Foreign Exchange : The buying and selling of Foreign Exchange is known as Foreign exchange trading or Forex Trading. Launched in the 1970’s, it is the largest financial market in the world where money is bought and sold freely with a daily turnover of over $2.6 trillion. The Forex market deals with more than hundred times the daily trading on the New York stock exchange. The Forex market has no physical address. It is working 24 X 7 through an electronic network of banks, corporations and financial traders. The commercial or investment banks and other big financial organizations are the main players in the Forex Market.
Foreign Exchange Prices : International trade flows and market flows are the main regulators of the Foreign exchange markets. Although for a very short period, it also gets affected by interest rates and political instability. The two most important words in Forex Trading is “Bid” and “Ask”. “Bid” is the price at which the traders are ready to sell and the Dealer is ready to sell whereas “Ask” is the price at which the dealer is ready to sell and the Trader is ready to buy. Spread is the difference between the Bid and Ask
Foreign Exchange Markets : Foreign exchange traders take their decisions either on technical analysis or on fundamental analysis basing on different parameters. It is the largest market in the world with a daily turnover of $1.9 trillion.
Investment : Forex is an excellent market for investment as it is free from any external control and free competition. The trading takes place between the two dealers, either over the telephone or through Internet, all over the world. The major trading centers are the ones at Sydney, London, Frankfurt, Tokyo and New York, making Forex a 24-hour market.
Day Trading and It’s Impact : the opening and closing positions of the market within the same day is known as Day Trading. The day traders try to earn as much profit as they can within a day. Most of the day traders treat this as a part time job. Liquidity and Efficiency are the two most important things that are offered to the market by the day traders because the market is completely dependent on the buyers and sellers.