Forex exchange market, commonly known as forex, is the place where trading of currencies occurs. Regardless of whether they realize it or not, currencies are important to all nations and individuals. Forex is the biggest market, and the exchange of currencies makes it one of the most liquid financial markets. All other markets appear like dwarfs compared to them including the stock market, owing to the need for currency exchange.
The forex market does not have a central marketplace, since all transactions are carried out over-the-counter. Every transaction in this system occurs through computer networks rather than a single centralized exchange. This market remains open for five days a week and 24 hours a day. The forex market is active at all times of the day, since a trading day starts in Tokyo and Hong Kong, when it ends in the U.S. Also, the continuous change in price quotes makes the market even more active.
A forex deal is a contract with a market maker and currency trader indicating which currencies are being purchased and sold, the amount and exchange rates at which both currencies will be traded. All trades conducted regarding forex, are conducted through three markets, spot, futures and forwards. Forex trading has always been the largest, since it is the real asset based on which the forwards and futures market function. Initially, the futures market was quite popular, since individual investors could access it for extended duration. However, with electronic trading, spot market has become popular, and is the favorite market for most traders, investors and other individuals speculating or studying the trades. Investors generally use the term forex market, however, the term refers to the spot market, since it is the most commonly used market for trading forex. Forwards and futures markets are generally popular amongst companies, which want to hedge their forex risks to a specific future date.
All types of forex deals are binding, and with futures and forwards markets they are often settled in cash, upon its expiry. However, deals can also be purchased and sold before their expiry date. Futures and forwards market both offer protection against risk, when trading currencies. Therefore, traders often have a safety net, preventing them from losing their entire capital. Speculators often form a part of the regular groups using the futures and forwards markets, since their interest lies in learning about all markets, and they continue with research in order to predict and speculate the outcomes successfully.
The forex market does not have a central marketplace, since all transactions are carried out over-the-counter. Every transaction in this system occurs through computer networks rather than a single centralized exchange. This market remains open for five days a week and 24 hours a day. The forex market is active at all times of the day, since a trading day starts in Tokyo and Hong Kong, when it ends in the U.S. Also, the continuous change in price quotes makes the market even more active.
A forex deal is a contract with a market maker and currency trader indicating which currencies are being purchased and sold, the amount and exchange rates at which both currencies will be traded. All trades conducted regarding forex, are conducted through three markets, spot, futures and forwards. Forex trading has always been the largest, since it is the real asset based on which the forwards and futures market function. Initially, the futures market was quite popular, since individual investors could access it for extended duration. However, with electronic trading, spot market has become popular, and is the favorite market for most traders, investors and other individuals speculating or studying the trades. Investors generally use the term forex market, however, the term refers to the spot market, since it is the most commonly used market for trading forex. Forwards and futures markets are generally popular amongst companies, which want to hedge their forex risks to a specific future date.
All types of forex deals are binding, and with futures and forwards markets they are often settled in cash, upon its expiry. However, deals can also be purchased and sold before their expiry date. Futures and forwards market both offer protection against risk, when trading currencies. Therefore, traders often have a safety net, preventing them from losing their entire capital. Speculators often form a part of the regular groups using the futures and forwards markets, since their interest lies in learning about all markets, and they continue with research in order to predict and speculate the outcomes successfully.
