The main players originally were the importers and exporters of foreign goods and travelers who had to change their currency to the currency of their destination and back again when they got home. Goods and services are usually paid in the currency of the country where the goods originate, however many companies around the world want to be paid in USD. Most trade transactions are usually dealt with by the companies bank, however it is becoming more common now to use full service brokers through the internet.
The next group is the investors who want to invest in a foreign country, either in property or companies over a long period of time. They need to convert their home currency into the currency of the country they are investing in. Investors will also invest in foreign financial assets, like bonds, equities or any other securities. Again there is buying and selling of currency taking place.
Now of course there are the speculators who buy and sell for the purpose of making a profit. Surprisingly the main players in this group are the banks. They speculate with their money (not always wisely) not with the customers money. Money managers also trade currencies as do the investment banks, hedge funds and very wealthy individual speculators.
The other main group that can have a major affect on a currency are the central banks (Governments). During this global upheaval it is sensible to beware that the central banks around the world are looking at how they can give a boost to their own economies. One of their strategies could be to devalue their currency; if you are holding it you could well lose your margin overnight.
To actually keep the market moving there is the group who provides the "buy and sell quotes". They are known as the money makers and the difference between the two prices is known as the spread. This is their profit. To accept a deal they will take the other side and then often hedge their positions. The market makers are buying and selling currencies all around the world 24/7. Because there is no fixed global price they can offer any deal, however to make it work they have to be competitive.
Now because of the internet the brokers who used to act as intermediaries, much the same as an insurance broker getting the best deal for the client and offering advice can now offer immediate electronic execution and is taking over that role of the money makers. There is now real time charts to study and because everyone can have access to them,this keeps the quotes relatively even around the world.
However when things get very volatile it is good to check the spread because you will notice it can increase sharply and if you are looking to be in and out of the market (scalp) then you could find your small profits disappearing.
