Forex trading is the trading of currencies of different countries with each other. Forex is an abbreviation of Foreign Exchange. For example, the currency circulating in Europe called Euro (EUR) and in the United States, currency in circulation is called the U.s. dollar (USD). An example of forex trading is to buy Euros, while simultaneously selling US dollars. This is called will be abbreviated as EUR/USD.
Meanwhile, the name of the Forex market is a nonstop cash market where currencies of Nations are traded, typically via brokers it. Foreign currencies are constantly and simultaneously bought and sold in local and global markets and then increase or decrease in experiencing ' value based on currency movements. Foreign exchange market conditions can change at any time in response to real-time events.
The Forex market is often also called the foreign exchange market, it is a huge market with a growing financial and liquid (deposit and can be cashed at any time) that operates 24 hours a day. This is not a market in the traditional sense since there is no trade center location. Most of the trading is done through through a network of electronic trading. The foreign exchange market allows companies, banks and other financial institutions to buy and sell foreign currency, in large numbers.
The main market for the currency market is the "interbank" where banks, large companies and large financial institutions manage the risks associated with fluctuations in currency exchange rates.
MAJOR CURRENCIES
The following are the major currencies traded in the market:
Us Dollar (USD)
Japan Yen (JPY)
Euro (EUR)
Canadian Dollar (CAD)
Australia Dollar (AUD)
Switzerland Francs (CHF)
British Pound (GBP)
MARKET PARTICIPANTS
Generally, the perpetrator of the forex Market are derived from a variety of classes including:
Customers
Banks and financial institutions
Broker
The Government of the
Business Person
Speculators
Customers, such as multinational corporations, participate in the forex market because they need foreign currencies for their trade in other countries. Like for example, a particular company based in the United Kingdom will need to use the Forex market to buy the currency they need to pay their partner companies in other countries that sell heavy equipment.
Banks and financial institutions, are the most active participants in the forex market. They deal with other financial institutions to ask their foreign exchange rate and they can buy the currency they need in the forex market. In addition to the central bank and the Government, one of the biggest offender in forex transactions are bank. Interbank market is a market where big bank 2 transaction between them and determine the price of the currency be like yg is seen by individual traders like us on a computer screen.
Banks, in General, act as dealers buy/sell currency at a price bid/ask him. One of the ways the banks got the money is to sell a currency with a higher price than he bought to the customers. Because the forex market is not centralized decentralized alias, then reasonable case see bank one with the other banks had a bit of a difference in the value of the exchange rate
A broker is a company with a software links computer or phone lines to banks around the world. This is the job of a broker to find out what banks have the highest level to buy currencies and banks that have the lowest level to sell the currency.
By using a broker makes it possible for banks to find the best deal available in the world. Forex brokerage firms, but this did not correlate with their own money but only charge a Commission for their services.
Government, is the most influential doer forex, along with the central bank. In many countries, the central bank is the length of the hand of the Government and its policies are run in tandem with the Government. However, some Governments find it increasingly independent. A central bank more effective in carrying out its work to improve the economy. Regardless of how indipendennya a representative of the central bank, the Government usually regularly consult representatives of the central banks to discuss monetary policy. So, the Government and the central bank are usually already one package in terms of monetary policy. The Central Bank often intervenes market certain economic objectives for the sake of his country.
Business person, is one of the biggest clients of these banks, those involved in international transactions. Good business is selling goods to the international clients or buying goods from suppliers internationally, they had to deal with the volatility of the currency fluctuation. The uncertainty is yg hated by management as well as business owners. Faced with the risk of foreign exchange is a major issue for multinational companies. Seba
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