Who trades Forex?
Posted by Homi .M on 12 September 2012 11:21 AM
When it comes down to who trades Forex, the answer used to be largely confined to well-capitalized financial institutions and corporations. While such large players still dominate the Forex market in terms of overall Forex transaction volumes, the recent rise of online retail forex trading has made the Forex market accessible to just about anyone with a computer, an Internet connection and some funds to put at risk.
There are many players in Forex market :
  • Banks
The greatest volume of currency is traded in the interbank market. This is where banks of all sizes trade currency with each other and through electronic networks. Big banks account for a large percentage of total currency volume trades .Banks facilitate Forex transactions for clients and conduct speculative trades from their own trading desks. When banks act as dealers for clients, the bid-ask spread represents the bank's profit. Speculative currency trades are executed to profit on currency fluctuations. 
  • Individual investors
The volume of trades made by retail investors is extremely low compared to that of banks and other financial institutions. But the Forex trade is growing rapidly in popularity. Retail investors base currency trades on a combination of fundamentals and technical factors .
  • Bank Forex Customers
An important type of customer that trades Forex through the dealing desk of a major Forex bank .
  • Currency Futures Traders
Smaller currency speculators traditionally traded currency futures using the major futures exchanges .Futures traders might stand and deal directly on the exchange floor to keep in touch with the ebb and flow of the market, or they might sit in an off-floor office monitoring market movements.
  • Retail Forex Speculators
These days, the rise of online Forex trading has opened up the retail forex market to just about anyone with an online computer and the desire to place their funds at risk trading Forex.
Some such retail traders may just use a Forex trading robot to trade their personal account for them. Others might use Forex trading signal subscription services or signal generating programs to give them trade ideas. Still others enjoy the fact that they can now develop their own automated trade plan with the aid of an online Forex trading platform capable of supporting automated trading.
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