.jpg)
.jpg)
.jpg)
What is the forex exchange market (FOREX)
The foreign exchange market is its global decentralized market for the trading of currencies. The main participants in this market are the larger international banks. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, except on weekends. The foreign exchange market works through financial institutions, and it operates on several levels. Behind the scene, banks turn to a smaller number of financial firms known as dealers who are actively involved in large quantities of foreign exchange trading.
Most foreign exchange dealers are banks, so the behind the scene market is sometimes called the 'interbank market', although a few insurance companies and other kinds of financial firms are involved. Trade between foreign exchange dealers can be very large, involving hundreds of millions of dollars and pounds. Because of the sovereignty issue when involving two currencies, forex has little (if any) supervisory entity regulating its action.
The foreign exchange market assists international trade and investment by enabling currency conversion. For example, it permits a business in the United States to import goods from the European Union member states, especially Eurozone members, and pay euros, even though its income is in United States dollars. It also supports direct speculation in the value of currencies, and the carry trade, speculation based on the interest rate differential between two currencies.
Foreign exchange marketing is unique because of the following characteristics
- The huge trading volume represents the largest asset class in the world leading to a liquidity
- Its geographical dispersion
- It's continuous operation; that is 24 hours a day except for weekend
- The variety of factors that affect the exchange rate
- The new Margin of relative profit and loss margins and concerning account size
An Overview of Forex Markets
The FX market is where currencies are traded. It is the only truly continuous and nonstop trading market in the world. In the past, the forex market was dominated by institutional firms and large banks, which acted on behalf of clients. But it has become more retail-oriented in recent years, and traders and investors of many holding sizes have begun participating in it.
An interesting aspect of world forex markets is that there are no physical buildings that function as trading venues for the markets. Instead, it is a series of connections made through trading terminals and computer networks. Participants in this market are institutions, investment banks, commercial banks, and retail investors.
The foreign exchange market is considered more opaque than other financial markets. Currencies are traded in OTC markets, where disclosures are not mandatory. Large liquidity pools from institutional firms are a prevalent feature of the market. One would presume that a country’s economic parameters should be the most important criterion to determine its price. But that’s not the case. A 2019 survey found that the motives of large financial institutions played the most important role in determining currency prices.
Sharing = earning
1,000,000 views = € 1,000
100,000 views = € 100
10,000 views = € 10
1,000 views = € 1
500 views = € 0.50
250 views = € 0.25
100 views = € 0.10
50 views = € 0.05
25 views = € 0.025
10 views = € 0.01
And much more
- Comments (3)
- Recommended
- Milestones
Here are your recommended items...
Here are your milestones...
The Forex market operates 24 hours a day, 5 days a week, trading in different time zones around the world. The market is decentralized, i.e. there is no central exchange or physical location where trading takes place. Instead, transactions take place electronically via computer networks between buyers and sellers in different parts of the world thanks to brokers, which you can read more about.
Overall, the forex currency market plays an important role in global trade and investment by allowing individuals and businesses to access and exchange different currencies for different purposes.