Forex: The Market Or A Stock Exchange?

By in Intro to Forex on March 7, 2016

Very often Forex is called as not the exchange market, but a currency stock exchange that, however, not absolutely true as the currency stock exchange is only one of elements of an infrastructure of the exchange market, a place where the free purchase and sale of native currencies is performed.

This sale is built according to the course ratio, called as quotations which develops in the exchange market under the influence of supply and demand. Besides the primary goals of a stock exchange – mobilization free at present time of currency resources, their correct redistribution, and also an establishment of a market rate national and foreign exchange. And the exchange market is a set of all conversion and credit-depositary operations in foreign exchanges which are performed by participants of the exchange market. That is the exchange market, unlike a currency stock exchange is more complete concept which covers more wide range of operations. Also it is necessary to notice that the name exchange market in addition underlines a market principle of forming of quotations – ratios of national currency rates.

In whole, operations in the exchange market Forex are divided on the purposes: they can be trading, hedging, regulating and speculative. However, so far as concerns earnings in the market Forex, means margined speculative trading more often. Speculative because profit earning goes only at the expense of a difference between rates, and margined as the money given to the participant of currency transaction by means of the broker on credit in advance stipulated sum, that is why margins is used. Such trade in turn has a number of features: for example, it, of course, demands some start capital, but it can be absolutely small, here there is no competition, constant development of new skills isn’t necessary, besides in the exchange market Forex isn’t present hierarchy, that is system of chiefs and subordinates.

Set of all these features work in the exchange market Forex even for beginner traders.

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