What Is FOREX or FOREX MARKET? PART I
The exchange market (also mentioned because the Forex or FX market) is that the largest financial market within the world, with over $1.5 trillion changing hands a day .
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That is larger than all US equity and Treasury markets combined!
Unlike other financial markets that operate at a centralized location (i.e. stock exchange), the worldwide Forex market has no central location. it's a worldwide network of banks, financial ...
What Is FOREX or FOREX MARKET? PART I
The exchange market (also mentioned because the Forex or FX market) is that the largest financial market within the world, with over $1.5 trillion changing hands a day .
That is larger than all US equity and Treasury markets combined!
Unlike other financial markets that operate at a centralized location (i.e. stock exchange), the worldwide Forex market has no central location. it's a worldwide network of banks, financial institutions and individual traders, all involved within the buying and selling of national currencies. Another major feature of the Forex market is that it operates 24 hours each day , like the opening and shutting of monetary centers in countries all across the planet , starting every day in Sydney, then Tokyo, London and ny . At any time, in any location, there are buyers and sellers, making the Forex market the foremost liquid market within the world.
Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. With advances in technology over the years, however, the Forex market is now available to everybody, from banks to money managers to individual traders trading retail accounts. The time to urge involved during this exciting, global market has never been better than now. Open an account and become a lively player within the largest market on the earth .
The Forex Market is extremely different than trading currencies on the futures exchange , and tons easier, than trading stocks or commodities.
Whether you're conscious of it or not, you already play a task within the Forex market. the straightforward incontrovertible fact that you've got money in your pocket causes you to an investor in currency, particularly within the US Dollar. By holding US Dollars, you've got elected to not hold the currencies of other nations. Your purchases of stocks, bonds or other investments, along side money deposited in your checking account , represent investments that rely heavily on the integrity of the worth of their denominated currency ¨the US Dollar. thanks to the changing value of the US Dollar and therefore the resulting fluctuations in exchange rates, your investments may change in value, affecting your overall financial status. With this in mind, it should be no surprise that a lot of investors have taken advantage of the fluctuation in Exchange Rates, using the volatility of the exchange market as how to extend their capital.
Example: suppose you had $1000 and purchased Euros when the rate of exchange was 1.50 Euros to the dollar. you'd then have 1500 Euros. If the worth of Euros against the US dollar increased then you'd sell (exchange) your Euros for dollars and have more dollars than you started with.
Example:
You might see the following:
EUR/USD last trade 1.5000 means
One Euro is worth $1.50 US dollars.
The first currency (in this instance , the EURO) is mentioned because the base currency and therefore the second (/USD) because the counter or quote currency.
The FOREX plays an important role within the world economy and there'll always be an incredible need for the exchange of currencies. International trade increases as technology and communication increases. As long as there's international trade, there'll be a FOREX market. The FX market has got to exist so a rustic like Germany can sell products within the us and be ready to receive Euros in exchange for US Dollar.
RISK WARNING:
Risks of currency trading
Margined currency trading is a particularly risky sort of investment and is merely suitable for people and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity).The funds in an account that's trading at maximum leverage could also be completely lost if the position(s) held within the account experiences even a 1 percent swing in value. Given the likelihood of losing one's entire investment, speculation within the exchange market should only be conducted with venture capital funds that, if lost, won't significantly affect the investors financial well-being.