Printer-friendly version Send to friended version the foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies.
Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The purpose of the foreign exchange market ‘Forex’ is to assist international trade and investment. The foreign exchange market allows businesses to convert one currency to another foreign currency.
For example, it permits a U.S. business to import European goods and pay Euros, even though the business’s income is in U.S. dollars. In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency.
The foreign exchange market is unique because of: Trading volume results in market liquidity Geographical dispersion Continuous operation: 24 hours a day except weekends, i.e. trading from 12:00 GMT on Sunday until 23:00 GMT Friday The variety of factors that affect exchange rates The low margins of relative profit compared with other markets of fixed income The use of leverage to enhance profit margins with respect to account size As such, it has been referred to as the market closest to the ideal perfect competition.
The average daily turnover in global foreign exchange markets is estimated at $3.98 trillion as of April 2007. Trading in the world’s main financial markets accounted for $3.21 trillion of this. Around $1 trillion of this in spot transactions, and $1.7 trillion of this in foreign exchange swaps. Getting Started Whether you’re a novice or an experienced trader, this section will help you make the most of trading online.
We’ll help you get started and give you all the help you need to read and understand the trading markets. By opening a risk-free Demo Account, you will be able to trade the Forex market with virtual money.
Then when you’re ready to open a Live Account, we’ll be here to help make sure you understand the process every step of the way.