Forex market participants.
First of all, you should understand what the Forex market actually is; in fact, it is a
virtual exchange that unites all existing currency markets.
The merger occurs due to the fact that Forex dealing centers use different markets or independently create trading platforms to increase liquidity.
Some people enter into agreements with several large banks, others simply enter the interbank currency exchange, and others use international exchanges. That is why the circle of participants in the Forex market is quite wide and diverse, but several main categories can still be distinguished.
Forex market participants are market makers, national and central banks, large corporations, dealing centers, and traders. All of them influence the supply and demand of currency to varying degrees, and thus shape the market rate.
• Market makers are the largest players, and can be national banks, major corporations, or individual traders. An example is George Soros, who managed to bring down the British pound. The main characteristic of a market maker is its ability to influence the exchange rate by buying or selling large volumes of it.
• Central banks — their main task in the foreign exchange market is to regulate the exchange rate of national currencies; they can act as both buyers and sellers, depending on what needs to be done — strengthen the currency or, conversely, lower its rate.
• Dealing centers — intermediaries that organize dealing; sometimes their turnover reaches several hundred billion dollars per month. Therefore, despite the fact that these participants conduct exclusively speculative trading, their influence on the foreign exchange market cannot be overlooked.
• Traders – these are mostly small traders with deposits of no more than a few hundred dollars, but there are also large investors with billions of dollars in turnover.
The Forex market is quite complex and multifaceted, which is why it is so difficult to make an accurate trend forecast ; it is unknown which participant or which event will have the greatest impact on the current situation.
