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The currency market is an international organiz

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Currency Market

The currency market is an international organization of open trade, ie a decentralized, self-regulated market with no central exchange or any controlling party, unlike stock markets and futures markets. This structure eliminates fees for exchange and mediation and thus reduces transaction costs.

The currency trading market includes many participants - with different needs and interests - who trade with each other. Participants can be divided into two groups: interbank markets and retail markets.

Interbank Trading Market
The interbank currency market includes transactions between central banks, commercial banks and financial institutions.

Central banks - national central banks (such as the US Federal Reserve and the European Central Bank) play a very important role in the currency market. As a major monetary authority, as its role is to stabilize prices and economic growth. To do so, they regulate the entire money supply in the economy by setting interest rates and reserve requirements. It also manages the country's foreign exchange reserves that can be used to influence market conditions and exchange rates.

Commercial banks (such as Deutsche Bank and Barclays Bank) provide liquidity to the foreign exchange market as a result of the large volume of trading each day. It is such trade as foreign exchange conversions on behalf of the needs of customers while some of them are carried out by trading rooms in the same banks.

Financial institutions - Financial institutions such as fund managers, investment funds, pension funds and commercial brokerage firms that trade in foreign currencies as part of their commitments and seek the best investment opportunities for their clients. For example, portfolio managers will have to engage in currency trading in order to buy and sell global equities.

Retail Market

The retail market supervises transactions between investors, speculators and small investors in the market. These transactions are carried out by brokerage firms that act as intermediaries between the retail market and the interbank market. Retailers are hedge funds, corporations and individuals.

Reserve funds - reserves and private investments that forecast and trade in different categories using leverage. Reserve funds are trading and taking advantage of opportunities in the currency market. They carry out their operations from selling or buying after macroeconomic analysis, which reviews the challenges that affect the state and its currency. Given the large amounts of liquidity and aggressive strategies, these funds are one of the major contributors to the dynamics of the currency market.

Companies - representing companies engaged in import and export where these activities are carried out with their foreign counterparts. Their core business is the requirement to sell and buy foreign currencies against commodities and expose them to currency risk. Through the currency market they convert currencies to protect themselves from future fluctuations.

Individuals - Individual traders or independent investors in currency markets who rely on their own capital to benefit from speculative exchange rates in the future. They work through trading platforms for currency markets, which give a simple difference between the price of supply and demand and the immediate implementation of operations in addition to accounts High margin.