How Banks Trade Forex and Why Retail Traders Follow Their Moves

 [Open Account](https://client.onsafx.com/register)  [Login](https://client.onsafx.com/login) # How Banks Trade Forex and Why Retail Traders Follow Their Moves By [Ethan Walker](https://onsafx.com/author/ethan-walker/ "Posts by Ethan Walker")Published On: February 11, 2026Categories: [Forex Education](https://onsafx.com/category/insight/forex-education/), [Insight](https://onsafx.com/category/insight/)Tags: [forex sessions](https://onsafx.com/tag/forex-sessions/)7 min read - [The Role of Banks in the Forex Market](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_The_Role_of_Banks_in_the_Forex_Market) - [How Banks Trade Forex](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_Banks_Trade_Forex) - [Why Bank Trades Move the Forex Market](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Why_Bank_Trades_Move_the_Forex_Market) - [Why Retail Traders Follow Bank Moves](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Why_Retail_Traders_Follow_Bank_Moves) - [Institutional vs Retail Forex Trading](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Institutional_vs_Retail_Forex_Trading) - [How Retail Traders Can Identify Bank Activity](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_Retail_Traders_Can_Identify_Bank_Activity) - [The Importance of Forex Market Sessions](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_The_Importance_of_Forex_Market_Sessions) - [Risk Management and Institutional Discipline](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Risk_Management_and_Institutional_Discipline) - [How Central Banks Influence Forex Trading](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_Central_Banks_Influence_Forex_Trading) - [Conclusion](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Conclusion) - [Frequently Asked Questions](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Frequently_Asked_Questions) - [Do banks manipulate the forex market](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Do_banks_manipulate_the_forex_market) - [Can retail traders compete with banks in forex trading](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Can_retail_traders_compete_with_banks_in_forex) - [How can I tell if banks are buying or selling](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_can_I_tell_if_banks_are_buying) - [Why do forex prices move so fast during news events](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Why_do_forex_prices_move_so_fast_during) - [Is it better to trade during London and New York sessions](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Is_it_better_to_trade_during_London_and) - [The Role of Banks in the Forex Market](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_The_Role_of_Banks_in_the_Forex_Market) - [How Banks Trade Forex](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_Banks_Trade_Forex) - [Why Bank Trades Move the Forex Market](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Why_Bank_Trades_Move_the_Forex_Market) - [Why Retail Traders Follow Bank Moves](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Why_Retail_Traders_Follow_Bank_Moves) - [Institutional vs Retail Forex Trading](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Institutional_vs_Retail_Forex_Trading) - [How Retail Traders Can Identify Bank Activity](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_Retail_Traders_Can_Identify_Bank_Activity) - [The Importance of Forex Market Sessions](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_The_Importance_of_Forex_Market_Sessions) - [Risk Management and Institutional Discipline](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Risk_Management_and_Institutional_Discipline) - [How Central Banks Influence Forex Trading](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_Central_Banks_Influence_Forex_Trading) - [Conclusion](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Conclusion) - [Frequently Asked Questions](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Frequently_Asked_Questions) - [Do banks manipulate the forex market](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Do_banks_manipulate_the_forex_market) - [Can retail traders compete with banks in forex trading](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Can_retail_traders_compete_with_banks_in_forex) - [How can I tell if banks are buying or selling](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_How_can_I_tell_if_banks_are_buying) - [Why do forex prices move so fast during news events](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Why_do_forex_prices_move_so_fast_during) - [Is it better to trade during London and New York sessions](https://onsafx.com/insight/forex-education/how-banks-trade-forex-and-why-retail-traders-follow-their-moves/#toc_Is_it_better_to_trade_during_London_and) The [**forex market**](https://onsafx.com/) is the largest and most liquid financial market in the world, with trillions of dollars traded every single day. While millions of retail traders participate in forex trading through online platforms, the real driving force behind price movements is still the banking sector. Understanding how banks trade forex and why retail traders follow their moves can completely change the way you approach trading. Banks are not just participants in the forex market. They are the foundation of it. From providing liquidity to setting bid and ask prices, banks shape the structure of forex trading. Retail traders who understand this relationship gain a strategic advantage because they are no longer trading blindly. Instead, they are aligning themselves with the institutions that move the market. ## The Role of Banks in the Forex Market The forex market operates as an over the counter network. There is no central exchange. Instead, global banks trade currencies directly with one another through an interbank system. This system is where the majority of forex trading volume takes place. Major banks such as JPMorgan, Deutsche Bank, Citibank, and