What is forex trade all about? Forex trade is trading in the currencies of different countries. Another aspect of the trade is about the time; yes you ought to be extremely careful about the time you choose to invest in the currency of a different country. The trades in this market are given shape to by the broker companies. They do the same in exchange of some or a little amount that they charge as a brokerage. It’s in many ways much similar to the stock trading. But the major difference between currency trading market and the capital market is that majority of the trades are done by the banks, and the governments in the FX market and the involvement of the common people is much less. How ever it’s just the opposite in the capital market. The financial and political state of the country influences the ups and downs in the forex.
Millions of trades are placed daily. However from the studies conducted, it’s been noted that the banks are the biggest participants of the forex market and these trades are called inter bank. And 50 percent of the money that they make is from currency trading and not only that, 50 percent of the trades, that are done in the forex market are done by the banks. In other words this huge market provides the wealth to the banks that they further pass to the share holders and the account holders of the accounts those accrue interest in to them. Over the night normally the banks would invest millions in the forex market and the next day they would make the same money.
The commercial companies are also participants in the forex market. Many of the commercial companies such as the Deutsche bank, UBS, Citigroup, HSBC, Barclays, Merrill Lynch, and JP Morgan Chase do actively trade currencies daily and they are amongst the movers and the shakers of the forex market. They actively trade in the forex market with an intention of growing their overall wealth and to create value for the share holders who invest in them. Apart from them there are also millions of smaller companies those are out there and they are not involved in this market to a huge extent like the ones mentioned here though but still they do have an existence in the forex market. The central banks located in London, New York and Japan, are very actively involved in trading in the forex market.
Source by John S Baker