The Foreign Exchange Market (forex broker) is a global financial market that enables the interchange of one currency for another. 

      It is the world’s largest and most liquid financial market, with a daily trading volume of over $7.5 trillion according to Survey done by the BIS (Bank for International Settlements). This remarkable size and high liquidity mean that FOREX is attractive to individual, institutional, and corporate investors. It has seen a 14% increase from $6.6 Trillion dollars in 2019.

      The Liquidity of the FOREX Market

      The FOREX market’s liquidity allows participants to trade easily and execute large transactions in real time. 

      Forex liquidity pools can be described as the ease of selling or buying assets without having to affect their price. In the FOREX market, liquidity is provided by many participants and the constant flow of trades.

      Central bankers, hedge fund managers, retail traders and other financial institutions can freely enter or exit markets, provided there is liquidity.

      This is why the FOREX market is considered one of the world’s most efficient financial markets.


      The FOREX market is a complex and dynamic system driven by the key players and the liquidity they provide. Anyone who wants to be part of this lucrative and vast market must understand the roles of central banks, retail traders, and commercial banks.

      With the right knowledge and strategy, the FOREX market can be a valuable source of income for experienced traders and new investors.


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