The Forex market is a decentralized concept. If someone asks where the Forex market is, it is almost impossible to give a clear answer... the truth is that it does not have a specific location. It is not in any place, but at the same time, its there, available every time you open your MT4 platform and begin to operate.
In real time we find large banking institutions that act as "market makers" and which define the prices at which every particular currency is bought and sold. We also find brokers who act as Market Makers, that is to say, thwy compensate to your purchase or sale transaction. If you gain this implies that they have lost that money. We do not doubt that completely honest MM brokers exist, who do not make “strange” movements to set off a "stop loss" or ultimately damage the clients trading, promoting their interests. They exist and they do their job well. However, there exists another type of broker, who does NOT buy your sales or sell your purchases, but who directly or indirectly, limit themselves to transferring the order to buy or sell to the interbank market so that it is the large liquidity providers that compensate (in simple terms they buy what we sell or they sell what we want to buy Since the traders identity is anonymous this avoids the temptation to manipulate the operation.
And finally we find the trader who is the person or institution that generates the purchase orders or sales. He may be a with large volumes or an individual negotiating a small amount.
The result is that EVERY DAY is traded $3,500,000,000 is traded every day, This is THREE MILLION FIVE HUNDRED BILLION DOLLARS. Therefore, given that a lot as we understand it is a basic unit of negotiation is $100,000, this means that total buying and selling movement every day is estimated at around 35 million lots!! Its more or less like every person living in a country like France buying or selling $100,000 each day (!!!). And this happens every day...
Forex cash or Forex Spot: In this market the operations are performed directly by selling the currency in question. The broker can also provide a degree of leverage to the trader. The price is generated in the interbank market and supplied by the broker to his clients. This activity is not subject to regulation in most Western countries.
Forex with CFD: In this type of negotiation it is not the currency that is bought or sold, but a contract working alongside the currency The broker acts as Market Maker. The price that is negotiated can be linked to the one that exists in the interbank market place, but in reality this is produced directly by the broker. It is an activity that requires strict regulation through the control systems of each country.