Understanding the nature of the Forex instant market and who the key players are.

Until the late 1990s, only “adults” could enter the game.

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The precondition was that you could only trade  for about ten to fifty million dollars . So far, so big! do you agree?

Forex was originally designed for use by bankers and large institutions, not for “smaller” ones.

However, thanks to the advent of the Internet, online Forex brokers are now able to offer trading accounts to “micro” traders like us.

Do not procrastinate any more and in this article we want to introduce the main players of the Forex market at your service:

1- Supermarkets

Because the Forex market is not centralized at the moment, it is the major global banks that set the exchange rate.

Based on the supply and demand for currencies, banks generally create buy and sell spreads that we all like (or hate).

These large banks, collectively known as the interbank market, carry out huge volumes of Forex transactions for both their clients and themselves on a daily basis.

In fact, they are “cash flow monsters.”

For these liquidity monsters, the name of this game is nothing but the volume of the transaction and getting your share of this huge flow of money and currency transactions.

These cash flow monsters include Citi, JPMorgan, UBS, Barclays, Deutsche Bank, Goldman Sachs, HSBC and Bank of America.

In the table below you can see the share of each bank and its ranking in this liquidity flow.

2- Large commercial companies

Companies participate in the foreign exchange market with the aim of conducting commercial transactions.

For example, when buying electronics from Japan to use in their products, Apple must first convert its dollars into yen.

Because their trading volume is much smaller than the interbank market, these types of market players usually deal with commercial banks to conduct their transactions.

Mergers and acquisitions (M&A) between large companies can also lead to exchange rate fluctuations.

In international mergers and acquisitions, a lot of currency exchanges happen that can cause prices to move.

3- Governments and central banks

Governments and central banks such as the European Central Bank, the Bank of England and the Federal Reserve are also regularly involved in the Forex market.

Just like companies, governments participate in the Forex market to conduct their banking operations, make international trade payments, and use their foreign exchange reserves.

Meanwhile, central banks influence the Forex market when they change interest rates to control inflation.

By doing so, they can influence the exchange rate.

There are also cases where central banks intervene directly or verbally in the Forex market when they want to unify exchange rates again.

Sometimes, central banks think that the price of their currency is too high or too low, so they carry out massive sell or buy operations to change the exchange rate.

4- Oscillators

The act of buying and holding currency in the hope of selling it at a higher rate in the future is called currency trading or fluctuation.

This is in contrast to buying foreign currency to finance foreign investment or paying for imported products or services.

“ Come in and take it! ”

This is probably the slogan of speculators and currency fluctuators.

Forex trading involves buying and selling currencies with a view to making a profit.

The focus of traders and swingers is on price fluctuations.

It should be noted that no one can be definitively aware of the rise or fall of the exchange rate of a currency pair, so it is always accompanied by speculation.

Therefore, traders evaluate the probability of occurrence of both scenarios before placing a trade.

Traders and traders as Forex market players who make up almost 90% of the total trading volume, are present in the Forex market in all shapes and sizes.

Some of them have big pockets, some work on a smaller scale, but they all participate in the Forex market to close their load!

After graduating from our site faculty, you may finally be able to join this community.

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