Forex Trading Market Maker

What's selling and what's available for buying in forex trading---these are vital questions a forex investor needs to know. And who gives such information? The market maker. So what's a market maker?

Market makers in forex trading aren't necessarily allies or foes. They're not there to really help the forex trading investor to make profits but to inform of what hot items can be sold in the market, or what are available for buying in the market. The market maker is there precisely to make a market. Prospective buyers won't get quick information on what's selling unless a market maker goes around announcing what's available. Prospective sellers don't know who's looking for forex trading investments to buy. So the market maker becomes a mediator for such transactions, but not as a representative of any forex client.

A market maker, far from being a forex trading intermediary or trustee of a client, is actually a "counterparty." The market maker offsets the different forex trading positions of a client and hedges (put barriers to secure), on its discretion, through establishments that provide liquidity, like banks, and their equity capitals. Banks buy and sell money instruments at the money market. So do forex trading platforms. These are examples of market makers. Forex trading intermediates or brokers, on the other hand, transact forex trading in behalf of their clients, assist them, and act as their representatives. Most forex trading representatives derive income from forex commissions.

In forex trading, market makers always make two quotes with different rates---a quote for buying and a quote for selling. The market maker is not an agent for the client but a sort of an informer. They see what particular clients can buy or sell and hedge their net coverage according to some policy. Market makers rely on demand-supply ratios. It's something like a buy and sell store. Customers go there, the salesman tells them the price for buying an item from the store, and also tells them the price if they sell something to the store. After that the customer leaves, and that ends the trading relationship.

Are forex trading prices manipulated by market makers? There are trillions of dollars worldwide that are invested in the forex trading market. A market maker, or even a group of the same, cannot do anything to manipulate forex trading prices.

Market makers are forex trading information "desks," as it were, who announce what forex trading items are hot in the money market.