What is Forex


What is Forex? Forex the Foreign Exchange Market

At the end of the 1970s, after abolishing the fixed rate system of national currencies as compared to US dollar, the FOREX market started to be formed (Foreign Exchange operations operation of exchange of currencies based on demand and supply). By now the FOREX market has turned into a global market that is united by a communication network and that is opened on Monday morning in New Zealand and is closed on Friday evening in the USA. Depending on the time zone and on the entering of various regional participants on the market, everyday trade on the forex market is divided into several trading sessions. Below we mention the main regional sessions on the FOREX market.

American and Asian sessions are the most aggressive, the biggest volume of operations falling on the European sessions. New Zealand and Australian sessions are considered as the most quiet.

The product that is traded at the FOREX market is money (a product with 100% liquidity) a product that has both buyers and sellers at any time on the FOREX market. Twenty-four-hour access to the foreign exchange markets of Asia, Europe and America make it possible for the trader (a person, who manages capitals on financial markets) to make transactions at a most profitable price, while a bank credit with a 1:100 leverage provided by its counterpart allows the trader to get high profit with a relatively small collateral (own means) within a short period of time. The fact that it is very simple to do the transactions (over the phone or using Internet) makes this market attractive for business people.

Unlike other markets, the FOREX market is characterized by the biggest volume of trade, minimum cost of the transactions and the quickest way of the flow of funds. Liquidity of the forex market has grown up to several trillions a day. At present, operations on the FOREX market are the main source of income for many leading banks and other financial institutions in the world.

What is Forex? History of Forex Market Development

The international foreign exchange market has deep centuries-old roots. It dates back to thousands years before Christ, when the first metal coins were minted in Egypt. Currency exchange operations in their present conception started developing in middle ages. It was connected with the development of international trade and navigation. Italian moneychangers that earned money by exchanging currencies of different states are considered the first speculators in foreign currency.

As intergovernmental relations developed, the market of currency exchange operations altered and assumed a more and more clear shape. The most significant changes in the development of the foreign exchange market were done in the 20th century. The FOREX market started gaining its modern characteristics in the 1970s, when the system of fixed rates of one currency, as related to another currency, was eliminated.

After the restrictions for currency fluctuations were removed, a new type of business appeared that was based on getting profit in the conditions of the free system of exchange rates. The change in the rate is conditioned by various market conditions and is regulated only by demand and supply.

What is Forex? Forex and New Technologies

Not only the number of players is growing, but also the qualitative approach. Having proved to be the most mobile financial market, FOREX instantly traces all most interesting scientific and technical achievements and implements them into business practice. The age of internet was one of the most significant stages in the development of FOREX. Proving their dynamism and mobility, the FOREX specialists were able to quickly find applications in the computer network, using it with the highest profitability.

An opportunity appeared allowing the specialists to do what previously seemed to be unconceivable. Now Internet allows traders to trade currency in any part of the world and at any time.

Doing transactions with the use of leverage can have a considerable effect on the status of the trading account, both in your favour, as well as against you. Please remember that any professional trader risks only the money the loss of which will not lead to financial collapse. That allows the trader to make sensible and cool-headed decisions. Make sure that you are fully aware of the degree of risk and you are ready to bear full responsibility for the transactions carried out.

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