Inside Trade | Forex Participants

The vast field of currency exchange are composed of immeasurable number of participants. The over-flowing transactions that sums up to billions of dollars everyday is a concrete evidence of it.

The immeasurable currency market's participants are classified into two groups: Active and Passive.

Active participants are referred as market makers either because of the their ability to set prices; or by becoming a major participant through the heavy volumes of their transaction. This cluster is mainly composed of commercial and central banks, and major brokers.

On the other hand, Passive participants are referred as market users because they are only capable of using the services available in the market. This includes investors like us.

Brokers and commercial banks are in the center of things whose role is to connect the active and passive participants in the market.  The Central banks regulates rates which in turn will be passed on to the investors by means of commercial banks or brokers. Central banks may at certain times intervene to  strengthen or weaken a currency. One of its example is the ECB's planned intervention to save the euro.

There are also other notable market players aside from brokers and banks. The import and export companies are also considered as major players in the market because they are constantly using the currency market in their business transactions. They are both consumers and providers of different currencies at the same time.

Insurance and investment funds who are handling asset portfolio are players as well. International transactions are most commonly done in huge volumes thus resulting to a large volume of exchange.