If you are a newbie to Forex trading you will want to know who all plays on the same field as you. It’s always a good idea to know who you are up against and who is in your corner at any time. However, when it comes to Forex trading the traders are what keeps the system alive. Sure, there are several different types of traders ranging from the ‘major players’ right on down to the minor ‘independent traders’ but each has the same access to the same currency trading information so in a way, the playing field has been evened out so that traders like you can still be part of the same action as the big boys. But who is involved?
1 – The Big Boys
Alright. Pop Quiz: Who are the Big Boys? If you said Ford, Chev and Chrysler you would be wrong. In the Forex world the Super Banks are the Big Boys. This includes but is not limited to Deutsche Bank, HSBC, Citi and Goldman Sachs. These are truly the big players. The best part about this is that there is enough room in the Forex market lounge to seat not just the big players. There are several other members who have just as much privilege to data as the top end players.
2 – Large Companies
In case it didn’t occur to you, many different sized companies need to exchange currencies every so often. That means that small businesses all the way up to large multinational corporations find themselves involved in the Forex market. It’s actually very healthy for both the participant and Forex to see this kind of activity. It makes the reality of trading seem more attainable if it’s not all populated by Big Guys.
3 – Governing Bodies and Central Banks
You had to expect this to get a bit on the political side sooner or later. As it turns out, governments and central banks play a vital role in the Forex market. The way they participate is interesting in that in order to make profits, the central banks don’t trade currencies. What they actually do is facilitate the monetary policies of their specific country’s government. Stability is pretty much the buzzword with central banks and the way they typically work to keep their exchange rate stable through regulating the supply and demand of their currency.
4 – Individual Retail Traders
These are the guys like you and me. Some of us have some math smarts, others have engineering smarts. Most of us are self-taught in the Forex world and looking to build our future with long term investments. Oh, and we have probably the better parties than any of the other three types of traders because we’re cool. We’re not big players but we are sometimes really smart about what we do in the trading market. Plus, we’re part of a growing group of active participants in Forex trading. Sound like something you’d like to try? We’re not going anywhere and would be glad to welcome you aboard!