Market makers form an important group of people in the market of FX India. These are the people who set up a trade and also execute it. The traders usually depend on the market makers for enabling trading of currencies. It is very important for you to understand about market makers else you won’t be able to perform effective trading in the forex market.
Market Maker and FX India
Market maker is a person who acts as a counterpart of the clients who are involved in trading of the currencies in the market of FX India. The role of a market maker is not to act as intermediaries or act as the traders. The role of the market makers can be called as hedging. Hedging is the process of changing the positions of the traders in the market of FX India. The market makers take decisions depending on the various policies on which they rely up on. They also help in offsetting the position of the client in the market by hedging through the providers of liquidity and also through equity capital. The liquidity providers are the ones on which the market makers rely completely up on for making their decisions regarding the changes in the positions of the traders in the market of currency trading.
Who is a Market Maker?
The market makers are the people who perform buying and selling of the currencies and the market makers can be banks or trading platforms. The role of market maker is not like n intermediary who act in the place of clients and who get commission from the income that is earned by the traders.
Approach of a Market Maker
Market makers can be basically defined as the people who act as counterparts of the traders in the market of FX India. The market makers always come up with quotes that have two sides. The quotes that are made in the market by the market makers are selling and buying. The market maker can be considered as a path through which the traders can enter in to a trade. There is no personal relationship between trader and the market maker. The market makers usually consider the positions of all its clients not individually. The market makers offset the positions between the clients of opposite positions. They also hedge the exposure of the clients on the basis of policies related with risk management also on the basis of the guidelines of the authorities of the market.
The Difference in Interest of Traders and Market Makers
Market makers are not the ones who act as traders but they are the counterparts of the traders. These are the people who perform buying and selling of the currencies to the traders. The market providers give a double sided quote to the traders. The quote includes buying and selling. The interest of the market makers is different from that of the traders.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS