Forex Functions as a Financial Pyramid

by Richard U. Olson

Consumers worldwide are investing in Forex trading with highly profitable results. The key to success in playing this card is the ability to trade easily among foreign currencies and in understanding the hierarchy of the Forex market.

Incredibly, $3 trillion dollars are invested daily in the Forex market. Forex trading differs from the stock market in that investors must bid on scale and there are greater differences in the lower investment rankings. Anyone from multi-national financial conglomerates to the layman can bid and profit within Forex but naturally the highest financial rankings belong to the superpowers.

Envision Forex trading as a financial pyramid. At its tip are the major financial conglomerates, such as international banks and the like. They have the largest influence on the global trading market. The second highest level of our pyramid is occupied by smaller financial institutions that only trade in small amounts and offer little influence on real investment rates. Central banks stack up just below the latter.

These banks concern themselves with manipulating real cash flow and controlling price inflation and other related measures. These central banks make use of foreign exchange as reserve funds. The hedge funds follow the central banks in this hierarchy and subsequently succeeded by the investment management funds. These operate at the level of mutual funds in the stock market.

Next in line are retail brokers. They offer only indirect participation in Forex and they are followed by independent traders.

Since international trading can be quite alarming for many, smart Forex auto-trading software can alleviate many concerns. Forex auto-trading devices vary in price and design. Although there is an initial investment, Forex auto-trading offers peace of mind for the individual investor.

In Forex trading it requires the ability to multi-task by following market trends while simultaneously maintaining continual market surveillance. Greater security and continual, 24-hour access make online trading especially appealing.

Taking it a step further, it is possible to conduct financial trading on a mobile phone, a revolution in the financial market.

Current technology enhances trading options particularly when done via Forex auto-trading. Global trading through a laptop computer via internet connection is all that is needed for ongoing financial investing.