It is essential for you that you understand the nature of the spot forex market. And who are the main forex market players.
Until the late 1990s, only the “big boys” could play this game.
The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with. Chump change right?
Forex was originally intended to be used by bankers and large institutions, and not by us “little folks.”
However, because of the rise of the internet, online forex brokers are now able to offer trading accounts to “retail” traders like us.
Without further ado, here are the major forex market players:
1. The Super Banks
Since the forex spot market is decentralized, it is the largest banks in the world that determine the exchange rates.
Based on the supply and demand for currencies, they are generally the ones that make the bid/ask spread that we all love (or hate).
These large banks, collectively known as the interbank market, take on a ridonkulous amount of forex transactions each day for both their customers and themselves.
They are known as “flow monsters“.
For these flow monsters, the name of the game is volume and capturing their share of the trading flow of currencies.
A couple of these flow monsters include Citi, JPMorgan, UBS, Barclays, Deutsche Bank, Goldman Sachs, HSBC, and Bank of America.