The Forex Market's Big Players
In general, any individual carrying out an operation or transaction directly or indirectly affecting the Forex market is thought-out to be a full player in this market, whether or not he is deliberately involved in this market. The key players in the Forex market consist of large institutions in addition to individuals, personal forex traders and financial institutions; we will have a review on who are exactly the major players in the Forex market.
Central Banks
Central banks such as the Federal Reserve (US Federal Reserve) or the ECB (European Central Bank) adopt monetary policies that could have a direct effect on the Forex market, these national institutions can command somewhat large monetary masses in order to secure the financial stability of the country in question, when the order of money vary tremendously, this is reflected in the price of the national currency concerned.
Hedge Funds
The Forex market can be specifically liquid, and this is one of the advantages that we can attribute to it and which reassure many traders to speculate on it, is what many hedge funds that commission a significant portion of their portfolios to Forex currencies.
Note that hedge funds (managers of portfolios for private investors, investment funds) are also key players in the Forex markets, their doors are opened for investors from tens of thousands of dollars in capital and the states of these funds on the markets are thereupon also high.
The hedge fund is established on short-term investments, also known as hedging investment, which inheres in reducing losses when market prices start to fall.
Brokerage Companies
In general, brokerage firms oversee the financial assets of important clients, such as the endowment or pension funds. They represent one of the leading players of Forex market. These institutions oversee transactions with international securities portfolios, buying foreign currencies to assure their clients a guaranteed profit. These are investment transactions. They are not stationed on speculation.
Forex exchange transactions carried out by the brokerage firms mostly concern trading activities on monetary funds, investment funds and international companies. Their international funds vary by investing in corporate and government securities. General Motors, Nestle and Xerox are examples.
Commercial Banks
Commercial banks manage most of the volume. With the Forex market trading volume of $ 5 trillion daily, with this important volume, the banks are the market players that execute a huge part. It is not surprising for big banks to involve in trading; the value of their financial transactions can reach trillions of dollars daily. The bank’s activities in the Forex market can be speculative activity, services rendered to customers or the account of the bank itself.
Big Enterprises
A large number of companies with activity abroad are also involved in the Forex market. Payments between these agencies for the purchase or sale of goods and services can be made in different currencies; these exchanges also represent many billion dollars traded daily on the Forex market this to speed up commercial relations.
These companies apply the services of commercial banks since they do not have direct access to the market.
Forex Brokers
The main players involved in the Forex market are the Forex brokers; they represent the majority of Forex players. They are applied by individuals who hope to derive the advantages of investing their assets in the Forex market. There are millions of self-sufficient Forex brokers involved in the market. However, regardless of their large size, their impact on the Forex market is almost limited compared to other Forex players (brokerage firms, the hedge fund, commercial banks and central banks).
The Forex engages more and more public since anyone can take advantage of currency fluctuations. However, before embarking, it is essential to have the necessary training to help us in this market.