Important For Beginners! Knowing the Type of Forex Market Actors
Forex market participants – The forex market is a fictitious market and in it there are many different people. This difference usually exists in the person’s purpose of trading, besides the need, understanding, and also the mindset can also affect the condition of people in the market.
Some ordinary retail traders enter the forex market in order to gain profit while other players enter the market with the aim of securing their asset or hedge funds, and the so-called big players or banks have the goal of maintaining stability the value of the currency.
If you look at the differences of market participants who have a lot of character, then it is certain that the forex market is a market that is considered the most dynamic. As a retail trader the perpetrators who really want to profit in the forex market, of course, must be able to understand the various characters owned by the market participants. For example just like in traditional markets of course you can see the traders who give a lot of discounts, the goal is to be able to dance buyers. While on the other hand there are also traders who do pegatokan at its selling price with high enough, the goal is in order to achieve profit maximally.Because the trader knows that the goods sold will be very desired by the buyers.
So, what are the types and types of actors in the forex market? Here are 4 types of actors in the forex market.
Hedge is an adequate market player type that the forex market is a place they can place to protect the value of their owned assets and to reduce the risk of a decrease in the value of their assets. For foreign players with international coverage, the forex market is the most suitable place to protect assets.
These business people will usually look for an asset that has a correlation as opposed to the assets they currently have.
The second type is the speculator, which is the opposite of the hedge. When the hedge gives the view that the forex market is the most suitable place to protect and reduce the decrease in the value of their assets then speculators will see that the forex market is a place they can use to gain profit and more dare to take risks if it is a loss.
As the name implies, market participants of this type will do speculation about the direction in which they will believe that the asset will begin to move in accordance with what is desired. If assets are moving in line with their food expectations they will make a profit but if they do not then they should bear the risk of loss.
The third type is the type of manipulator. Performers with this type of manipulator will have a purpose to manipulate the price. However, you do not think negative first. Because a manipulator certainly can not do price manipulation in accordance with what they want.
Manipulators should try to keep prices stable as they want. The manipulator is obviously the Central Bank. The bank will try to intervene into the forex market directly, the goal is to keep the currency rate steady. But you have to remember that they also can not directly perform the process of price movement in accordance with what they want.
For example, the case that occurs when the BoJ intends to stabilize the Yen currency when there is a referendum Brexit is completed, where the currency of the Yen is invaded by many investors and market participants so that it will make JYP value is considered unnatural.
And the fourth is the type of facilitator. The facilitator is a conventional bank and broker. Where they do not make for profit when doing transactions inside the forex market. The facilitator will benefit from the service fees earned when the trader wants to trade in the forex market so as to require the services of brokers.
Brokers are another name for brokers. Forex brokers are a brokerage company that will deal with foreign currency, meaning the role of a broker is that will help you to make transactions in the forex market. Brokers also will bridge you to connect you with the market so you can do currency monitoring for 24 hours a day.
Why a trader needs broker help? Because forex brokers have higher knowledge and more experience about forex transactions. Especially on the transaction objects that will be of high value such as silver, gold and other important documents. If you are a beginner retail trader who wants to be involved in the forex world then you need to choose the right broker.
Those are the types of actors in the forex market. There are four very important actors you need to know. As a retail trader let alone a beginner, of course you will enter in the type of speculators who try to gain profits and must dare to risk losses. So you need to use the appropriate level of margin with the many risks you can get. For beginners, understanding about the character of market participants is very important so as not to interfere with trading activities in the real account in the future.