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The Forex Market
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The foreign exchange market (FX) as a whole, consists of many types of markets, including Spot FX, Future derivatives, Forward Derivatives, and finally the CFD derivatives market, which is the most popular for retail clients. All forex trading transactions combined make up the largest and most liquid financial market, with an average daily volume of over $5 trillion.
The Forex market is made up of retail and institutional traders without a central authority such as a stock market. The traders can vary in size from the smallest individual traders to investment management firms, hedge funds and central banks. A retail trader will typically use a broker who has access to liquidity providers (large institutions who will trade with brokers). Generally, the brokers will provide an online platform on which the retail traders can execute trades. Based on the structure of how those trades are executed, the brokers can be categorized into the following.
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