What is Forex? Thursday, September 07, 2006
- FOREX=FOReign EXchange
- You can trade 24 hours a day
- The FOREX is larger than all other finincial markets COMBINED
The Foreign Exchange (FOREX) market is a cash (or "spot") interbank marketestablished in 1971 when floating exchange rates begain to materialize. This market is the arena in which the currency of one country is exchanged for those of another and where settlements for international business are made.
The FOREX is a group of approximately 4500 currency trading institutions, including international banks, government central banks and commercial companies. payments for export and imports flow through the Foreign Exchange Market, as well as payments for purchase and sales of assets. This is called the "consumer" foreign exhange market. There is also a "speculator" segment in the FOREX companies, which have large financial exposures to overseas economics participate in the FOREX to offset the risk of international investing.
Historically, the FOREX interbrain market was not available for small speculators. With a previous minimum transaction size an often-stringent financial requirements, the small trader was excluded from participation in this market. but today market maker brokers are allowed to break down the large interbank units and offer small traders the opportunity to buy or sell any number of these smaller units (lots).
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