Who Participates In Forex?

In this post, I am going to cover the forex participants that is onvilve in the everyday trading of the huge Forex market.

For those of you who have this question ins your mind, stay tuned and your knowledge about Forex will surely be boosted dramatically.

So, here are the Forex Partcipants:

The Interbank

• Interbank is a loose term held over from the early days when banks tradedfor clients and themselves over the telephone. 
• Today, their  trading is conducted electronically, 
• Most of them act as market makers for the currency pairs traded on the spot currency market and offer the quotes that ultimately drive the pricing you see in your trading software.

Institutional Traders

• Institutional traders represent corporations or hedge funds trading directlyon the interbank or through retail currency dealers. 
• Most institutional traders representing corporations are involved in some kind of hedge to protect thevalue of their goods or services from exchange-related risks. 
• Institutional traders may include professional money managers looking to diversify and hedge against the risk of loss in the equities market.

Central Banks

• Central banks play an important role in guiding the forces of supply anddemand for a country’s currency on the forex market. 
• They are also tasked with controlling the money supply of a nation’scurrency, which directly affects supply and demand. 
• Low supply and high demand tend to increase the value of a nation’s currency, whereas highsupply and low demand will devalue it. 
• Balancing growth with inflation is the typical goal of central bank policies. 
• Central banks may also change their overnight lending rates as a tool against inflationary pressures. 

Retail Currency Traders

• The average retail trader doesn’t have the credit or capital required to participatedirectly with interbank trading partners. 
• Retail currency dealers act as market makers for small-volume currency traders. 
• Currency dealers manage their risk by balancing their portfolios of retail orders amongthe customers for which they are making a market.

Retail Speculators

• Retail speculators may be trading their own account or client funds through a managed account program. 
• Some speculators at the retail level may be trading for clients looking to hedge risks; however, most are looking to generate profit. 
• They are too small to trade directly on the interbank and clear their trades through one of the many retail dealers available to make a small-volume market for them. 

There you have it, all the different type of organizations or individuals that trade the Forex market..

I hope you like it.

Yours sincerely,




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