Many traders consider the forex market to be the most profitable because of its high liquidity. Some forex articles state the daily liquidity of the forex market is more than 4 trillion. So the forex market is a potential market compared to other financial markets such as the stock market. The forex market cannot be manipulated because forex market participants consist of various institutions from government to retail.
The structure of the forex market is different from the traditional market. The forex market is decentralized, and transactions occur via OTC (Over-the-counter). forex is a vast network of dealers, brokers, and financial institutions globally. This setup allows for 24-hour trading five days a week, accommodating various time zones and providing constant access to market participants.
The forex market structure consists of players, each of whom has a role in shaping value changes. Participants in the forex market structure include various groups, including Governments, Banks and Financial Institutions, Multinational Companies, Speculators, Brokers, and ordinary forex traders. Even though forex market players cannot determine prices, each has a different role.
There are three main participants divided in the group
Understanding the forex market structure can be useful for trading even if we are in tier 3 as a retail trader or individual investor. Because the decisions or actions of participants in Tier 1 can influence price changes. To learn more about the forex market structure and its influence, read the useful articles on the FXOpen blog.
The structure of the forex market is different from the traditional market. The forex market is decentralized, and transactions occur via OTC (Over-the-counter). forex is a vast network of dealers, brokers, and financial institutions globally. This setup allows for 24-hour trading five days a week, accommodating various time zones and providing constant access to market participants.
The forex market structure consists of players, each of whom has a role in shaping value changes. Participants in the forex market structure include various groups, including Governments, Banks and Financial Institutions, Multinational Companies, Speculators, Brokers, and ordinary forex traders. Even though forex market players cannot determine prices, each has a different role.
There are three main participants divided in the group
- In Tier 1, there are Major Players including large banks, financial institutions, and central banks.
- In Tier 2, there are intermediaries, including small banks and financial firms who are the liaison with Tier 1
- At Tier 3, there is a Retail Market, including individual investors and retail traders
Understanding the forex market structure can be useful for trading even if we are in tier 3 as a retail trader or individual investor. Because the decisions or actions of participants in Tier 1 can influence price changes. To learn more about the forex market structure and its influence, read the useful articles on the FXOpen blog.
