The forex market is the single largest market around the world not just in terms of average daily turnover and average revenue per trader but also the largest market in terms of participants. As the saying goes, the more the merrier. Therefore it is no wonder why so much money can be made (or lost) in this one single market.

If you have always wondered who are the major players, here is the list:
Commercial Banks. Traditionally known as a savings and lending institution, banks are certainly one of the major players in forex market. Banks are usually involved in both large quantities of speculative trading and also daily commercial turnover.

The really big and well-established banks trade in the billions of dollars in foreign currencies everyday. Some of the trades are undertaken on behalf of their clients while most are through proprietary desks.

Central Banks. Central banks play an important role in the forex market and that role is controlling the supply of different currencies. They are also responsible for regulating inflation and interest rate.

Central banks are also responsible for stabilizing the forex market. They do this by balancing the country’s foreign exchange reserves. In addition, they also have official target rates for the currencies that they are handling. Because of this role, central banks are sometimes jokingly referred to as circus performers because of the daily balancing act that they have to perform.

Investment Firms. Investment management firms commonly manage huge accounts on behalf of their clients such as endowments and pension funds. Sometimes, these investments require the exchange of foreign currencies so they have to facilitate these transactions through the use of the foreign exchange market.

These situations exist because there are basically no limitations to the nationalities of customers that an investment firm can attract. Therefore, investment managers with an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Retail Forex Brokers. These can be individuals or groups of individuals. They handle a fraction of the total volume of the entire forex market, but do not let that fool you. A single retail forex broker estimates retail volume of between 25 to 50 billion dollars each day. Their volume is estimated to make up 2% of the total market volume.

Speculators. These are the individuals or private investors who purchase and sell foreign currencies and profit through fluctuations on their price. Speculators are a “hardy” bunch simply because they are more adept at handling and maybe even sidestepping risks that regular investors would prefer not to be involved with.

The foreign exchange market, also knows as FOREX, originated in 1973 has become the largest e-currency trade market in the world today. FOREX trading occurs 24 hours a day, 5 days a week. The FOREX market offers a unique trading opportunity to those seeking a substantial profit in a market that trades over 1.2 trillion dollars each day.

FOREX market is primarily traded between central banks, commercial banks, non-banking International Corporation, hedge funds, private investors and speculators. Previously small investors were unable to trade in the FOREX market due to the large deposit required. However until recent years, with the continuing growth of the internet and competition, Forex trading has made it so small investors can now open a FOREX trading account with as little as $250.

There are a few factors as to why FOREX investing is starting to attract more small investors. For one, FOREX can be traded 24 hours a day 5 days a week. Previously trades were placed by phone, the internet has made it possible for traders to monitor their FOREX trading accounts from home and execute trades in real time with the click of a mouse button.

In order to start trading in the FOREX market, one must first open an account with a broker. It is recommended to obtain a list of brokers and do some research before deciding on which broker to deal with. Each broker offers different policies and different spreads on each currency that is traded.

Before trading in FOREX, one must first understand the risk and reward behind

margin trading in FOREX. A margined account can be leveraged, which means trading in FOREX can be done with solely cash or a combination of cash and collateral such as a security deposit. The main risk involved in margin trading is that margin trading tends to inflate loss. In addition the rate of loss and leverage makes FOREX a high risk investment. However, regardless of the downside in margin trading, FOREX is still very profitable as huge gains can be made.

There are plenty of resources on the internet that will discuss trading strategies, emotions and what it takes to become a successful trader. Most of these web sites are going to tell you that emotions play the largest roll in your success as a trader.