The
Foreign Exchange Market (FOREX)-Forex is an
acronym for
FOReign EXchange and is the worldwide cash inter-bank or inter-dealer
market
that uses a floating exchange rate system. Most people have never heard
of
Forex. Yet, it is the world's largest financial market with an
estimated daily
average of more than $1.5 TRILLION. Some say that it would take the
entire New York Stock Market
about 3-4 months of daily trading to equal one day of trading in Forex!
Forex
–
currency exchange is the biggest financial market in the word nowadays,
with
daily turnover outstripping 1.9 trillion dollars. It’s basis
are transactions
made 24 hours a day between banks and financial institutions called
Interbank. Interbank begins it’s day in Sydney,
and continues through Tokyo and New York to London
along with awakening of other financial capitals.
Nowadays
numerous investors profit on currency transactions using
unusual fluency of Forex, its clarity and strong technical trend. Till
now,
according to huge transaction units and high financial requirements,
main
beneficiaries of currency market were banks, currency dealers and great
speculators. The development of computers and Internet enabled access
to
advantages of Forex for numerous investors all over the world.
Forex
Marker is OTC market (Over The Counter). It means that
transactions are
realized by both sides via phone and/or electronic systems, and
turnover is not
centralized. The trade starts in Sydney, next
moves to Tokyo and London
to close the day in New York.
Trade on Forex market lasts 5 day each week, starting on Sunday at
11:00pm and
ends on Friday at 11:00pm (local time).
Characteristic
features of Forex.
As
mentioned earlier, Forex Marker is also called OTC market (Over The
Counter). It means that
transactions are realized by both sides via phone and/or electronic
systems.
Turnover is not centralized. Nowadays numerous investors profit on
currency
transactions using unusual fluency of Forex, its clarity and strong
technical
trend. The volume exceeding 50 times value of all American
share’s markets
altogether ensures credibility of technical analysis, security of
transactions
and the best protection against artificial price changing attempts.
One
of the most significant aspects of Forex are risk limiting strategies.
Investors often use the “stop-loss” order and
orders with price limit. High
turnover guarantees almost 100% realization of any defending orders and
success
in investment strategies. Moreover, 24 hours a day, 5 days a week
turnover
cause that so called price gaps (when closing price are significantly
differs
from next day opening price) are very rare.
Next
unique feature of Forex are strong trends and lack of bull market
and boom. Investors trade couples of currencies, so when one is falling
the
second one is in increasing trend. This fact is important for
investors, who
choose any trend (increasing or decreasing). You can make up your mind
in any
moment which trend you want to bet on, according to where your strategy
suits
best and where you feel comfortable.
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