Hedgers account for less than 5% of the forex trading market, but they are the key reason the forex market exists. Forex hedgers are mainly businesses and other organisations participating in international trade. They aim to reduce or neutralise the impact of currency fluctuations.
Speculators account for more than 95% of the forex trading system and they account for the high liquidity. They trade forex using leveraged investing to create profit, taking advantage of the fluctuations in foreign currency rates. Speculators include private individuals and corporations, public entities and banks.
A market maker is the counterpart to the forex trader. This could be a bank or a forex trading platform such as easy-forex. A market maker buys and sells financial instruments, literally to ‘make the market’. A market maker is not an intermediary and does not make its money from commission. Instead, the major source of earnings for market makers in the online forex trading system is the spread between the bid and the ask prices for a currency pair.