What is forex?
The over-the-counter or off-exchange retail foreign currency market, also referred to as the ‘Forex’ or ‘FX’ market, is the largest financial and investment market in the world trading over $3.8 trillion a day. Forex is the simultaneous buying of one currency and selling of another to international banks that settle on the spot. The world’s currencies are on a floating exchange rate and are always traded in pairs, for example Euro/Dollar or Dollar/Yen. Forex investors use various methods of analysis (both technical and fundamental) in an effort to predict future price movement and thus trade from well timed transactions.
Forex and ‘FX’ are shortened terms used for ‘foreign exchange’. Foreign exchange or ‘currency trading’ is the exchange of money from different countries. The value of one country’s currency is constantly changing against the value of another country’s currency. Forex traders make money through buying and selling currencies on the foreign exchange market.
• History of Forex • Mini Forex • Currency Forwards • Fx Contract Sizes • Forex Glossary • Forex FAQ’s • Currency Options • Overview of Fx Options • Options Glossary • Options Price Dynamics • Options Pricing • Option Types • Education Point • More About Forex • Money Markets • Market Institutions • Interest Rate Options • Forward Prices & Rates • Acc.
The Forex (foreign exchange, FX, or 4X) market is a market where one currency is traded for another. It is the largest financial market in the world, with daily turnover in the trillions of dollars. Forex trading involves trading currency pairs such as the EUR/USD pair (Eurodollar/US dollar pair) where a buyer of this pair would actually be buying the Eurodollar and simultaneously selling short the US dollar.
FOREX – the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world. Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates. In the foreign exchange market there is little or no ‘inside information’. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time. Currencies ar
