Forex market is the trade and settlement of foreign exchange transactions. Forex market is regulated by the CBA and as long as there is a significant portion of the international transactions in it, it is no secret that the banks dominate the market. They’re a unique segment of financial services which have been declining for several years now.
Nevertheless, the banks are still very much around, and they hold the largest share of the total market share of Forex, with a percentage of 20% and more. The third largest in the field is online brokers, which are active at 24% of the overall market share. But the main query is who controls the forex market. Let’s discuss it.
Table of Contents
No One Controls the Forex Market
Yes, it is true statement. No one controls the Forex market and this is an advantage because there is a genuine attempt to make sure that forex is traded as it should be; and at the end of the day, it’s all about the Forex. The number of Forex brokers are the same, the same agencies are supplying the same terms, there’s even a standard protocol for the trading, there’s a true attempt at ensuring that everyone has a fair deal.
For example, as one company will have a client trading on their system and they will notice that the client is spending more time doing the simple tasks and less time on complicated trading, they are actually helping their company save money on marketing and IT costs. However, sometimes these companies lack transparency and there are times they don’t even care.
However, there is a remedy. Make sure that you always check the broker’s status with their AML and KYC compliance, investigate to see if they are using third-party payment services, if so, examine the process of using those services, do you know how it’s implemented and do you know who is responsible for handling it?
If you don’t and you don’t like it, remember that some brokers aren’t listed and sometimes they may be caught on some shady activity and the company will disappear in the middle of the night and all the trades are closed. So, you need to check it and find out for yourself if they have the proper compliance. The forex brokers with zar accounts are the best; they have been reputable for years and have been doing a great job in the industry.
Forex Market is Decentralized
The Forex market is decentralized and this fact makes it very interesting. In fact, the forex market is a chain and we’re in a block chain era. The second reason why this fact makes it interesting is that it has no particular owner.The money changing transactions happen between users. The broker doesn’t own it; the broker operates the block chain and its own currency which has been developed by him.
Another interesting fact is that each user in the same Forex platform is a permanent individual. If you ever had any questions about forex market and you’ve always wondered why there is no exchange rate between different currencies, this is the reason. No one runs the exchange for the brokers.
Also, by default the brokers only buy and sell currencies and there is no trust in this. It is no Wonder that the prices of the forex market are so volatile. Nevertheless, the banks dominate the forex market because they have financial incentive. This is the reason why this is not a perfect system but nevertheless, it’s decentralized and a very interesting one.
It’s Based on Demand and Supply of Market
Although the interest is in forex trading, this isn’t your ordinary way of making a living, this is a career. It’s a huge responsibility, a lot of time and effort will be needed. So, the reward is huge. The amazing thing is that with a hundred forex brokers, no one can control the Forex market. You don’t need a conspiracy to control the market; it’s based on demand and supply.
With a few brokers, the broker can create a market. With a large number of brokers, only the few brokers can create a market. Therefore, the market is the result of demand and supply, it doesn’t need someone to invent the market. It’s simple but elegant, quite novel to see that the block chain can be used in a very effective way for one thing only, money exchange.
Moreover, this brings another point of interest. The transactions are real, more than ever, and the exchange is real. This makes it difficult for the manipulators to create a fake account with fake money. The system will automatically reject all fake money and when you have enough money, you will be able to buy or sell currency at a fair price and the price is a function of demand and supply and is based on the number of users.
Governments and Commercial Banks are the Major Players
In forex market, there are two major players, the commercial banks and the government. The government makes the regulation and policy and this is because they have a keen interest in the survival of their companies, i.e. the banks. The government also makes the rules for the exchange because they want to prevent insider trading and to have an efficient market.
The fact that the government makes the regulations and the rules of the forex market is no surprise, the government has seen first-hand how it affects the companies they regulate, i.e. the banks. This is because the banks are responsible for large scale development and production of things like cars, energy and infrastructure.
Final Verdict – Who Controls the Forex Market
Forex market is volatile and it is controlled by no one. This allows people to trade without any risks and still create more income, and it allows professionals to find a comfortable way to earn more money. It’s also beneficial for anyone who wants to create a financial empire, and this can be done with this kind of system.