Lesson 4 of 47
Who is on the other side?
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Every trade you place has someone on the other side. Knowing who they are makes price behaviour far less mysterious.
Central banks
Major banks (interbank)
Funds & institutions
Corporations
Brokers
Retail traders — you
- Central banks — set interest rates and can intervene directly. The biggest single force in currency pricing.
- Commercial and investment banks — the interbank market; they quote prices to each other and to everyone below them.
- Hedge funds and asset managers — large speculative and hedging flows, often the cause of sustained trends.
- Corporations — buy and sell currency for real business needs, not profit.
- Brokers — give retail traders access to the market and pass on (or internalise) their orders.
- Retail traders — you. A small share of daily volume, which is exactly why you should follow flow rather than fight it.
What this means in practice
Retail traders do not move the market. Your edge is not size — it is patience, selectivity, and the freedom to sit out when conditions are poor. Institutions rarely have that luxury.
End-of-module quiz
Module 1 quiz — What is Trading?
5 questions · score 80% or more to pass · retake as often as you like
1EUR/USD is quoted at 1.0850. What does that mean?
2Why can forex be traded 24 hours a day, five days a week?
3Which window is usually the most liquid part of the trading day?
4What does 'going short' mean?
5Which statement about profitability is correct?
0 of 5 answered.
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