What is Forex?(short for English foreign exchange)
April 6th, 2010
The Forex market or foreign exchange currency market is a wide world. It is decentralized and accessible to all: when a tourist in Tokyo buys dollars with yen, it performs a transaction on the forex market - just as when a multinational converts million pounds sterling. This makes it the largest market in the world, made volatile by the large volume of transactions, it is also always open, except on weekends.
Many clients are seeking only forex trading foreign currency against theirs, as companies needing to pay salaries beyond where they sell. But a large part consists of currency dealers who speculate on movements in exchange rates - in the manner of those who are on the evolution of stock prices .
Exchange
Many clients are seeking only forex trading foreign currency against theirs, as companies needing to pay salaries beyond where they sell. But a large part consists of currency dealers who speculate on movements in exchange rates - in the manner of those who are on the evolution of stock prices .
Exchange
rates fluctuate due to macroeconomic developments and events and expectations that traders have, in addition to actual cash flows. This market attracts private investors because its volatility provides many opportunities for profit (and loss, of course), while allowing the use of hedging instruments well known. Another of its advantages is that the Forex broker allows the use of leverage by their investors while requiring low margins.
On the forex market, currencies traded against each other by "pairs", which represent the relative value of a currency unit, the "base" against another currency, the "cons". They are usually written by juxtaposing the three-letter codes international currencies, starting with the base, for example, EUR / USD is the ratio of the euro against the U.S. dollar.
Like all markets, there is a difference between the purchase price and selling on forex, called gap between demand and supply. It is measured in "pips," the smallest difference in price a given exchange rate can offer - and usually equal to 1 / 100 of a percent. For major currencies, the difference between the price at which a market participant will buy ("Application") to a client and one he will sell ("Offer") is often between one and three pips.
The market is divided into three access levels: at the top is the interbank market, including the largest banks and securities dealers, who generally perceive sharp differences. The smaller banks and large multinationals come after, followed by pension funds and asset managers. Traders, which banned the march, participate indirectly through brokers or banks, and constitute a part of growing market through the facilities offered by the Internet.
On the forex market, currencies traded against each other by "pairs", which represent the relative value of a currency unit, the "base" against another currency, the "cons". They are usually written by juxtaposing the three-letter codes international currencies, starting with the base, for example, EUR / USD is the ratio of the euro against the U.S. dollar.
Like all markets, there is a difference between the purchase price and selling on forex, called gap between demand and supply. It is measured in "pips," the smallest difference in price a given exchange rate can offer - and usually equal to 1 / 100 of a percent. For major currencies, the difference between the price at which a market participant will buy ("Application") to a client and one he will sell ("Offer") is often between one and three pips.
The market is divided into three access levels: at the top is the interbank market, including the largest banks and securities dealers, who generally perceive sharp differences. The smaller banks and large multinationals come after, followed by pension funds and asset managers. Traders, which banned the march, participate indirectly through brokers or banks, and constitute a part of growing market through the facilities offered by the Internet.
Tags: foreign exchange currency, forex market, forex trading, The FOREX market
