The Fact Is That The FOREX Market Never Stops

Category: Finance, Currency Trading.

FOREX, also known as the FX market or the foreign exchange market, is largest and oldest financial market in the world.

There has been some sort of foreign exchange for as long as people have needed to exchange currencies to do business. It is also the biggest and most liquid market in the world, a market that runs 24/ 5, circling the globe with financial transactions. Technically, if you are a tourist travelling in a foreign country and you use a traveler` s check to pay for a transaction, you are engaging in foreign exchange. They are concerned with trading foreign exchange, which occurs when one currency is traded for another on the market purely to make a profit. However, traders are not interested in that type of foreign exchange. In the past, foreign exchange trading was limited to banks, major currency dealers and occasionally to very large speculators.

However, recent technological advancements and the development of various online trading platforms have made it possible for small traders to take advantage of the many benefits of FOREX trading. Only these groups were able to take advantage of the currency market` s fantastic liquidity and the strong trending nature of many of the world` s primary currency exchange rates. Foreign exchange market brokers are now able to break down the larger sized inter- bank units and offer individual traders the opportunity to buy or sell any number of these smaller units. Transactions on the FOREX market are performed continuously by dealers at major banks or at FOREX brokerage companies around the world. These brokers give any size trader, including individual speculators or smaller companies, the option to trade at the same rates and price movements as the big players who once dominated the market. FOREX is a part of a worldwide market, and it is active 24 hours a day. Traders may place orders with brokers for overnight execution, without waiting for the opening of any market.

Dealers at major institutions work 24/ 5 in three different shifts. Because of this continuous activity, price movements on the FOREX market are very smooth, without the gaps that occur on the stock market. The fact is that the FOREX market never stops. The daily turnover on the FOREX market is somewhere around$ 2 trillion, so there is never any danger of an investor being unable to enter and exit positions whenever they want to. Even on September 11, you could still, 2001 get your hands on two- side quotes on currencies. About 85% of all daily transactions involve trading of the major currencies.

These currencies are on a floating exchange rate, and they are always traded in pairs such as Euro/ Dollar, or Dollar/ Yen. Four major currency pairs are usually used for investment purposes. They appear on the market in this form: EUR/ USD, USD/ JPY, GBP/ USD, and USD/ CHF. They are: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc. As a note, you should know that no dividends are paid on currencies. If everything goes as you expect, you later sell back the currency you bought( buying the currency you sold in the beginning) for a profit.

If you feel one of the currencies in the pair you are trading in is undervalued, you can buy more of that currency( by selling the other) . Trading on FOREX utilizes margin in such a way that an individual trader is able to profit well from trades such as these. When you compare them, you will see that the currency futures market is only one per cent as big as FOREX. The market is one where high profits are accessible to all types of traders, and the market is also big enough to ensure that there will almost always be a good trading opportunity. In addition, currency trading is not centered on an exchange, unlike the futures and stock markets. S. to Australia and New Zealand, to the Far East, to Europe and finally back to the U. Trading moves from major banking centers of the U.

S. it is truly a full circle trading game. Being successful at it can be intimidating and difficult when you are new to the game. As you can see, the foreign exchange market has come a long way. However, once you understand the market, you will be able to realize your potential to be a highly profitable trader.

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