What Is Forex, Anyway?

1. The FOREIGN CHANGE (FOREX or FX) Market is not a market in the traditional sense. In fact, it is the closest thing to "a perfect market" from a pure economics perspective. Because all transactions are conducted online, there is no central location where trading takes place as in other forms of stock trading. Copyright (c) 2008 Orlando Thompson The FOREIGN CHANGE (FOREX or Guest Posting) market isn't a "market", in the traditional sense. In fact, it is the closest thing to "a perfect market" from a pure economics perspective. There is no centralized location for trading as there is in other forms of stocks and trading. Trading occurs around the clock over the telephone and on computer terminals at thousands of locations around the world. Foreign Exchange or (FOREX) is also the world's largest trade market. The daily market turnover has soared from 5 billion USD (and even more) in 1977 to staggering 2.5 trillion dollars (and even more) today. This is 100 times more than the daily turnover on the NASDAQ. Most foreign exchange activity consists of the spot business between the US dollar and the six major currencies (Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar), but the FOREX market is so large, and is hosting so many participants, that no single player, governments included, can directly control or make any significant influence over the direction of the market. The FOREX market is the most dynamic market in the entire world. FOREX trading is done by central banks, commercial banks and international corporations as well as money managers, speculators and private individuals. Foreign exchange (FOREX) is the trading of contracts of currency pair exchange rates. It is a NON-DELIVERY trade, which means that there is no physical transaction of currencies, but it is rather an agreement, or "contract" (FOREX DEALS), to trade specific volumes of a pair of currencies at an agreed upon rate. The magnitude of such FOREX trades is that, in order to make the deal, only a proportional amount is needed (the COLLATERAL, or the MARGIN). If the exchange rate of a currency pair has changed by a certain percentage, then the value invested in the MARGIN will also change. However, it would be a higher proportion. In fact, the actual change onto the Forex trader's crypto 9 investment (the MARGIN they deposited), will be the nominal change occurred to the exchange rate, multiplied by the MARGIN ratio (the leverage). This is an example of a FOREX Day-Trading deal made to buy EUR 100,000 against USD at 1.3500. The MARGIN required for this deal (offered by the FOREX Trading Platform) is of a ratio of around 1:100. The trader only invests USD $100. The exchange rate rose to 1.3620 after a few short hours. This is an increase of 0.89%, which is quite normal for the global Forex market. The trader's investment increased by 89% thanks to the MARGIN (= LEVERAGE) (since a leverage ratio of 1:100 was used). This can happen within a few hours, or minutes. The same could happen in the opposite direction,

2. however - the traders cannot lose more than their original MARGIN deposited (in other words we could say: you can profit unlimited amounts, but you can lose not more than 100% of your original investment, in this case $100). Forex traders can choose to buy or sell EUR in the deal. They may make money (if they were right ...)) when EUR falls. Forex trading is available today not only for the MAJOR (the world's leading currencies), but also many other currency pairs, including exotics, gold, silver, etc ...). So don't just stand on the side lines wishing you had taken this opportunity to make a fortune, invest now and make is happen for yourself today.