Who are the Forex Traders? Who are the people who are taking part in the Forex market?
Central Banks
The Central Bank of a country is the institution that creates the currency of that country and provides its money supply. Eg The central bank of Singapore is the MAS (Monetary Authority of Singapore).
For the longest time, it was only the central banks who were trading Forex.
Commercial Banks
These are banks like DBS, OCBC, UOB. Commercial Banks trade Forex for only one reason. What do you think is that reason? Profit. Now here's a fact that might interest you. Commercial Banks are the ones who tell you "Do not trade Forex, it's very risky."
May I ask you, when you put $ 50,000 deposit, do you think it's sitting there? What do you think they are doing with your money?
Yes, they are using some of your money to trade in the Foreign Exchange market … Did you know that up to 60% of a bank's income comes from Forex? That's even more than your home mortgages and your car loans.
By the way, if you feel Forex is risky, I will break this myth when you come to my preview. Click here to find out more.
Big MNCs / Importers / Exporters
Let's take a big MNC for example – Nokia.
Nokia is based in Finland. When you buy a Nokia phone in Singapore, you do not pay in the Finnish currency, but in the Singapore Dollar. If you buy a Nokia phone in Malaysia, you pay in the Malaysia Ringgit.
Every year, when Nokia recalls back all their funds to close their financial year, they take part in the Forex market, because all these money has to be converted back to the Finnish currency. So as long as any importers or exporters or big MNCs that are all over the world, whenever they recall back and settle their financial records, they will take part in the Forex market.
Hedge Funds
A hedge fund is a private investment fund that is open to a limited number of investors. Hedge Funds that part in the Forex market for only one reason. Guess what is that reason? Wow, you are smart! Yes, it's PROFIT again.
Here's an interesting fact. In 1970, Jim Rogers set up a fund called the Quantum Fund, with the now billionaire and legendary investor George Soros. During its first ten years, the fund outperformed the S & P500 by 4600%. It made both of them multi-millionaires.
Jim Rogers is staying in Singapore today, and he has given two reasons why he chose Singapore.
First reason is Singapore is the 4th largest financial center in the world.
Second reason is Singapore is an Asian country that speaks Chinese.
That's because he foresees, as many would agree, that in the next 10 years, we will start to see the greatest wealth transfer in modern history from the West to Asia. And for you who are staying in Asia, now is your greatest chance to be part of it.
Travelers & Tourists
This, you probably already know. Whenever we go to another country, we have to exchange our local currency for their reasons because we have to spend in their local currency.
Individual Speculators – that's YOU!
The whole world is looking at this group of people, people like you and I. I call these people individual speculators or the educated investors. These are the people armed with only two things – a laptop and an internet connection, and they are making money from the Forex market from all over the world.
