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Forex Market: A Guide to Unique Market of Currencies

Discussion in 'Forex Trading Signals & Forecasts' started by Adam Smith, Aug 5, 2016.

  1. Adam Smith

    Adam Smith New Member Trader

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    The foreign exchange market or forex market is the biggest market in the world, although it does not get the media attention like other markets. It towers over the other market with over trillions of dollars worth transactions every day. Easy markets forex broker suggests that beginners in forex market must gain knowledge of the market before investing.

    What is forex?

    Forex is a market in which currencies of different countries are traded. Currency is unique to a country. Currencies need to be exchanged when a traveller travels to foreign countries. Currencies are also exchanged when businesses conduct international trade, buying from foreign clients and selling to foreign clients. Now-a-days currency exchange also takes place when a customer buys goods from other countries by placing the order online. One can say that huge currency transaction takes place every day making the forex market one of the most liquid market, which attracts the attention of investors. The market operates 24 hours a day and five days a week.

    Who are participants of forex market?

    Forex is a decentralised market, which means there is no central place from where it operates. As the technology has evolved, currency market has become accessible to all. Forex traders can trade at anytime on a trading day from their computers. Traders can trade from any corner of the world. Apart from individual investors, other participants participate in the forex market. Each market participant has different reasons to participate in the market.

    Financial institutions are major in the forex market. Government and central banks operate in the market to strengthen the economy of a country. Banks make credit currency transactions with other banks. Companies and businesses also take part in the forex market. They generally prefer short term trades in spot market.

    How is forex unique?

    Forex market is unique in comparison to other markets. There are no exchange rules and it is not controlled by any central governing body. Brokers in the forex market earn from the difference between the buying price and selling price. There is no commission involved.

    Trader has a freedom to trade from anywhere in this world and at anytime of the day. Trading is done through trading platforms provided by the forex broker. It is easy to get into a trade and sell out a position, when a trader wants to, at a click of a button. There is no limit on how much currency a trader can buy.

    Who is forex broker?

    As you already know that forex is a decentralised market with no central marketplace. Traders need a link that can connect them to the market. Forex brokers act as a channel between traders and currency market. Traders conduct all their trading activities through forex brokers.

    Traders create a trading account with the broker on which they have to maintain a minimum margin. They provide trading platforms to the traders, who register with them. Trading platform is online software, which helps the trader to make trading transactions and analyse the market. Brokers also provide leverage or loan on trading accounts.

    Forex market is a unique market with immense earning opportunities. A trader with profound knowledge of the forex market and refined trading skills can benefit from the currency trading.
     

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