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Forex Stock Exchange Forum  » Forex and Stock Trading English Forum » Forex School » The Who’s Who of Forex

The Who’s Who of Forex

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1attention The Who’s Who of Forex Sun Feb 01, 2015 11:54 pm

gandra

gandra
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Far more important than knowing who trades forex is knowing who trades forex successfully, and how they do it. The players in the forex markets operate with widely varying perspectives. When one of these players enters the market, a force is created that is proportional to the perspective of the trade initiator. That force can play a role in the short term, creating radical price changes, and it can play a long term role, defining trends. Figure 2 shows the major perspectives in the forex markets.
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Each perspective carries a different attitude, goal, investment horizon, and market impact.
They key difference among these market participants is their level of sophistication, where the elements of sophistication include:

  • Money management techniques
  • Profit objectives
  • Level of computerization
  • Quantitative abilities
  • Research abilitiesLevel of discipline


Of course there are sophisticated and non-sophisticated banks, governments, corporations, investment funds, and traders. But among these segments it is the individual trader who has the least amount of external governance. Whereas governments, banks, corporations, and investment funds adhere to regulations and restrictions (to a certain extent), traders are only restricted by their level of capital.
In the absence of these external restrictions, traders fall into two groups: those who can impose internal restrictions – discipline - on their trading strategies and those who cannot: the fence-swingers, et al.

Those who can impose this discipline we will call the sophisticated investor. In the zero-sum game of forex trading, the sophisticated investor uses tools and strategies that emulate those of the highly sophisticated institutional participants to extract profits from the novice participant. It is only the sophisticated investor who has the ability to extract positive returns from the forex markets.

Forex trading has surged in recent years, as more individuals earn their living trading and the popularity of riskier investment vehicles like hedge funds has increased. The bottom line for these investors is superior returns, and in foreign exchange four major factors create a unique investment environment:

  • Liquidity
  • Leverage
  • Convenience
  • Cost


In no other market can you find a playing field that is so biased to the investor, at least on the surface. But to take advantage of these factors you have to be constantly aware of their downside.

Liquidity

In a liquid market there is a high degree of transparency, even when large transactions change hands. The sophisticated investor understands what this means: forex attracts huge players. As a trader grows in sophistication, they understand that these huge players have significant price impact, and watch for their market entry.





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2attention Re: The Who’s Who of Forex Sun Apr 26, 2015 10:58 pm

Vlad

Vlad

Yes, Forex is a large organism. So many people and organizations want to earn! And someone is able to do it.

3attention Re: The Who’s Who of Forex Thu Feb 01, 2018 10:12 pm

Remainder

Remainder

Just a few earn real money of forex and I think it's reasonable. Because if all got a good profit, the market wouldn't stand even a week.

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