The following is an excerpt from the coming "The Secret to Trading Forex, Futures, & ETFs: Risk Tolerance Threshold Theory" by Jay Norris with Teresa Bell

A Market's End Users

While the majority of market participants are speculators, the most important market players over time are going to be a market’s end users, because, at the end of the day, they have the most at stake. There is an old market adage that says “There are only three things that drive markets: fear, need, and greed”. And the “need” is that of the end users. An end user is someone who accumulates the product as an investment, or who buys the product to resell, or consume. When taken collectively end users are the most influential class of market participants. The collective action of 401K holders depositing funds on a twice a month basis into blue-chip stock indices demonstrates the collective power of everyday workers as end users. Similarly the pension funds of global companies and government agencies are end users of foreign government issued notes and bonds. The large grain companies that supply corn, wheat, and soybeans to food processors around the world are the end users of the grain markets, while the corner gas station is an end user in the energy markets. It is important that we recognize that for many markets there is a steady and nearly inexhaustible amount of buying on a regular basis. While market panics certainly occur from time to time, and normal market corrections are commonplace, there is a very good reason for the old market adage, “Pessimists don’t make money on Wall Street”. We live in a world where health standards continue to improve, birth rates continue to increase, and we are all living longer. Living standards around the globe have improved markedly and that trend is supported and encouraged by governments and business.

The Baby Boomers, and the technological revolution that followed, has changed the world forever in a good way. Economies and markets have gone from a boom /bust cycle pre-World War II, to a boom / correction cycle post-World War II. Any window of opportunity for short-sellers is opened quickly and closed steadily. And the steady buying of end users plays an important role in this market dynamic. It is important to understand who the end users are in a market, and how they operate, before you trade a market. You don’t want to be the person paying the carry charge at 50 to 1 – which is what happens if you are short a carry pair.