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Participants of market FOREX are the central banks of the states, market-makers banks, the companies exporters/importers, the investment companies and hedge funds, the insurance companies, corporate and private investors, and also the companies-intermediaries giving access on the market private and legal bodies.
The central Banks are the largest participants of the market who do not establish any formal restrictions on movements of the prices. However they carry out regulating role, defining level of the basic interest rates and performing operations in the open market under the repayment or sale of securities, stating the wishes to participants of the market and giving a situation assessment (so-called verbal interventions), and also in special cases reserving the right to itself for direct currency interventions (purchase or sale of national currency on purpose to prevent its further reduction in price or a rise in price).
Market-makers are the banks independently quoting currency for other participants of the market. To define the quotation they have received the right on the basis of the consent to adhere to a set of the international standards. The legislation in the different countries differs, the general main requirements are maintenance of certain volume of the capital on reserve accounts of Central Banks, the obligation at any moment to give out on demand the quotation to any other participant of the market and the obligation to make under the given out quotation the transaction with currency both on purchase, and on sale, without dependence from the dominating market tendency and activity of transactions.
Stability of the services and also the code of laws and the rules developed by the regulating organizations (for example, FSA to Great Britain, which activity it is in turn regulated by Bank of England), plus conditional «the honor code», created by market-makers, provide uninterrupted operation of work of market FOREX.
The company exporters/importers, spending changing operations in the market, do not set as an object direct extraction of profit from these transactions, using the international mechanisms of exchange with a view of performance of the basic economic activities. The insurance companies, besides this main function of the market, use it, along with hedges-funds, for hedging of risks under profile transactions. For example, the company importing production from Germany, bears the risks connected with possible rise in price of the European currency, and can compensate these risks; buying euro in advance calculated volumes in relation to any other currency.
Investment funds, corporate and private investors, aspire to receive the income directly from operations on currency purchase and sale, thanks to a difference of the prices during the various moments of time, and the companies-intermediaries provide with it access (exit) on the market, receiving thus market quotations from a market-makers.
The choice of a foreign currency trading service is not an easy task. And one shouldn’t dash to make a decision on such a service.
It is very important that you follow some general tips – today the online technologies give you a really unique chance to choose exactly what you want for the best price on the market. Strange, but most of the people don’t use this opportunity. In real life it means that you should use all the tools of today to get any foreign currency trading info that you need.
Search Google and other search engines. Visit social networks and check the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to create a true vision of this market. Thus, giving you a real opportunity to make a wise and nicely balanced decision.
And also sign up to the RSS feed on this blog, because we will do the best to keep this blog tuned up to the day with new publications about the topic of foreign currency trading for dummies and important trends on the currency exchange market.
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