Market Makers (They Are Buyer & Seller Liquidity Providers)

What Is A Maker Maker?

Market Maker refers to an institution or individual that offers prices for specific Forex pair(s) that it holds in inventory, and is prepared and able to buy or sell those assets at any time. Market Makers are High frequency trading companies. Market Makers must be compensated for the risk they take, generally by commissions, per trade.

Market makers tend to oftentimes be surrounded by a bit of an aura of mysticism in light of the fact that other market participants consider them all-knowing entities who can do no wrong.

Is that the case?

Most definitely not. Instead, why not look at market makers as liquidity providers so as to see them for what they actually are: yet another market participant, with pros as well as cons associated with their status. The liquidity they provide tends to be quite useful and what the (in)famous bid-ask spread is all about.
In contrast to conventional brokers, marker makers assume a high level of risk because of the high number of units they hold their inventory.

Market makers are entrusted with promoting market efficiency by keeping markets liquid. To ensure impartiality for the benefit of their clients, brokerage houses who act as market makers are legally required to separate their market making activities from their brokerage sales operations.