What is FOREX
The term foreign exchange market refers to the world’s largest financial market where world currencies are bought and sold against one another. Unlike the commodity and stock markets, it is not a physical market based in one building or location. Rather, it is an organizational framework, within which participants linked by telephone and computers buy and sell currencies.With the advent of international trade and the absence of an international monetary unit, one of a nation’s prime concerns is the rate at which its own local currency can be exchanged for units of a foreign currency. This system of global trading in foreign currency is known as the Foreign Exchange Market, or Forex. In comparison to the average daily trading volume of $300 Billion in the US Treasury Bond market and the less than $10 Billion exchanged in the US stock markets, the Forex market trades to the tune of more than $1.6 Trillion a day. It is by far the largest and most liquid market in the world. The major traded currencies on the foreign exchange market are Euro, Swiss Franc, US Dollar, Sterling, Japanese Yen, and Australian Dollar. Using technical and fundamental analyses the investor can make large profits by participating on this global market.The market runs 24 hours a day in the major financial centers around the world.Most Forex transactions occur via telephone links and computer terminals located in and out of the world’s major financial centers.Traditional participants in the entire process are financial institutions, banks, corporate customers, brokers, etc.Actual currency is not seen; instead, it is transferred electronically from one bank deposit account to another.