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Foreign Currency Trading

Today foreign currency trading market is the largest and the most liquid financial market in the world. The daily turnover of the market reaches up to $5 trillion. Forex popularity keeps on growing rapidly due to the fact that day by day more and more traders get involved in the market.

What Makes Foreign Currency Trading Popular?

Forex currency trading is very unique in its essence because there is no dominance and the market stays out of control. Everyone can become an active participant of the market. Forex currency trading attracts more and more people due to some features that make it unique. Here are the key features of the market:

  • High liquidity: It gives investors an opportunity to trade with any volume
  • Availability of the market: Market is active 24 hours a day, except for weekends

Learn more about What is Forex Market

Participants of Foreign Exchange Market

In general, the most influential participants of the market are Central banks, Commercial banks, Hedge funds, Brokers and Investors.

  • Central banks, such as the European Central Bank, Federal Reserve System of the United States, the Bank of England, Swiss National Bank and the Bank of Japan play a significant role in the market. They increase or decrease the value of their own currency or they help other central banks to do the same, they reduce unwanted fluctuations in exchange rates. The aim of central banks is not to get a profit, but to regulate the economy of their countries.
  • Commercial banks, such as Societe Generale, Barclays, etc. provide the liquidity in the market.
  • Hedge funds are becoming more and more influential in the market due to the high trading volumes and aggressive trading strategies.
  • Brokers are not market makers, they are intermediaries between the market makers, who offer the most favorable prices to their customers.
  • Investors trade on the Foreign currency market with their own resources to make profit from speculations on the exchange rates.

Foreign currency Trading is really very attractive but every single investor should realize that it is also very risky to trade here, as the market is very unpredictable. So, before entering this boundless world, one should have a good basis of knowledge and practice.

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