Some Facts About The Forex Market
The Forex market is a global financial market for purchasing and selling different currencies. In fact, it handles a great volume of transactions round the clock five days a week. You have to know that daily turnover of the Forex market is about 4 trillion dollars.
The Forex market was created in the beginning of 1970s with the elimination of fixed currency exchanges. The Forex market grew during the 1970s, however with the technological development of the 1980s the Forex market grew from trading levels of 70 billion dollars a day to the current level of 4 trillion dollars per day.
In fact, the Forex market consists of about 5000 different trading institutions like central government banks, international banks, different commercial companies as well as brokers for all types of foreign currency exchange. As well it is necessary to mention that there is no centralized location of the Forex market. Instead, there are several major trading centers which are located in Tokyo, London, New York, Singapore, Honk Kong, Frankfurt and Paris. One of the distinguish features of the Forex market is that all the trades are done through the phone pr over the World Wide Web. Some businesses utilize the Forex market to sell and purchase different products in other countries, however the majority of the activity of the Forex market is from currency traders who utilize it to make money from small movements in the market.
Even if there are a lot of great players in the Forex market, it is accessible to the small investors due to the recent changes in the regulations. In the past, a minimum transaction size was required and traders were required to meet these financial requirements. With the development of the internet trading, regulations have been changed to allow great interbank units to be broken down into smaller lots. In fact, each lot is worth about $100,000 and is accessible to the personal investor through leverage. Leverage is a loan extended for the trading. As a rule, lots could be controlled with the leverage of 200:1. This means that $100 allows you to control $20,000 currency exchange.
Below there are some benefits of the Forex market trading:
– Due to the size of the Forex market, investments are quite liquid. Different multinational banks are constantly providing vaerious bid and ask offers and the high amount of different transactions on a daily basis means that there is always a purchaser and a seller for any currency.
– The Forex market is open round the clock from Monday morning Australian time till Friday afternoon New York time.
– As a rule, currency fluctuations are caused nu changes in national economics. News about these changes is accessible to everyone at the same time.
As in any other niche of our life foreign exchange market needs some knowledge.
This does not imply that after reading even the greatest materials you will start making money, but this info will save you from many traps. And even if you decide to get the assistance of a forex managed account service, still you will be able to make a much wiser decision.
And a final piece of advice – today the online technologies give you a really unique chance to choose what you want at the best terms which are available on the market. Strange, but most of the people don’t use this opportunity. In real practice it means that you should use all the tools of today to get the info that you need.
Search Google or other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and join the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.
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