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Forex Market

Who has not heard about the Forex market? Exchange beckons possibility of getting fast money, prestige and seeming ease money on changes in exchange rates. And most beginners do not even think about that trading - it is a profession that requires responsibility, endurance, perseverance and constant learning.

Let's talk about the Forex market.

Forex market - history

FOREX or FOREX (from the English. FOReign Exchange Market, literally - the foreign exchange market) allows each person to earn through online buying and selling currency. In general, it is trading, investment and speculative currency transactions. Realized thanks to the system of institutions: it is central, commercial and investment banks, brokers and dealers, pension and hedge funds, insurance companies and multinational corporations.

When in the 70s of last century, the Bretton Woods system of fixed exchange rates was replaced by a system of floating, it was a breakthrough. Restricted to the yellow metal is not, and therefore, central banks can generate national currency rate, which affects the economic situation in the country. Foreign exchange market has changed.

Today, the daily turnover of the stock exchange is 3-5 trillion. Trade is conducted around the clock. Certain trading marketplace absent, but the trader may at any time take a position by buying or selling the asset, using all advantages of high margin trade (shoulder may be 1:1000). And a third of them earned on best expert advisor mt4, and it does not limit

In recent years become increasingly popular option and futures currency transactions. It provides many new features to any participant of the Forex market - as a currency speculator and hedger. In other words, the exchange can be like getting a speculative profit (bought cheaper and sold better), and to protect the capital against currency risk (changes in the value of the asset).

Forex market - currency and functions

Most often, currency traders sell the U.S. dollar and euro (pair EUR/USD), slightly less than the Japanese yen (JPY) and British pound (GBP), more than the Swiss franc (CHF) and Australian dollar (AUD). Cross-rates, ie currency pairs, where there is no U.S. dollar as one of the parties to the transaction, also gaining popularity.

Modern features of the global currency markets, is as follows:
1. international nature of currency trading - no territorial borders for currency trading. Widely used electronic means of communication (the Internet).
2. currency transactions (transactions) are performed around the clock, with varying degrees of activity at different times of day (see "Sessions forex what time forex select").
3. operations are unified (standardized) and comfortable.
4. have the ability to hedge (protection of funds from credit and currency risks).
5. exchange rates are volatile, it is not always determined by fundamental economic factors.
6. a significant proportion of transactions accounted for speculative arbitrage and that at times exceeds commercial transactions. Of currency speculators are not only financial groups and banks, but also a large number of other participants (individuals and entities).

Functions of a modern foreign exchange market:
* Ensures timely Forex International Settlements.
* Creates opportunities for capital protection (hedging).
* Provides interconnection of world markets (credit, currency, financial).
* The market creates opportunities to diversify the country's foreign reserves, banks or businesses.
* Exchange rate adjustment is based on supply and demand.
* It is possible to implement monetary policy as part of the state's economic. Concerted action of several countries can also achieve the goals of macroeconomic policy under international agreements.
* Market participants can receive speculative profit performing arbitrage.

Forex market has its own terminology. Recommended reading the following articles:
"The concept of a market order"
"Who are the market makers Forex?"
"Spread Forex"
"Currency Swap (swap Forex)."
4 These articles will help you better understand the mechanisms of currency exchange and show profit opportunities in the Forex market.

Finally it is worth noting that for a lucrative trade in the foreign exchange market does not necessarily sit for hours in front of the monitor. Today it is possible to make a profit. Using automatic trading systems, investing in the account's transaction or copying of successful traders (service Share4you, InstaCopy, MirrorTrader).

Keep abreast and make money!

Go back What is Forex Exchange? / Next article Forecast rates on Forex

 
 

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