WHAT IS FOREX

[smithlover84]

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 are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.

 

Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.

 

Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.

 

Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.

 

This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).

 

Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day. 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 are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.

 

Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.

 

Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.

 

Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.

 

This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).

 

Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.

[Legendkid]

I just finish reading this post,aha,it is really interesting to read,and i tell you,as a forex newbie,this tutorial sounds great,but it looks like you did repeat half of your post,is it your browsers fault?well thank's for this brother.

[boniez]

I just finish reading this post,aha,it is really interesting to read,and i tell you,as a forex newbie,this tutorial sounds great,but it looks like you did repeat half of your post,is it your browsers fault?well thank's for this brother.

lol I guess it's not the fault of the browser, but because he was wrong when pasting that text lol ... because it is not genuine homemade, but at least he's trying to provide info that is good enough to understand about it

[t2t]

Yes i think this is not home made post. And beside link should be given when pasting other people work, i think this is know as stealing- i can't remember the popular word for it, so i use stealing- beside to me this whole write up is boring.

[senger]

Forex is a major global market depends on the exchange, a market that trades a lot of people a day than a million people

[flybiz08]

Forex trading has a lot of influx becasue of the attractive features the market offer. Features like attractive leverage. Leverage is a two edged sword and if a trader uses leverage to its full potential. fains can be amplified and in the same vain, losses can also be amplified.

[monyitomon]

Yes, so, that it wouldn't consider as a copy/paste when you put the links where you copied it. Anyway, Forex trading is exchanging of one currency to another more simpler definition. Yeah! Forex it is the largest? or just one of the largest but as what i know it is the largest market in the world.

[adnan007]

FOREX stands for Foreign Exchange and it is a huge industry. Forex is related to the trading of one currency for others in pairs. You might have come across situations when you would have opted to exchange your countries currency for other countries. This is done through Forex with the exchanging rates is decided by the market itself.

[pepy]

if you ask me about forex, i will tell you this one is a good field for members to earn money, but not easy as many people think, it is related about trade from a currency to the other country currency and the market is move everyday also not easy but sometimes could be easy to predict.

[faceless]

@Trickster, yea it is really not as easy as some ppl think. I gave it a go last year without any practise or knowledge. So basically a bit like gambling. And sometime I get lucky, but most other times, I just lose. Probably because my prediction is just awful as I do not have the experience.

[monyitomon]

Well, if you really don't have the knowledge and experience then you're likely to fail because for sure you are trading based on what? Just guessing? Well, i guess so.. that's why some says that Forex trading is like Gambling, it is when you don't have knowledge and experience.

[boniez]

 

the point is forex included into the one of the high-risk, moreover this business is done in the online world, especially online forex have the risk is much greater than forex trading offline,,, so you should really pay attention to the risks

[monyitomon]

No doubt that Forex is really a risky business. It's not just a usual business because in Forex we always need to use our brain, it really needs skills in this field and without that? You will not be successful in Forex trading.

[pepy]

@Trickster, yea it is really not as easy as some ppl think. I gave it a go last year without any practise or knowledge. So basically a bit like gambling. And sometime I get lucky, but most other times, I just lose. Probably because my prediction is just awful as I do not have the experience.

i think what you said is right, forex like gamble a bit , just a bit. mostly cover the sense from ourselves to see how the market move, and but still many people think to earn here only need little experience and then you will get a lot of bucks after that you can make more and more fund, but we need a lot of basic and also experience here

[Cutiekc]

The thread started gave a good defination of forex trading startin from when it started and how it started,perhaps i think we can equaly put it in our own understanding which is forex trading is the exchanging of currency in pairs where by we sell the one we have to get the other.

[budado]

No doubt that Forex is really a risky business. It's not just a usual business because in Forex we always need to use our brain, it really needs skills in this field and without that? You will not be successful in Forex trading.

I do agree that we need to have brain for forex to earn and lets face its forex is not for everybody. Every body can join and trade but not every body can earn every month as a passive income generator. That's why if you are failing in forex trading don't think that its because forex is hard its just because forex is not easy way to learn. And if you don't learn in forex trading you don't earn.

[boniez]

I do agree that we need to have brain for forex to earn and lets face its forex is not for everybody. Every body can join and trade but not every body can earn every month as a passive income generator. That's why if you are failing in forex trading don't think that its because forex is hard its just because forex is not easy way to learn. And if you don't learn in forex trading you don't earn.

 

 

 

 

 

 

 

because the forex is not an easy thing, where we need special skills if they want to master the business of forex, many traders who fail to achieve success because they can not get experience with efficient way, and too much wasting money and time

 

 

 

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[Tariq777]

FOREX is a business of making money where we make money by the movements of the currency pairs

[rexway]

From my own look of thing forex is a process by which each currency is traded or exchange to that of another country at the point of the exchange rate at a particular time,this means that we can exchange the USD/EUR by means of interchanging transaction.

[Tariq777]

Forex is the trade of the currencies of the world and it deals with the economy of the world

[maxzah]

FxCompany Ltd offers innovative trading technologies and brokerage services on Foreign Exchange Market (FOREX) as well as on CFD, stocks, precious metals and futures markets.The Company is primarily interested in long term partnership, that is why we strive to be in step with the times . FxCompany Ltd was one of the first companies to cancel commission fees, lowering spread to 0.5 point – which allows our clients to save up to 40% of their money, compared to other dealing centers. .Every new customer who opens Standard live account can get 50% welcome bonus for first payment to his trading account. This serves as a solid ground for profitable trading of our clients. FxCompany Ltd is a rapidly developing company, which has representative offices, branches and partners across the globe. We endeavor to be a reliable company with impeccable reputation and the most respectful attitude to our clients. http://www.fxcompany.net/

[venkateshfx]

Forex means Foreign exchange. Forex trading means, traders will trade in pairs which will decide the exchange prices. The pairs are 2 currency where we need to exchange the currency. There are too many banks using Exchange prices from This market. We can earn unlimited money from this market by investing some funds.

[fari]

forex business is about the trading of currencies.there are different pairs and the best pair is EUR/USD and the most liked pair also. it is famous world wide and people are joining it in a great number.

[rizal83]

Forex is an abbreviation of 'Foreign Exchange' and the language may be more appropriately called a foreign currency exchange. While trading is trading, so that the term Forex Trading could be called 'foreign currency trading. Foreign currency trading is often heard people refer to it as' foreign currency trading or foreign exchange trading "or trading exchange.

 

Capital Market or Forex is the largest financial market in the world, the perpetrators include government central banks, investment banks, as well as of the individual / individuals where currencies are traded. But lately more of the individual perpetrators are in because of the forex market where trade is more easily done bargains 24 hours every day except Saturday and Sunday.

[taru012345]

Forex is a home based on line trading business.Every body around the world can do the business with the foreign curency.Euro/USD can promote here to invest.If some do jobs can also do forex trade in part time.