What is forex? For most of us may not know much about the meaning of those words.Forex in General can be interpreted as a form of currency sale and purchase of onecountry against another country's currency. Of particular interest is the current forexhas become a very promising business field. For those of you who want to know more about forex, this article will provide commentary on the notion, function, as well asthe perpetrators of the forex world that hopefully can be an additional useful information for you.
Understanding Forex
Forex is basically a combination of the two words in the English language which is "foreign" and "exchange". Foreign can meaning "stranger" or "overseas" while theExchange can be meant as an "Exchange", in this case the question is currency exchange. And when combined, forex or foreign exchange can be analyzed as aforeign currency exchange activities.
In one of the Wikipedia page explains that the forex in English also known by several terms that is the foreign exchange or Forex market. Both terms have the same meaning, namely a trade activity involving two currencies of different countries as theobject of such trade. Deeper in the process of buying and selling the currency there are roles of major financial markets that exist around the world and lasts for 24 hours a day respectively.
In cycle all its global forex, or foreign exchange market will start from New Zealandand Australia State that occurred at about 05:00 – 2:00 pm EDT. The turnaround will then move towards the West to Asian markets that took place at 07.00 – 16.00, the next European markets 13.00 – 22.00 pm, and the last was the American market at9.30 – 10.30 pm. After the American market, the market will return to the rotation of the New Zealand and Australia, and so on.
The Function Of The Existence Of The Forex Market
In the process, forex has several main functions which are very influential to theculprit. Function of forex are divided into 3 namely as follows:
# 1. The first function is to ease the process of currency exchange. As we know, in thedaily economic activities surely humans sometimes need funds in the currencies of other countries. Whether it is used in business, travel, shopping or for storage.
Currency exchange can be done with a system called Clearing. Well one of the functions of the forex is providing the service. For simplicity, the example of suchservices is the services of foreign currency exchange that you normally find in various places, ranging from banks to counter money exchange in various places.
# 2. The second function is to hedge. Hedging in the language of Indonesia, also known by the term hedging. This is an action performed by a Forex trader as a "guarantee" to the value of the Fund's investments is not diminished or loss when hesells foreign currency at 2 different markets. In this role the bank, both domesticbanks and foreign banks as well as the guarantor of U.S. funds.
# 3. The third function is to conduct the arbitration. Arbitration is essentially thedifference between the interest rates of the two currencies are different. And the Arbitration Act is actions taken to benefit from the difference in the currency itself.Simply put this action done by buying a currency is low in value in a country, and sellthe currency in a country where the high value of the currency.
Related articles: Forex Broker Indonesia ~ a very promising business Potential
The Perpetrator In The Forex Market
On the forex markets certainly there are several parties involved and exert influence in it or the term as a player in the market. Forex market players can be divided into 6 asfollows:
1. Bank
The Bank holds an important role in the forex market. In this case the known terminterbank market (PUAB). PUAB own role to meet almost all needs of the buying and selling of currency turnover as well as in the field of global business. In performing its function sometimes the bank will do the process of buying and selling currencies on behalf of its customers. However, in large amounts, then the transaction will be madeon behalf of the bank itself.
PUAB himself was also used by the broker to profit in forex sellers and buyers meet in person. From there the forex broker can get a little advantage. But this time, thesystem used PUAB already developed electronic systems more effective and efficient.
2. The needs of
The forex market is both the needs of companies or businessmen when makingpayment using foreign currencies.
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