The What, When, And Why Of Forex

The Foreign Exchange market has common abbreviations like Forex, Forex market, and FX. In reality, around the world it is the biggest financial market, where money from around the globe is sold and bought freely. The Forex market was founded in the seventies, when free exchange rates were then introduced, and only the participating market can be able to determine the price of each currency against others.

Everyday, the daily turnover reaches trillions of dollars; the Forex market bears more than three times the combined amount of the Equity and Treasury markets of the United States. The Foreign Exchange market is an over-the-counter style of market, that buyers and sellers perform Forex business at, by using different means of communication.

Not like other financial markets, the Foreign Exchange market has no tangible location, or central exchange location. Because the Forex market lacks tangible exchange, the market trades unceasingly on a 24-hour-a-day basis, and moving from one time zone to another.

Trillion of dollars of Forex activity takes place with each passing day. From the year 1997 to 2000, daily foreign exchange trading volume soared approximately from $5 billion to $1.5 trillion. It is rather difficult, if not inconceivable, to identify an absolute exact figure, since trading is not concentrated on an exchange. There is one thing for sure: The Forex market proceeds to grow at an extraordinary rate.

Before the birth of the Internet and e-commerce, only huge corporations, wealthy independent investors, and multinational banks, could trade currencies in the Forex market, by making use of propriety trading systems inherent in most banks.

These said systems required as much as about $1 million to register to open an account for trading. With the help of technology advancement online, investors, even with only a few thousand dollars, can participate in the Forex market 24 hours a day and 5.5 days a week.

The foreign exchange market is a non-stop money market, where different currencies of different nations are being traded, normally with the help of forex brokers. Foreign currencies are perpetually bought and sold across global and local markets, and also traders decrease, or increase, the value of their investment, based upon the movements of the currency.

Forex market conditions can vary at any time, so it is mainly considered to be a greatly fragile and volatile market, too. Circumstances of the Foreign exchange market never stay the same - they change every second.

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