Are there football lovers in the house?
Before forextowers turns to football fan page, let’s delve into our business proper. You know why? Fans could be crazy at times, but not here.
A little joke is not bad at all, because all work and no play make Jack a dull boy; said my PE teacher during my elementary days.
Before we check on forex players, can we take some few minutes to read a little story about what we are into? The history of anything and everything matters.
Before the late 1990s, forex trading was only carried out by banks and large institutions. For people like us to participate then, I think you will be required to have at least10,000k to 50,000k dollars.Where in the world could 4xPipSense get such amount of money to start with?
Millions of dollar to kick start?
I think it could be a wise option to participate in “44 Minutes” movies and have the Bank of America broken down. At least a bag of that cash will do you real good.
Upsss!
Don’t think on the wrong side buddy, you could get killed by the LPDA or FBI in an attempt to break the bank. And you end up being killed or jailed for life.
Stare clear from every form of crime to make money. It hurt more than it can do you good.
Can we move on?
O yea! The rise of the internet has given all and sundry the opportunity to join the forex game as "retail" traders.
Let’s hit the hammer on the nail. Below are the major forex market players:
The Super Banks
The decentralized nature of the forex market has given these players (largest banks in the world) the ample opportunity to determine exchange rates. They are responsible to make the bid/ask spread based on the supply or demand for currencies.
These banks, known as the interbank market, carry out huge amount of forex transactions per day for themselves and their customers. Some of super banks include UBS, Barclays Capital, Deutsche Bank, and Citigroup.
Commercial Companies
Large companies also take part in forex market for the purpose of doing business.
Gaskia, final, infinito.
Permit me to cite an example. A US based company that gets supplies from Japan must first of all exchange his currency, now USD, to Japanese currency, YEN. This is to enable them buy goods (shoes, electronics, cars etc) from Japan. Getting back home, they sale those goods with a profit and have the USD back. This is simply a kinda physical exchange if we may call it so.
The volume of trade carried out by large commercial companies is much smaller compared to those in the interbank market. They therefore carry out their transactions with commercial banks.
Mergers and acquisitions (M&A) between large companies can also create currency exchange rate fluctuations. This can move price a lot especially in international cross-border M&A where great currency conversations takes place.
Governments and Central Banks
Governments and central banks, like the European Central Bank, Bank of England, and the Federal Reserve (US), are strongly involved in the forex market. They participate in the market for their operations, international trade payments, and handling foreign exchange reserves.
Central banks have a lot of effect in the foreign exchange market especially when they adjust interest rates to control inflation. By doing this, they can affect currency valuation. There are also certain occasions when the central banks will intervene directly or verbally, in the forex market particularly when there is need to realign exchange rates. The central banks could trigger a massive sell or buy operations to change the exchange rate when they think that their currency is priced too high or too low.
The Speculators
These are people who came to this business to make good profit. They make up about 90% or more of all trading volume daily. Speculators come in different shapes and sizes. Some enroll with fat investment while others came with small capital, but all of them engage in the forex simply to make good sum of money.
You can be part of this multitude once you study hard! But still yet, there is much need to know about the history of forex trading.
