News & Blog
The Main Players in The Forex Market
- May 25, 2021
- Posted by: Admin
- Category: Blog
In our previous posts, we have talked about some important forex trading skills, the markets’ benefits, even its history in the world. We haven’t, however, discussed the big players within the market. This is just as important to know, and we here at Smart Prime Academy want to explain below.
Before the late nineties, only the most elite could be in this trading market, and by the most elite we mean the most rich. With the initial requirement of 10-50 million dollars in order to start trading, it’s safe to say this market was not accessible to the normal everyday person.
Luckily, with the ever increasing rise of the internet, forex brokers are able to provide trading accounts to regular traders like us.
The Big Banks
The forex market is decentralized, meaning that the biggest banks in the world are the ones who choose exchange rates. They are also generally in charge of the bid/ask spread, whether we like or dislike the outcome.
Another term for these big banks as a collective is the “interbank market”. The amount of forex transitions these banks perform is beyond comprehension, whether it is for the customers or themselves.
Popular Commercial Companies
Companies play a big part in the forex market, since they do a large amount of business. An example is Apple exchanging it’s american dollars for the Japanese yen when buying parts from Japan for their products.
Central Banks & Governments
Just like commercial companies, national governments involve themselves in the forex market for their trade payments, operations and FX reserves. There are certain situations where central banks can realign exchange rates, whether that is done directly of their own volition or verbally. If central banks believe their currency is priced either too low or too high, they can start huge buy/sell production to change exchange rates.
Purchasing and holding foreign currency in hopes to sell it for a higher value down the road is known as currency speculation. Speculators are wanting to see price fluctuations that work in their favour. The reason it is called speculation is because of the uncertainty of these peoples claims. No one truly knows if a pair’s price will increase or decrease. Normally, traders will assess both sides of the coin before placing a trade, whereas speculators will hold onto the hope of one overpowering the other. Some or rich, others are less so, but the end goal is simple; these people want to make loads of profit.
How We Can Help
Here at Smart Prime Academy, we want to provide you with everything you need to know about the forex market. This does not only include free to view blog posts, but also involves affordable foreign exchange market courses in Richmond Hill. You heard us right, our team with years of experience would like to extend our forex knowledge to you, right from home! To learn more about how to sign up for our courses, call us today at 1-877-870-0092.