What is forex market?
Forex market is an intangible market in which forex traders are able to buy, sell, exchange and speculate currencies. Forex market is made up of banks, commercial companies, forex brokers, hedge funds and investors. Forex market is considered to be the largest financial market in the world with trillions of dollars’ turnover each day.
The function of forex market
Forex market allows forex exchange, for example, forex traders can exchangeUSD for EUR in forex market according to the exchange rate. An import company may need to trade forex in order to pay for services or goods from other countries and an export company may need to exchange forex for their native currency. However, 5% of forex trading volume is from international trade and 95% is fromforex speculation. Thus, forex speculation accouts for a much larger part in forex market. In total, forex market is a transparent and fair market where forex traders are able to trade forex of different countries.
What are traded in forex market?
Forex trading is always done in pairs – Currency Pairs, one currency is bought and the other is simultaneously sold in forex market; for example, forex traders can exchange Euros for US dollars. If the Euro really rises in value, they can sell the position and get profits from forex market. So currency pairs are traded in forex market. There are three types of currency pairs: majors, crosses and exotics. “The Majors” include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar, which are the most liquid currency and more than 85% of forex trading is traded with major currency pairs.
What are the most attractive advantages of forex market?
- Forex market opens for 24 hours worldwide.
- Forex market is a highly liquid market; the trading volume is 4 trillion dollars on a daily basis.
- High leverage allowed in forex market makes it possible for forex traders to get huge profit.
- Ability to get profit from a bull’s or a bear’s market.
- Forex market is a huge and global market, making manipulation impossible.
0 comments:
Post a Comment