There are four basic types of traders in FX trading: bankers, brokers, customers and central banks. As for bankers, banks and other financial institutions, they do the lion’s share of trading. Buying and selling currency to each other, they make benefits. And just about two-thirds of all Forex transactions involve banks dealing directly with each other.
 Sometimes brokers or dealers act as intermediaries between the banks. In this way they help them or other traders to looking for a good deal to find out where they can get the best currency trade. Trading through intermediaries, buyers and sellers can trade incognito. That's why, they like working through brokers or dealers. By charging a commission for the transactions they arrange, brokers make benefits on currency exchanges.
Customers, which mainly are major companies, trade currency so they can operate globally or invest worldwide. While others conduct their currency trading through brokers or banks, companies that trade currencies regularly have their own trading desks.
Acting on behalf of their governments, central banks sometimes participate in the Forex market. This is for impact on the value of the currencies of their respective countries. Thus, if such bank believes the dollar is weak, it may buy dollars. Moreover, it can encourage central banks of other countries to do the same in the Forex market to increase the value of the dollar.
Business cycles, political developments, changes in tax laws and stock market news are factors that influence on the value of nation’s currency. As traders must monitor all these potential factors, they can stay on top of political or economic changes that impact the value of the currencies they hold.
The necessary economic principle of supply and demand influences on currency trading. A large amount of one type of currency can be available for sale, of course. In this case, the market can be flooded with it and the price of that currency drops. The value of that currency rises when the supply of currency is law and the demand for it is high.
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