How Forex Trading Works?

Who Trades in the Forex Market?

The core of Forex trading involves major investment and commercial banks worldwide, which engage in currency trading through what is known as the "Interbank Market." Over 2,000 investment banks globally are pivotal in organizing Forex trading activities.

From these major investment banks, there are two categories of traders:

1. Speculators: This group aims to profit from currency price fluctuations. It includes investment funds, asset management companies, hedge funds, and brokerage firms that provide Forex trading services to individual retail traders.

2. Non-Speculators: These traders do not seek to profit from trading but need foreign currencies for various purposes. Examples include central banks that purchase currencies from the Forex market to provide foreign exchange for their governments, and multinational corporations that require foreign currencies for international trade.