Who are the major participants in Forex

If you imagine that all those trading in Forex and highlight the major players, they are divided into bulls and bears:

  • Bulls – market participants trading in the rising currency,
  • Bears, respectively, are those trading in the falling currency prices.

In most cases, the market is balanced by those actors. When one of the parties outweighs, the quotations can change very sharply and strongly. No doubts, market volatility can destroy the plans of the traders as well as their earnings.

Who are the major participants in Forex

Basic regulatory structures

Big banking organizations have always been major participants in currency transactions. A major part of all foreign exchange transactions depends on them. Non-banking institutions participating in the transactions keep their capital in banks. They cooperate to get maximum profit. Naturally, those trading on Forex also keep their money in banks.

One of the main functions of central banks is to raise capital, for which they, in turn, cooperate with other smaller banks. These financial institutions can meet the needs of depositors as well as enter the market without intermediaries to work with currency pairs using investments.

Banks’ influence on foreign currency turnover in the world

In all world markets, the most powerful impact of currency is felt in the work of the main (central, state) banks, where financial turnover is billions of dollars each day. Big transactions they conduct may influence the state prices. This is their distinguishing feature in relation to the others.

The main job of central banks as market participants is regulation of the foreign market. To be accurate, they work on reducing the risks of sharp fluctuations of the national currency. And if you are trading Forex, you probably observe the actions of the central banks, because even the most minor change they make directly affects the state of the market, and, as a result, your earnings.

Participation of commercial organizations

Large companies participating in international transactions have considerable weight in the Forex market. They create a constant demand for the world currency or sell it. In its turn, borrowed money is invested as a deposit.

Firms working with invested foreign assets also affect the market. These companies represent large investment funds, they adhere to a policy of maximum risk reduction, when managing assets. Funds are held in the form of large corporations’ shares and of the governments of other countries.

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