The Basic Facts Of Forex
The foreign exchange market is called forex. If you exchange bucks for EU bucks at you bank, your bank bundles your transaction with other transactions and trades them on the foreign exchange market. The idea is to get the maximum favorable rate of exchange. In this manner your bank intends to turn a profit on your exchange. Forex exists to help global investments and trade. If you went to Europe with dollars, you couldn't spend them. World companies have the same problem, so currency exchange exchanges the currency.
In contrast to the stock markets, currency exchange doesn't have a particular location. It operates when world wide banks operate and is open twenty-four hours per day, from the opening of business in New Zealand on Monday, to the end of business in the East on Fri..
Most of the traders are central and world banks, and world business corporations.
In contrast, about eighty percent of the trading is done by the 10 most active traders, which are huge international banks. These traders make up the top tier of the market. The difference between the bid and ask prices at these levels are extremely narrow and unavailable to the rest of the traders. These top tier traders account for 53% of total trading volume. Below the top tier are smaller investment banks, big multi-national companies and large hedge funds.
The 10 most active traders do about eighty percent of the trades. These are enormous global banks and they make up the top tier of the market. The profit markups at this level are very small and the bid and ask costs aren't available to traders outside the top tier. About 53% of the trading volume is done in the top tier. The following tier consists of giant world corporations, investment banks and massive hedge funds.
Many of the transactions, about 70%, are of a hopeful nature. That is, they are done in the hopes of earning a profit rather than an exchange for practical use. Average investors can only get access to this market thru a foreign exchange foreign exchange broker. Till recently, their were very few restrictions on the practices of the brokers. There is an ongoing effort to break down and eliminate brokers who take trades that are in clash with the best interests of their clients.
Foreign exchange is a speculative market. Although it could be less dodgy than high risk stock trading, as with any investment there's a potential for both gain and loss. When shake ups in the market occur, most traders head for the safest, or most stable currencies, like the Swiss franc. This drives the rate of exchange up on those currencies.
differing kinds of trading instruments include the futures contract which is usually for a quarter, and the spot exchange which is analogous to a futures contract, but is routinely a 2 day exchange. The forward contract limits risk somewhat, because money does not change hands till an agreed on date in the future. One type of forward contract involves a swap, where 2 parties exchange currencies for an agreed on time period. The currency exchange option gives the holder the right, but not the obligation to exchange one currency for another an at a previously concluded upon rate of exchange on a pre set date. The option is similar to a stock option.
The currency market can be moneymaking and has far more liquidity than other investments. Investors wanting to enter this market should check with other investors to locate a reputable broker. Its smart, as with any investment stradegy, to do you homework and learn as much about the market as possible. It can be a extremely equitable investment for the savvy trader and you can get your money when you want it. - 23200
In contrast to the stock markets, currency exchange doesn't have a particular location. It operates when world wide banks operate and is open twenty-four hours per day, from the opening of business in New Zealand on Monday, to the end of business in the East on Fri..
Most of the traders are central and world banks, and world business corporations.
In contrast, about eighty percent of the trading is done by the 10 most active traders, which are huge international banks. These traders make up the top tier of the market. The difference between the bid and ask prices at these levels are extremely narrow and unavailable to the rest of the traders. These top tier traders account for 53% of total trading volume. Below the top tier are smaller investment banks, big multi-national companies and large hedge funds.
The 10 most active traders do about eighty percent of the trades. These are enormous global banks and they make up the top tier of the market. The profit markups at this level are very small and the bid and ask costs aren't available to traders outside the top tier. About 53% of the trading volume is done in the top tier. The following tier consists of giant world corporations, investment banks and massive hedge funds.
Many of the transactions, about 70%, are of a hopeful nature. That is, they are done in the hopes of earning a profit rather than an exchange for practical use. Average investors can only get access to this market thru a foreign exchange foreign exchange broker. Till recently, their were very few restrictions on the practices of the brokers. There is an ongoing effort to break down and eliminate brokers who take trades that are in clash with the best interests of their clients.
Foreign exchange is a speculative market. Although it could be less dodgy than high risk stock trading, as with any investment there's a potential for both gain and loss. When shake ups in the market occur, most traders head for the safest, or most stable currencies, like the Swiss franc. This drives the rate of exchange up on those currencies.
differing kinds of trading instruments include the futures contract which is usually for a quarter, and the spot exchange which is analogous to a futures contract, but is routinely a 2 day exchange. The forward contract limits risk somewhat, because money does not change hands till an agreed on date in the future. One type of forward contract involves a swap, where 2 parties exchange currencies for an agreed on time period. The currency exchange option gives the holder the right, but not the obligation to exchange one currency for another an at a previously concluded upon rate of exchange on a pre set date. The option is similar to a stock option.
The currency market can be moneymaking and has far more liquidity than other investments. Investors wanting to enter this market should check with other investors to locate a reputable broker. Its smart, as with any investment stradegy, to do you homework and learn as much about the market as possible. It can be a extremely equitable investment for the savvy trader and you can get your money when you want it. - 23200
posted by X - Men @ 11:43 AM
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