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  • Beginner
  • Intermediate
  • Advanced
  • Completion
  1. Beginner
    Early Stages for Beginners
    8 Topics
  2. Forex Terminology
    11 Topics
  3. Margin & Leverage
    2 Topics
  4. Personal Psychology Questions
    2 Topics
  5. Psychology for Beginners
    7 Topics
  6. Intermediate
    Identifying Scams
    2 Topics
  7. Brokers for Beginners
    5 Topics
  8. Technical Analysis
    13 Topics
  9. Market Structure
    5 Topics
  10. Completion
    Risk Management for Beginners
    8 Topics
  11. Fundamental Analysis
    9 Topics
  12. Advanced
    Using Indicators
    6 Topics
  13. Technical Analysis (Part 2)
    8 Topics

Can Anyone Trade Forex? Who Trades Forex? Millennials? Generation Z?

In a short answer, yes. Anyone over the age of 18 can legally trade in the Forex Market, as long as you have Wi-Fi. That wasn’t the case 50 years ago. It was only exclusive to large financial institutions and to put it nicely…. rich people and rich corporations.

The internet changed all of that! Anyone can contact a broker, open up an account, and start trading directly from their mobile phone or laptop. That doesn’t mean everyone should.😅 Day trading is not as easy as everyone makes it look, but it really is SIMPLE.

Although young adults glamorized and popularized Forex on social media with their lavish lifestyles and fancy cars, as I said above, they only make up about 5% of the market, and the majority of them are not profitable. The real players of the markets are: Banks and Corporations. They make up the majority of the 6 trillion day trading volume per day.

Major Banks and Central Banks:

They control almost EVERYTHING. They determine the exchange rates that we trade off of, inflation speed, purchasing power of a currency, and more.

There is a difference between major banks & central banks. Major banks are names such as: Bank of America, Barclays, Goldman Sachs, Citi, and more.

These major banks help aid transactions for their customers while also trading theirselves.

Central banks are a country’s governmental bank that handle inflation speed, interest rates, and even valuing/devaluing their own currency’s purchasing power. For example: The United States has the Federal Reserve. The United Kingdom has the Bank of England, and Japan has the Bank of Japan.

All in all, they make up the majority of Forex transactions. While major banks deal with handling Forex transactions for their customers and theirselves, central banks deal with stabilizing currency prices and ensuring financial imbalances don’t occur by increasing their competitiveness of that country’s economy against others.

Corporations:

Businesses also make up a large portion of Forex transactions because almost all businesses do business overseas! Remember that example we discussed early on about traveling to another country and exchanging your United States Dollars for Great Britain Pounds? That same concept applies while doing business.

If a business is importing materials from overseas or exporting their materials to another country, they have to convert their currency into the currency of the country they’re doing business with. Clothing companies manufacturing clothes from China have to convert their US Dollars to Chinese Yuan to buy what they need to buy before exchanging it back.

Because of this, businesses will pay attention to the exchange rates between their country and the countries they’re doing business with so they can keep their costs down. If you’re used to paying a certain amount of money for a certain amount of products, and the value of the currency in that particular country appreciates, you now have to pay MORE for those same amount of products than you’re used to due to the new exchange rate. Transactions like these all play a part in the overall number of Forex transactions made per day.

Hedge Funds:

Most firms use Forex to protect their investments when dealing with foreign transactions. They will “hedge” the trade (take the opposite side of a trade/opposite side of what they’re doing business on) so that their money is ALWAYS protected in case the market suddenly goes haywire. This is to reduce the risk of conducting business overseas. Because hedging means you’re in the same position (buying/selling but in a different way), the goal is not to make an exuberant amount of money. Firms CAN make a lot of money by cutting their losses short while maintaining the position that is profitable (business/trading wise), but the main goal with hedge funds is to reduce risk when conducting transactions overseas, and hedging does exactly that.

US/Retail Traders:

Retail traders are individual traders who are trying to make personal gains on their individual trading account. This includes people not connected to a firm, a fund, or anything else. They simply trade on their own account, in their own personal lives.

These are all of the Forex players who make up the entirety of the Forex transactions! I know… reading all of this was A LOT. I promise it gets more interesting as time goes on! It’s very hard to call yourself a Forex trader or say you’re learning Forex when you don’t even know who controls the market. Everything you’re reading now is beneficial in helping you understand what the Forex Market exactly is.