Participants of Forex Markets: The Forex Quadrant

There are four forex participants in the forex market, without them forex trading market can’t be standardized.


1. Investors

An investor is a person that allocates capital with the optimism of a future financial return. Types of investments are: equity, debt securities, real estate, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc. This makes no distinction between those in the primary and secondary markets. That is, someone who provides an enterprise with capital and someone who buys a stock are both investors.

2. Introducing brokers

An Introducing Broker (IB) is an industry term for a commodity broker or futures broker. An introducing broker is a brokerage firm that deals directly with the client, while the trade implementation and back office work are the responsibility of a Futures Commission Merchant (FCM). Another term for an FCM is a clearing firm.

3. Forex broker

A forex broker, also known as a retail forex broker, or currency trading broker, in modern financial and commercial trading implies an intermediary who buys and sells asset or assets for a commission. Thus, a broker may be thought of as a merchant of financial assets. The role of the broker has commonly been found in equities, commodities, derivatives and even insurance and real estate markets given that the beginning of the modern era. And until the dawn of the internet age, many FX brokers operated by phone. Clients could phone in their orders of deals, and brokers would buy and sell assets on behalf of their client’s accounts for a percentage-based commission.

4. Fund managers

A fund manager is someone who makes recommendations and then deals and invests assets on behalf of clients. They are working very closely with their clients to build an investment strategy and manage portfolio trading activities depending on the client’s goals and level of comfort with risk. Fund managers ensure that assets are managed in the most cost-efficient and profitable way possible. This includes making decisions to purchase, sell, or hold assets.

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