Participants In The Forex Singapore Market

Posted by admin 28/10/2013 Comments are off 750 views

Forex Singapore

This article is about the main participants in the forex Singapore market.

The forex Singapore market is used by many different entities.  You should be aware of who they are and how they fit into your forex trading plan.

Central Banks and Governments

The central banks within the different global countries play a huge role in the forex market.  They make use of the large fund reserves at their disposal to stabilise the current rate of their currency.  They influence the forex rates by their control over the inflation rate, the base interest rates and the domestic money supply.


As far as the commercial transactions go, the banks undertake most of the forex transactions.  They also undertake a massive amount of speculative transactions on a daily basis.  They undertake transactions worth billions of dollars daily – some of these transactions are on behalf of their clients and some for their own account.

Hedge Funds

Word in the forex world is that the majority of transactions done in the market are speculative in nature.  This implies that the entity purchasing currencies does not want actual delivery of the currency.  The transaction is entered into with the main purpose of making a profit from the currency price movements.  The retail traders are no threat to the massive hedge funds in the speculative market.  They control such huge amounts of funds that they are way above the retail traders.

Large Corporations

Large corporations enter this forex market because they need foreign funds to pay for services and goods purchased from other countries.  They also use the forex market when they have to convert currencies they receive for the sale of goods and services to foreign countries.  Some corporations that have international links may require foreign exchange to fund their international branches or to pay employees in foreign countries.

Forex Singapore Retail Traders

This section includes the traders who speculate on currencies for profit.  This market is growing on a daily basis as individual traders have gained access to the market.  These individuals are offered access to the market through forex brokers or the banks.  The new electronic method of forex trading has made it easy for anyone who owns a computer with an internet connection to enter this trading market.  Brokers and dealers are the actual retail traders as individuals have to trade through their brokers.  This massive range of traders is what makes the market volatile.

Dealers often go by the term market makers as they prepare the market for individual traders.  They quote traders prices that they are prepared to buy and sell currencies at and make their money on the difference between these two rates.

Brokers trade on behalf of forex traders.  They search for the best rates and secure it for their clients.  Some brokers earn their fee by adding on a commission to the prices they have secured for the client.

Trading Investors

Investment firms enter the market to buy foreign securities on their clients’ behalf.  The large investment portfolios that are controlled by them involve purchasing various profit-bearing instruments for their clients.

There are several players in the forex Singapore market.  You have to be aware of all these players and know how their acts affect your trading.



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