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Types of Forex Traders

Foreign Investments Companies

Foreign investment companies are basically the investment organizations which are carrying out foreign currency trading operations in the market. These companies show great requirements for a particular foreign currency. For example, if we talk about foreign investment companies like importers of certain products, that these firms would like to buy in bulk, a particular foreign currency for trading and business purposes.

Same is the case with other investment firms like exporters of certain products, who would like to sell a particular type of currency more. These firms do not have a direct admission to Forex market. They operate their conversion and depository processes via commercial banks only.

Commercial Firms

Commercial Firms make for a sizable part of the Forex trading market and a significant part of the market gets its way from the economic activities of such firms which are looking for foreign currency to pay for all the goods and services they employ.

As compared to the big financial companies and huge banks, these commercial firms often trade a rather small amount of money, and their trading mostly has a slight temporary effect on the overall market rates.
Trade flows, in terms of internationally big companies, becomes a central issue in the lasting direction of a currency's Forex rate. Some of these global giants are also capable of having an impulsive impact on the market rates, especially when very large positions are filled, of which, not many retail or individual traders are aware.

Commercial banks

In the world of Foreign exchange market, the maximum control is in the hands of huge multinational banks and organizations. This is because of the fact that their everyday degree of actions of trading and market cross over billions of dollars.

With such a huge figure in their hands, it would not be wrong to say that these commercial banks use up an indispensable amount of exchange transactions. The banks can be said to gather through all their clients, the growing and collective wants of the market for currency exchange. Also, in addition to agreement of clients’ purposes, the banks can sometimes trade for their own operations for their own means too.

Some of the well known international banks which are successfully involved with Foreign Exchange are Chase Manhattan Bank, Deutsche Bank, Citibank, Standard Chartered Bank and Barclays Bank to name a few. Their huge quantities of transactions can lead to noteworthy alterations in the currency rates. Mostly these big commercial banks are divided into Bulls and Bears.


Bulls are those Forex market members who are concerned with the escalating of currency rates.


Bears are those Forex market members who are concerned with the depression of the currency rates.

By and large, the market is in a position where balance can be maintained between bulls and bears.

Asset Management Companies

Asset Management companies are the ones which basically handle big money accounts on behalf of their clients, like pension funds etc. Such companies employ Foreign currency market to assist dealings in foreign investments.
While such companies are into Forex market and trading currencies, they take these transactions as secondary to their real investment business, and hence, are not intended for revenue-maximization.

According to the BIS study of Triennial Central Bank Survey, year 2004, 14% were between a dealer and a non-financial company, 33% concerned a dealer (ie a bank) and a finance manager and a major 53% of transactions were totally interbank.


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