The players of Forex had a long history. Today, anyone can enter the Forex market with his internet connection from home, like you in the US, buying a trade in Japan from your home. But it was not smooth like this in the past. In this article, we are going to take you on a never-ending journey that started in the 1990s and is still continuing with great success.
The Journey of Forex market
It would be very interesting for you to know that Forex was not opened for all in the 1990s. It was the beginning of Forex. Only super players could enter into the Forex market with a huge amount of cash, even at this time, like $50M, for instance. You could now understand that the beginning of Forex was not for retail traders like us or for small banks. It was only for the largest players in the world. But with the increasing use of the internet, Forex the opportunity it presented to grow into an industry worth trillions of dollars today. Thanks to the internet, that you can read articles about Forex and begin your first step into Forex trading.
Knowing about the major players
You are going to be blessed with a short history of the major players, as the ultimate goal of Forex is not to understand its past, but to understand how the market works and you could make money from your Forex trades. This will only give you a short understanding of how the Forex turned into an industry today, that you are seeing today.
Major Players in the Forex
- The Government and the Central banks
At the beginning of Forex, the governments and central banks had a significant influence on the trading process. It required a lot amount of money and the government could afford it and the central banks, so they were on the market. They also had the influence to control the inflation of money by changing the interest rate.
Those who are trading bonds might have understood the role of central banks in the investment industry. Things are strongly interconnected in the Forex trading business so dig deep to know more. The more you learn, the better you will become at trading.
- The Super Banks
The super banks are also known as interbank. As we have said, they were the initial players in the Forex market. They would also control the exchange rate of their currencies. Some of the super banks are Citigroup, USB.
- The Speculators
These speculators include you and me, and all retail traders. They have come into the FX market with a simple goal in mind. To make money. Note that speculators often fail to stay on the profitable side of this investment business. So, if you follow the speculators blindly, the chances are very high that you will be losing money most of the time.
- Large Business Enterprise
This is crucial to understand if you are to understand Forex. As you have seen, in Forex, many countries’ currencies are being traded by buyers and sellers from around the globe, it is important for large business groups to exchange their currencies for foreign currencies.
Take the example of Mercedes-Benz, who made their cars in different countries, the approximate number is more than 20 countries! In order to buy an engine from a different country, they have to exchange their currency to that currency, from the German currency, the Mark to the US currency, the US Dollar. That is why Forex is important for large business enterprises to keep their businesses going.
Conclusion
This is only a short history of the major players of the Forex. In the beginning, these major players had control over the FX market, but nowadays they have an equal share as any other in FX, as it has become very large and widespread around the globe.
