The Forex market is the world’s largest financial market.
The Forex (FX) market is a network of institutions that allows trading 24 hours a day, five days a week, except when all markets are closed for holidays.
Individual traders can open a Forex account and buy and sell currencies through this account. These traders generally don’t want to have to deliver the entire currency they are trading in. Instead, they want to profit from the price differences in their currencies over time. Therefore, brokers change positions every day.
Profit or loss arises from the price difference at which the currency pair is bought and sold. Forward and futures are other ways to participate in the forex market. Expiry can be customized with currencies exchanged after expiration. Futures are not customizable and are more easily used by speculators but positions are usually closed before they expire (to avoid
Spot market agreement refers to immediate delivery defined as two working days (for most currency pairs). The biggest exception is USD / CAD trading which is closed within one business day. The business day calculation excludes Saturday, Sunday and public holidays in any currency of the trading pair. During the Christmas and Easter season, some spot trades can take up to six days to occur. The currency exchange is made on the settlement date, not the
The US dollar is the most actively traded currency. The Euro is the most actively traded counter currency, followed by the Japanese Yen, the British Pound and the Swiss Franc. Market movements are driven by speculation, economic power and a combination of growth and interest rate differentials.
Advantages of Forex:
❖ The largest financial market
❖ Anyone can take part
❖ High volume and liquidity
❖ The market does not have a certain owner
❖ Trade of “Highs” and “Lows”
❖ 24 hours open market
❖ No commission from many accounts
❖ Low Transaction Fees
❖ Leverage System