Forex - global
currency market or currency market or FX, is the market where one currency is traded for another.It is one of the largest market in the world.
Some participants in this market only seek foreign currency exchange rates and their own currencies, for example, international corporations must pay salaries and other expenses in different countries where they sell their products.
However, most of the market consists of traders (traders) currency speculating on the movements of exchange rates, as others do about the movements of stock prices. Currency traders try to take advantage of even the smallest fluctuations in exchange rates.
In the foreign exchange market there is little or no absolutely no "inside information". Fluctuations in exchange rates are usually caused by actual monetary flows and anticipations of global macroeconomic conditions.
When relevant news disclosed, at least in theory, every person in the world receives the same news at the same time.
Currencies are traded against each other. Each pair of currencies constitutes an individual product and is traditionally noted XXX / YYY, where YYY is an international code ISO 4217 three-letter currency in which the price of one unit of XXX currency is expressed. For example, EUR / USD is the price of the euro expressed in US dollars and 1 euro = 1.2045 dollar.
Unlike the stock market and futures, Forex is indeed the interbank market and Over The Counter (OTC), which means that there is no single universal exchange for specific currency pairs. The foreign exchange market operates 24 hours a day all days between individuals and brokers, brokers and banks, and other banks. If the European session ends, Asian session or US. UU. will start, so all world currencies can be constantly changing. Traders can react to news when they are released without waiting for the markets are open, as is the case with most other markets.
The average daily volume of international trade in currencies was 5.3 trillion dollars according to a study by the BIS in April 2013.
As in any other market, Forex is a spread of demand / supply (difference between buying and selling). In major currency crosses, the difference between the price at which the market will sell ( "offer" or "ask") to the trader, and the price, which the same broker will buy ( "demand" or "bid" ) of the same trader, it is minimal. Usually, it is only 1 or 2 pips. The price of EUR / USD 1.4238 a pip is "8" in the end. So the price of the demand / supply EUR / USD may be 1.4238 / 1.4239.
The brokers give their clients huge amounts of margin, thereby make it easy for customers to spend more money on the spread of supply / demand. The brokers are not regulated by the securities exchange commissions, because they do not sell securities. For the same reason they should not limit the leverage they offer to their clients. In addition, Forex brokers collect and pay the daily interest rate currency multiplied by the leverage.
Individual forex traders can make trades during the day and night, taking advantage of the trading session of 24 hours.
If you want to know more about start trading in Forex, please proceed to our Forex article for beginners.