The forex market is decentralized. This means that the there is not just one specialists as is the case with the equity market. Instead there are many market makers. These market makers are ordered in a stick hierarchy.

This means that there is superiority in terms of credit access, volume transacted and sophistication.

At the top of the ladder the interbank market is situated. The latter is on top position and it has the largest volume traded each day even though it trades with few currencies. The interbank market represents a market where only the largest banks trade.

Their relationships are mainly based on a credit-approved system. Banks trade with each other through the services of interbank brokers or electronic brokering systems. They can also trade directly with one another.

In this case they need established credit relationships between themselves.

Due to the information transparency typical for the forex market, banks obtain data on the rates at which other participants deal.

However, in order to trade with another bank at the specified rates, the bank should have credit relationship with that counterpart.

Commercial banks should be used by other institutions if they want to participate in the trades.

Unfortunately, such banks as small community ones or those that operate on the emerging markets don’t have access to the rates at which the largest banks deal. This is caused by the lack of established credit links with the largest banks.

This results in less competitive and beneficial rates, since such banks should use the services of one bank for the execution of foreign exchange trades.

At the bottom of the hierarchy in terms of competitive rates are the customers of banks and exchange agencies.

However, with the wide introduction and application of different types of technologies, a closer access to the rates at which large banks trade on the interbank market has been given.

Technology has facilitated trades in terms of lower costs due to the establishment of a connection between users at the lowest level and interbank participants. As a result the market makers have been more closely connected with traders.

The wide use of the Internet has led to an improved access to the forex market and its many advantages.

The average trader has benefited from this since his/her abilities to trade with currencies at rates close to the ones at which large banks execute their deals has been increased.

The online trading platform has removed the past trend of only big players participating on the forex market and many smaller traders have now equal opportunities.