The brokers on the interbank money market account for very all of Foreign exchange trading. This historicallyin the past mentioned 'interbank money market' is open0 hours, days a week - opening in Australia & closing in the Unites States. As it is open continually throughout the day it is not surprising that the Foreign exchange market is about 32 times larger than every other equities market combined.
Advantages of Trading Forex:
The Forex market offers many advantages that other markets can not replicate – Bid/Ask spread rates, Leverage to maximise profit margins, Market volatility, The world's biggest liquidised market and Continuous Operations – 24 hours 5 days a week.
Who is participating in foreign exchange market trades?
Commercial companies are also trading more often in the foreign exchange markets. The commercial companies such as Deutsche bank, UBS, Citigroup, & others such as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, & still others such as Goldman Sachs, ABN Amro, Morgan Stanley, & so on are actively trading in the foreign exchange markets to increase wealth of stock holders. Lots of smaller companies may not be involved in the foreign exchange markets as extensively as some large companies are but the choices are stil there.
From the studies over the years, most trades in the foreign exchange market are done between banks & this is called interbank. Banks make up about 50 percent of the trading in the foreign exchange market. So, if banks are widely using this method to make funds for stockholders & for their own bettering of business, you know the funds must be there for the smaller investor, the fund mangers to make use of to increase the amount of interest paid to accounts. Banks trade funds every day to increase the amount of funds they hold. Overnight a bank will invest millions in foreign exchange markets, & then the next day make that funds obtainable to the public in their savings, checking accounts & etc.
Central banks are the banks that hold international roles in the foreign markets. The supply of funds, the availability of funds, & the rates of interest are controlled by central banks. Central banks play a large role in the foreign exchange trading, & can be present in Tokyo, New York & in London. These are not the only central locations for foreign exchange trading but these are among the largest involved in this market strategy. Sometimes banks, commercial investors & the central banks will have large losses, & this in turn is passed on to investors. Other times, the investors & banks will have immense gains.