| Updated: October 23, 2025Major Players in Forex and Styles of Trading
This lesson will cover the following
- Who participates in the Forex market
- What time frames investors can use to trade
Who are the main players in the Forex market?
After learning the basic terms in Forex trading, it is now time to talk about who participates in the Forex market. We can categorise the major players in the market into six groups:
Commercial and investment banks
First, commercial and investment banks are the foundation of the Forex market, as all other players must deal with them to participate. The mechanics of order processing in currency exchange, in which banks play the primary role, will be explained in the next article. Additionally, commercial and investment banks were the pioneers of foreign currency exchange, which began as an additional service to deposits and loans, expanding the range of services they offered.
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Central banks
Secondly, central banks are also major participants, but they stand apart from commercial and investment banks because their goals when exchanging foreign currencies differ. Their main purpose is to provide adequate trading conditions in their home countries by controlling liquidity and the money supply. They also intervene in the Forex market at times of economic and financial imbalance when fluctuations in the national currency need to be dampened.
High-net-worth individuals
The third group encompasses high-net-worth individuals, who usually participate in the Forex market through the intermediation of commercial and investment banks. A high-net-worth individual is someone with substantial net worth. In American private banking, such a person is defined as having investable assets of more than $1 million, excluding their primary residence.
Hedge funds
Another group consists of hedge funds, which are relatively new players in the currency exchange market. They comprise high-net-worth individuals who work in partnership and manage very large pools of capital, in most cases totalling well above hundreds of millions of dollars.
Businesses of any size
The fifth group consists of businesses and corporations of any size, from small exporters/importers to multimillion-dollar enterprises. Their participation is driven mainly by operational needs, as payments for goods and services in foreign currencies often arise and require exchange. These players are called “commercial traders” and they use the financial markets to hedge their operations by offsetting exchange-rate risk.
Individuals
Finally, the last group of participants comprises individuals. These are mainly people who need to exchange some of their native currency for another, most often when visiting a foreign country and needing to pay for goods and services in the local currency. Individuals may also be private traders, often referred to as “freelancers”, who use various online trading platforms to profit from price fluctuations, but who trade relatively small amounts of currency.
Now that we have discussed the main participants in Forex, it is useful to focus our attention on different Forex trading styles.
Before beginning your journey as a trader, you should understand the behaviour of the different types of traders and decide which trading style you wish to adopt. Generally, several trading styles can be distinguished: day trading, scalping, swing trading and position trading.
Day Traders
If a trader, acting as a speculator, prefers to enter (buy and sell) a series of trades in the currency market within the same trading day and close all positions before the market closes, then they are referred to as a day trader. Depending on the strategy used, the trader may submit anything from several to hundreds of orders per day. Day traders can be institutional or private.
Institutional day traders work for financial institutions and enjoy a number of advantages over private traders, such as access to more resources, tools and equipment, larger amounts of capital and leverage, a steady inflow of fresh funds with which to trade continuously, and dedicated, direct access to data centres and exchanges.
On the other hand, private traders work as freelancers, or in partnership with a few other traders. Private traders generally trade with their own capital, but they may also trade with other people’s funds. Legislation may impose restrictions on the amount of other people’s money a private trader can manage. In the United States, for example, day traders may not advertise as advisers or financial managers. Although not required, almost all private day traders use direct-access brokers, as they offer the fastest order entry to the exchanges, as well as superior software trading platforms.
Day trading is a short-term trading style that involves analysing charts with time frames of 15 minutes, 30 minutes or one hour. A day trader usually spends three to five hours per day trading and strives to achieve a quick turnover rate. These traders tend to rely more on technical analysis, taking advantage of small price movements, and trade highly liquid currency pairs in order to profit. A day trader is usually very flexible, adapting to whatever conditions the market presents at any given moment.
Scalpers
Scalping is a style that involves very intensive, rapid trading. A trader is referred to as a scalper when they allow their positions to remain open for only a few seconds up to a full minute, but rarely longer. If a trader leaves a position open for more than a minute or two, the style is no longer considered scalping but rather day trading.
The sole purpose of a scalper is to take small profits while exposing the trading account to very limited risk because of the ultra-short holding period. For many traders there would be little point in scalping were they not able to trade through highly leveraged accounts. The ability to control large amounts of virtual funds is what enables these traders to profit from price moves of merely two or three pips. Accordingly, scalpers tend to examine charts with time frames ranging from one to 15 minutes.
Swing Traders
Swing trading is a style of technical trading that focuses on short-term price momentum and attempts to capitalise on moves that typically continue for one to four days. Thus, swing trading operates over a time span longer than day trading but shorter than buy-and-hold strategies, which involve keeping positions open for months or even years.
This style provides a better chance of success for beginner traders because it does not restrict the trader’s horizon to a couple of hours, as day trading does, and because a swing trader does not necessarily need to spend a great deal of time trying to pinpoint the exact price for entry or exit.
A swing trader usually executes an average of three to six trades per week and aims to make a substantial profit of between 100 and 300 pips.
Position Traders
These traders utilise the longest trading time frame compared with the other three groups. Trades may last for several weeks to several months. The main objective is to capture a large number of pips per trade, typically between 300 and 1,000 pips. These traders usually prefer to use fundamental analysis—examining macroeconomic, political or other indicators—when making their decisions.