The investor is the person who runs the show; he is the heart of the Forex market. No investor, no Forex market. The investor knows that in the currency market he/she can buy a pair of currencies and sell them at a short notice. The entire transaction takes place within minutes and the trading is normally carried on by a professional trading manager or a trading company. It sounds quite easy but the reality is much different. You may have a pair of currencies but if there is no buyer at the other end then who will you sell it to? So there is the need of a buyer who can buy your currencies and maybe sell them again to another buyer. A vicious circle isn’t it?
It is not necessary that you as an investor might be able to find a buyer all the time. Although, the market works 24 hours a day but sometimes finding a buyer can be tough. You will be very lucky if you find a buyer who is ready to buy the currencies at the same rate that you bought them for. The probability of finding a person who may be interested in buying and selling the same currencies for the same amount, at the same time is almost negligible. This leads to a question. How can you as a Forex investor buy and sell at the same time or anytime? This is where the Forex market traders come in.
The Forex market maker can be a brokerage company or a trading association. The market maker can be an individual or a financial organization. They can be a bank with adedicated trading account managers. These individuals or companies are always ready for any outcome. Their job is to speculate and make trading possible so that you can reap the benefits. They negotiate the price for various currencies and sell it to a buyer from whom they can earn profits. The market maker is the lifeline for an investor because he can buy the currencies from you whenever you want to sell them. After buying, the market maker will go ahead and sell a pair of currencies to another buyer. This is good news for you because you don’t have to take the pain of finding a good buyer. Again, as an investor, you can always buy a pair of currencies from the market maker.
In other words, the market maker works both ways and helps in creating the Forex market even if there are less number of buyers and sellers. The Forex market makers keep the market in circulation or flowing all the time. They always update their prices every thirty seconds so that any buyer or seller can be well informed. Even if the market turns volatile, the market makers in Forex will continue with their job of buying and selling the currency. At times, they can even incur losses but that has no consequence on them and the process continues. Some of the famous Forex market makers are Forex Capital Markets (FXCM), Saxo Bank, and Gain Capital etc.
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