Home
Forex Blog
Site Search
Site Map
Learn Forex
Learn FX Trading
FX Trading Solutions
Trading Information
Mini FX Accounts
More Forex Resources
Currency Exchanges
Banks - Aa to Che
Banks - Chi to For
Banks - Fou to Lar
Banks - Las to Nor
Banks - Nor to Sal
Banks - Sal to Tyl
Banks - Uni to Yum
Investments
Investments II
Deutsch
Deutsch 2
Español
Español 2
Français
Français 2
Italiano
Italiano 2
Nederlands
Nederlands 2
Nihongo
Nihongo 2
Polski
Polski 2
Svenska
Svenska 2
Português
Português 2
Norsk
Hangungmal
Hangungmal 2
Russkiy Yazyk
Russkiy Yazyk 2
Billionaires
Pinyin
Pinyin 2
Greek
Suomeksi
Suomeksi 2
Suomeksi 3
Suomeksi 4
Stock Brokers
Venture Capital
Refinance
Sijoittaminen

XML RSS
What is this?
Add to My Yahoo!
Add to My MSN
Add to Google
 

Forex Trade


It has been estimated that forex trade top well over one $1 trillion per day. Unlike one might expect, the majority of that market volume does not come from exporters and importers, but from speculators, investors, banks, etc. who try to profit from market fluctuations.

There are several major classes of participants in the trade. However, these classes can be classified into two major classes with primarily different objectives in participating in forex trade:

1. Importers/Exporters
2. Speculators, banks, arbitrageurs, investors etc.

Forex Trade Importers/Exporters

The global trade usually happens in multiple currencies. Therefore, companies need to use the forex market to change one currency to another in order to pay for goods or services received from a foreign company.

Many of these same participants use derivatives markets to decrease market risk (hedge) from currency fluctuations. This is because the time of payment or receiving of the money usually happens at a future date instead of a cash transaction.

This category includes the millions of tourists annually, who have to change their home currency to a foreign currency for travel purposes.

Forex Trade Speculators, Banks, Investors, Arbitrageurs, etc.

The major part of global FX trade does not involve actual selling or buying of goods or services. Instead, there are market participants that try to profit from their views on the forex market fluctuations by buying and selling currencies.

These market participants are essential to forex markets, because they create much of the liquidity of foreign exchange markets.

Also, this category includes investors, investment companies, insurance companies, and banks that manage currency transactions to increase returns on their investments. In many cases, the best returns are achievable by investing in foreign currency denominated assets.


Risk Disclosure and Terms of Use



From Forex Trade page to Forex Guide index