Who are Forex Day Traders & Speculators?
This group of forex speculators and day traders forms the majority of the forex trades in the trading forex market place: these are major players in forex trade accounting for 95 % of all daily Forex trade market turnover.
Forex or is the largest and least regulated market providing the greatest liquidity to investors. The daily turnover volume is around $7.2 trillion. By comparison, the NYSE daily volume averages $500 billion a day.
The forex spot market is the most liquid. Spot, meaning that transactions are settled within one banking day. There is no central exchange of physical location. Forex transactions take place over-the-counter, 24-hours a day directly between the two telephones and computer.
Forex market participants include central banks, corporations, individual retail investors, and hedge funds. With the advent of electronic trading platforms, self-directed investors and smaller financial firms now have access to the same liquidity as larger participants.
Speculation makes up 95% of the daily volume. The other 5% of daily volume consists of governments and commercial companies converting one currency into another from buying and selling goods and services. This makes the speculators to collectively to become the big players. Speculators provide a lot of liquidity and should therefore a government, a company or an individual want to exchange their currency for another there is always someone willing to buy at any time of the day or night and because transactions are settled in the online interbank exchange where all the transactions are done anonymously.
If there was no one wanting to buy the currency you want to exchange, then you would go to transact your money and be told you have to wait to someone who wants to exchange their money with you and that is the only time you can transact. But because of the online floating forex market, there is always someone willing to transact their money with your money and they can do this from anywhere in the globe as long as they are connected to the interbank.
Most of these forex speculators and day traders will transact currencies not for purpose of facilitating commerce, but for the purpose of making a profit from the movement of prices.
The speculators and forex day traders accomplish one of the most important functions of forex market, and that is to provide liquidity and thus play an important role taking over the risks that other commercial participants hedge. The speculation activities are not clearly defined because many of the players such as banks also have speculative interests same as that of the retail investors.
Forex is very popular with day traders and speculators because of the liquidity with which positions can be opened and closed and also because of the large amount of leverage that can be obtained from the online brokers thus increasing profit margins for these participants.
The structure of the online exchange is:
Interbank Market >>> Interbank Dealer (Forex Liquidity Provider) >>> Forex Broker >>> Retail Traders
Retail forex trade currencies through online forex brokers, using forex trading platforms/software that connects them with their forex broker through an inter-net connection. Through this online forex trading platforms the traders can login and then trade Forex from anywhere in the world provided they have an internet connection.
Most of these day traders will only take part and transact during the busiest hours and only trade the major currencies: EURUSD, USDJPY, GBPUSD and USDCHF.
Best Forex Hours for Day Trading - How to Trade the Forex Market for Day Traders
To help beginners learn how to trade in forex market & practice trading this online forex market, online Forex brokers offer a free practice account called a practice trading account that beginners can practice with risk free without depositing any money, this demo also helps beginners learn how the Forex trading platform works.
About Learning Forex for Speculators and Day Traders
To also help novice traders to learn how online Forex trading works, we have provided a collection of learning guides and strategies that can help the beginner traders to learn how to trade forex market currencies and get the knowledge required to make money.
All These lesson can be found on this Page: Learn Forex Topics for Beginners and you can also find a list of all the popular Forex Strategies that you can use to analyze currency charts on this page: Forex Trading Strategies That Work.
