The entire Forex market is run electronically, within a network of banks. This Interbank Market affords the opportunity to place trades through a broker, 24 hours a day, for this reason it is understood to be the most liquid financial market. Liquidity refers to the amount of market interest present in a particular market at any given time. The majority of global liquidity, in Forex trading is provided by a number of larger banks, which are referred to as Tier 1 Liquidity Providers, they make markets in all the available currency pairings.
Liquidity providers and market makers, aim at lowering volatility on the market, providing uninterrupted transactions and optimal price policy, and supporting the volume of transactions. Theoretically, liquidity providers facilitate greater price stability and improve liquidity by making it easier for traders to buy and sell at any price level.