The international currency market Forex is a system of regional foreign currency markets that cooperate with each other with the help of the newest informational technologies. The work of the international currency market is the sum total of different operations on purchase and sale of foreign currencies. The currency market is formed by two basic components: the market of stock trade and over the counter currency market, that is interbank in fact. The basic volume of the operations made on the Forex market is the share of the interbank currency market.
The Forex market is the youngest among the world financial markets and it develops very fast and dynamic. It is accepted to start its history from the 1973 when fixed rates were substituted for floating currency rates, that are formed under the influence of the demand and supply on the market. The market has been developing for 25 years and has become the largest and at the same time the most capacious market with the daily turnover that is more that one trillion of US dollars. This situation is made for that at the present time the Forex market services not only the foreign trade but the international movement of capitals too and it is also the arena for different speculative operations. The part of speculative operations in its common volume has grown much for the last ten years. There are several reasons of that. First of all, the trade on the Forex market is mad for 24 hours a day, and it ‘follows” the sun, i.e. the trade begins in the South-East Asia, then it moves to Europe and then to America. Secondly, the market is extremely liquid, it always has demand and supply. And the last, average fluctuations of basic currencies make 1-2% a day, that allows to successful traders to get very good income. The Forex market attracts more and more potential investors; it is taking the first place little by little and covers even the stock market.
Large banks are the main participants of the international currency market and they form currency rates in fact, but besides large banks there are other participants of the market: financial an broker companies, investment, pension and other funds. They are making the basic “weather” on the market. Furthermore, the part of central banks has grown for last time, their task is to make regulations on foreign markets: prevention of abrupt fluctuations of the rates of national currencies with the purpose of banning of economic crises, maintenance of trade and pay balances and so on. And at last, small and average investors work on the market, and their purpose is to get profit to the account of changes of the currency rates. The participation of small and average investors has become possible thanks to intermediary work of broker companies. In many countries small and average investors have access to the world currency market using sums beginning of 10 000 US dollars in their deals. Broker companies give to their clients a credit line or such called “credit shoulder” which is larger than the sum of the deposit for several times. The system of work through a broker company with the concession of a credit shoulder has got a name of “marginal trading”.
As in every other sphere of life Forex needs some knowledge.
Surely, you can start forex investment and get quite successful in it. However sooner or later the losses will come. This is when you might think “Why didn’t I start with a nice forex trading education?”
That does not mean that after reading even the top materials you will start closing trading positions with huge income, but this knowledge will save you from many traps. And even if you decide to get the assistance of a forex managed account service, still you will be able to make a much wiser decision.
And some general tips - today the web technologies give you a truly unique chance to choose what you want at the best terms which are available on the market. Funny, but most of the people don’t use this opportunity. In real practice it means that you must use all the tools of today to get the information that you need.
Search Google and other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real opportunity to make a smart and nicely balanced decision.
And also sign up to the RSS on this blog, because we will everything possible to keep this blog tuned up to the day with new publications about Forex market.
RSS FEED