What Is Forex ?
Forex (Foreign Exchange market) is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating ones. This is a set of transactions among FX market agents involving exchange of specified sums of money in a currency unit of any given nation for currency of another nation at an agreed rate as of any specified date. During exchange, the exchange rate of one currency to another currency is determined simply: by supply and demand – exchange to which both parties agree.
The scope of transactions in the global currency market is constantly growing, which is due to development of international trade and abolition of currency restrictions in many nations.
With the highest rates of information technology development in the last two decades, the market itself changed beyond recognition. FX transactions that used to be the privilege of the biggest monopolist banks not so long ago are now publicly accessible thanks to e-commerce systems.
The key advantage of a FX market is that one can succeed there just by the strength of one’s intelligence .
Another essential feature of the FX market , no matter how strange it might seem,is its stability. Everybody knows that sudden falls are very typical of the financial market. However, unlike the stock market, the FX market never falls. If shares devalue it means a collapse. But if the dollar slumps, that only means that another currency gets stronger. For instance, the yen strengthened by a quarter against the dollar late in 1998. On some days dollar fell by dozens percentage points. However, the market did not collapse anywhere; trading continued in the usual manner. It is here that the market and the related business stability lie - currency is an absolutely liquid commodity and will be always traded in.
The scope of transactions in the global currency market is constantly growing, which is due to development of international trade and abolition of currency restrictions in many nations.
With the highest rates of information technology development in the last two decades, the market itself changed beyond recognition. FX transactions that used to be the privilege of the biggest monopolist banks not so long ago are now publicly accessible thanks to e-commerce systems.
The key advantage of a FX market is that one can succeed there just by the strength of one’s intelligence .
Another essential feature of the FX market , no matter how strange it might seem,is its stability. Everybody knows that sudden falls are very typical of the financial market. However, unlike the stock market, the FX market never falls. If shares devalue it means a collapse. But if the dollar slumps, that only means that another currency gets stronger. For instance, the yen strengthened by a quarter against the dollar late in 1998. On some days dollar fell by dozens percentage points. However, the market did not collapse anywhere; trading continued in the usual manner. It is here that the market and the related business stability lie - currency is an absolutely liquid commodity and will be always traded in.
