FOREX TRADING
Foreign exchange market is divided into levels of access. Inter-bank market stands at the top, which has spreads, within it, when there is a smaller difference between the bid and the ask price, this is known as a better spread. Line is the amount of money with which they are trading, and the size of the line determines the levels of access which makes the foreign exchange market. Of all the transactions carried out, 53% of it accounts for the top-tier interbank market. After these inter-bank markets, which are at the top, stands the smaller banks, which are bellow them. Then, there are multi-national corporations, which follow these smaller banks. These corporations have to pay their employees indifferent countries and hedge risks. Then there are large hedge funds and even market makers who deal in retail foreign exchange or FX market makers. The companies and the investors who have played an important role in Forex Trading and in financial markets are; Pension funds, insurance companies, mutual funds, and many institutional investors. This was according to Galati and Melvin. In overall size and numbers Hedge funds have grown markedly in the period of 2001 to 2004. For the economic needs, Central banks also participate in foreign exchange markets.
