 Forex
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Overview
The word FOREX is derived from Foreign
Exchange and is the largest
financial market in the world. Unlike many other markets the FX
market is open 24 hours per day (not weekends) and has an estimated
$1.2 Trillion daily turnover. This remarkable turnover is more than
the combined turnover of all the worlds' stock markets on any given
day. This tends to lead to a very liquid market and thus a desirable
market to trade. Many people turn to Forex to trade huge currency portfolios.
The foreign exchange market differs from stock markets or futures
markets in that there is no physical location or central exchange
where trading takes place. It is primarily traded through banks,
brokers, dealers, financial institutions and private individuals.
Trades are executed through phone and increasingly through the
Internet. It is only in the last few years that the smaller investor
has been able to gain access to this market through retail-level
currency brokers and online trading platforms. Previously the large
amounts of deposits required precluded the smaller investors. With
the advent of the Internet and growing competition it is now easily
in the reach of most investors. There are even mini-Forex instruments
offered by certain brokerages which are 10 times less in size than
the full contract.
Over 90% of all currencies are traded against the US Dollar. The four
next most traded currencies are the Euro (EUR), Japanese Yen (JPY),
Pound Sterling (GBP) and Swiss Franc(CHF). As currencies are traded
in pairs and exchanged one for the other when traded, the rate at
which they are exchanged is called the exchange rate. These
four currencies traded against the US Dollar make up the majority of
the market and are called major currencies or the majors.
Maddock Data International provides the majors and the minors. Please
peruse the knowledge base for
further understanding of Forex trading. |
