Actors in the Forex Market
In the forex market, of course there are several parties involved and giving influence in it or the term as a player in the market. Forex market players can be divided into 6 as follows:
1. Bank
Banks play an important role in the forex market. In this case the term Interbank Money Market (PUAB) is known. PUAB itself has a role to fulfill almost all the needs of buying and selling and currency circulation in the global business field. In carrying out its functions, sometimes banks will process the buying and selling of currencies on behalf of their customers. But in large quantities, the transaction will be carried out on behalf of the bank itself.
PUAB itself is also used by forex brokers to gain profits in bringing together forex sellers and buyers directly. From there forex brokers can benefit not a little. But now, the system used by PUAB has been developed with an electronic system that is more effective and efficient.
2. Business Needs
The second forex market participant is the need of a company or business actor when making payments using foreign currencies. Basically a business sometimes requires funds in the form of foreign currency when making transactions, but actually the direct effect is not too pronounced in the state of a currency.
The results will be different if you talk about a large corporate corporation. Here large companies have a large and unpredictable share if they carry out a large number of foreign currency releases. When they release it, the market or speculators cannot expect it directly. As a result, the value of a currency can move up or down.
3. Central Bank
The Central Bank in this case has a role as the controller of the money supply, the occurrence of inflation and also related to interest rates. With its very important role, the Central Bank can easily influence the development of the forex market.
One of the advantages of a country's Central Bank is that just making an intervention is enough to create a turmoil on the forex or foreign exchange market conditions. This is due to concerns about the actions of the Central Bank which can increase or decrease currency rates. So a little more sustainability of the currency market is indeed determined by the movements of the Central Bank in that country.
4. Investment Management Company
Generally, Investment Management Companies that play in the forex market do not make this business the main source of income especially as a step of speculation. The company is a body that usually manages several funds such as pension funds or donations from the foundation. All funds that they use in the forex market are sometimes only "played" to get additional revenue for the company.
5. Hedge funds
Next is Hedge funds. Hedge funds are companies that do play in the forex market as speculators. The funds they release are truly maximized capital in the forex market, there is no other reason for them except to get a large profit from these activities.
Surprisingly enough, Hedge funds have the ability to grow big and even have the ability to influence currency values better than the Central Bank. If this happens it will be very difficult for the value of the currency to move well because it is already under the control of a corporation that is oriented to profit.
6. Forex Brokers / Brokers
The last is a forex broker. Until now, forex brokers are still the party who most profit from the forex market. Basically, forex brokers can be individuals, groups or companies that have jobs to bring together customers / buyers with sellers of foreign currencies.
The existence of a forex broker is indeed very helpful for forex business people or commonly called forex trading. But not infrequently also, forex broker companies that are not fake aliases are actually the most detrimental parties, especially for new players in the forex business.
The following is a review of the definition of forex, functions, and actors in the forex market. Hopefully it can be your additional knowledge about useful forex trading.
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