Forex is the largest financial market in the world, in which transactions of up to 4 billion US dollars a day are made. This tremendous volume exceeds the combined volumes of major stock markets in the world on any given day. This trade volume creates a very liquid market in which it is desirable to participate.
Unlike many other markets, Forex is a decentralized bag with no central location where transactions are settled. It mainly operates through banks, brokers, stock brokers, financial institutions and individuals worldwide.
And as these financial centers are located in different time zones, Forex is available to trade 24 hours a day.
Transactions are executed via the Internet using trading platforms.
The development of platforms personal transactions and reduced transaction costs have led to a surge of retail investors.
With the advent of Internet and increasing competition, it is within easy reach of most investors now.
Like other investment alternatives, foreign exchange offers brokers / investors a market where they can buy or sell a specific currency pair.
The currency pair may be the euro against the US dollar, the US dollar against the Japanese yen, the British pound against the US dollar, the euro against the British pound or a series of different combinations of currencies.
For brokers and active traders, the forex market should not be different from other investment products such as securities, commodities or bonds. Given the globalization of the economic world and consolidation of whole economic regions (ie, the European Union), including currencies in a portfolio helps to diversify assets and can reduce risk.