Who Trades in the Foreign Exchange Market

The Forex is made up of about 5,000 trading institutions such as international banks, central government banks (such as the US Federal Reserve), and commercial companies and brokers for all types of foreign currency. There is no dominate location for Forex trading; major trading centers are located in New York, Tokyo, London, Hong Kong, Singapore, Paris, and Frankfurt. All trading is done by telephone or either through the Internet. Businesses use the market to buy and sell their products in other countries, but most of the activity on the Forex is from currency traders who use it to generate profits from small movements in the market such as big investors as well as small investors like you and me.